GREENSBORO, N.C., July 29, 2009 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported net income for the second quarter of 2009 of $335,000 and net income available to common stockholders of $51,000, or $0.02 per diluted common share, compared to $608,000, or $0.18 per diluted common share in the second quarter of 2008. The issuance of preferred stock contributed to lower net income available to common stockholders and lower diluted earnings per share in 2009. Net income before income taxes, the provision for loan losses, and impairment charges was $3.0 million in the second quarter of 2009 compared to $1.5 million in the second quarter of 2008. An impairment charge of $0.5 million was taken on an investment security issued by a correspondent bank and FDIC insurance premiums increased $0.5 million during the second quarter of 2009 from the same period in 2008. The provision for loan losses was $2.0 million in the second quarter of 2009 compared to $0.6 million in the second quarter of 2008.
Robert T. Braswell, President and CEO of Carolina Bank Holdings, commented, "Our core earnings before provision for loan losses, an impairment charge, and increased FDIC insurance has been aided by an improved net interest margin which increased 24 basis points from a year ago and from record fee income from our mortgage division. These base earnings doubled from the second quarter of last year. We have been challenged by the current credit environment but are pleased with the performance of our mortgage division and our success in net interest margin improvement."
Net interest income for the second quarter of 2009 increased $1.0 million from the same quarter in 2008, or 27.7% to $4.7 million, reflecting a 18.6% increase in average earning assets and a 24 basis point increase in the net interest margin to 3.15%.
Non-interest income for the second quarter of 2009 was $3.2 million, an increase of $1.8 million from the second quarter of 2008. Mortgage banking income which consists of fees from the origination and sale of residential mortgage loans, increased to $2.8 million in the second quarter of 2009 from $0.8 million in the second quarter of 2008.
Excluding the impairment charge and increased FDIC premiums, non-interest expense increased 26.2% in the second quarter of 2009 from a year ago and corresponded with strong loan, deposit and fee income growth. Inclusive of those charges, non-interest expense increased to $5.5 million, an increase of 53.2% from the second quarter of 2008. A new corporate office and full service branch in downtown Greensboro, a growing office in Winston-Salem, and the expanded wholesale mortgage division accounted for most of the new expense in 2009.
Mr. Braswell added, "We continue to concentrate on our bank's asset quality as our non-performing assets have risen sharply in 2009 due to economic weakness and the related impact on some of our business customers. We are disappointed in the increase in non-performing assets over the past quarter and are working to reduce them." Non-performing assets were $22.2 million, or 3.28% of assets at June 30, 2009, compared with $6.4 million, or 1.04% of assets at December 31, 2008. The bank had annualized net charge-offs of 0.55% and 0.13% of average loans in the first six months of 2009 and 2008, respectively. The allowance for loan losses was 1.42% and 1.12% of loans held for investment at June 30, 2009 and 2008, respectively. Net income for the six months ended June 30, 2009 was $1,000,000 and net income available to common stockholders was $462,000, or $0.14 per diluted common share, compared to $1,310,000, or $0.38 per diluted share, for the same period in 2008.
Shareholders' equity was strengthened during 2009 from the issuance of $16.0 million of preferred stock to the United States Treasury under the UST Capital Purchase Program and from an increase in retained earnings. Dividends paid and accrued to the United States Treasury and accretion of the discount on the preferred stock totaled $538,000 in the first half of 2009.
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. 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 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, 2009 and 2008 and December 31, 2008
(unaudited)
June 30, December 31,
2009 2008 2008
---------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 17,256 $ 7,033 $ 5,896
Short-term investments and interest-
earning deposits 21 346 51
Federal funds sold
-- -- 1
-------------------- ---------
Total cash and cash equivalents 17,277 7,379 5,948
Securities available for sale,
at fair value 55,149 58,853 59,803
Securities held-to-maturity,
at amortized cost 933 1,199 1,116
Loans held for sale 36,606 15,630 19,163
Loans 532,954 456,841 501,424
Allowance for loan losses (7,560) (5,102) (5,760)
-------------------- ---------
Net loans 525,394 451,739 495,664
Premises and equipment, net 19,415 17,579 19,652
Other assets 20,418 14,740 15,265
-------------------- ---------
Total assets $ 675,192 $ 567,119 $ 616,611
==================== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 31,754 $ 30,302 $ 29,367
Interest-bearing 527,036 430,038 468,697
-------------------- ---------
Total deposits 558,790 460,340 498,064
Short-term borrowings 2,138 11,616 6,591
Federal Home Loan Bank advances 41,821 50,207 56,856
Subordinated debentures 19,302 10,310 19,265
Other liabilities 4,199 3,923 4,259
-------------------- ---------
Total liabilities 626,250 536,396 585,035
STOCKHOLDERS' EQUITY
Preferred stock, no par, authorized
1,000,000 shares; issued and
outstanding 16,000 shares in 2009
and none in 2008 14,313 -- --
Common stock, $1 par value, 20,000,000
shares authorized; issued and
outstanding - 3,387,045 shares in
2009 and 3,342,966 and 3,348,193
in 2008 3,387 3,343 3,348
Additional paid-in capital 17,622 15,515 15,586
Retained earnings 13,354 12,017 12,893
Stock in director rabbi trust (758) (644) (648)
Directors deferred fees obligation 758 644 648
Accumulated other comprehensive
income (loss) 266 (152) (251)
-------------------- ---------
Total stockholders' equity 48,942 30,723 31,576
-------------------- ---------
Total liabilities and stockholders'
equity $ 675,192 $ 567,119 $ 616,611
==================== =========
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three and six months
ended June 30, 2009 and 2008 (unaudited)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2009 2008 2009 2008
------------------------------------------------ -------------------
(in thousands, except per share data)
Interest income:
Loans $ 7,414 $ 6,947 $ 14,627 $ 14,265
Investment securities
- taxable 533 684 1,126 1,424
Investment securities
- non taxable 135 89 258 171
Interest from federal
funds sold -- 8 -- 20
Other interest income 1 -- 1 1
-------------------- --------------------
Total interest income 8,083 7,728 16,012 15,881
Interest expense:
NOW, money market, savings 1,134 962 2,114 2,189
Time deposits 1,898 2,652 4,170 5,498
Other borrowed funds 311 403 676 918
-------------------- --------------------
Total interest expense 3,343 4,017 6,960 8,605
-------------------- --------------------
Net interest income 4,740 3,711 9,052 7,276
Provision for loan losses 2,036 620 3,231 855
-------------------- --------------------
Net interest income after
provision for loan losses 2,704 3,091 5,821 6,421
Noninterest income:
Service charges 248 209 498 406
Mortgage banking income 2,798 827 4,608 1,402
Gain on sale of
investments -- 227 235 227
Other 196 158 303 243
-------------------- --------------------
Total noninterest income 3,242 1,421 5,644 2,278
Noninterest expense:
Salaries and benefits 2,520 1,926 4,963 3,681
Occupancy and equipment 576 420 1,169 799
Professional fees 252 394 600 683
Outside data processing 201 164 406 338
FDIC Insurance 623 165 720 242
Advertising and promotion 132 183 290 298
Stationery, printing and
supplies 173 159 285 267
Impairment of marketable
securities 514 -- 765 --
Other 523 189 793 385
-------------------- --------------------
Total noninterest expense 5,514 3,600 9,991 6,693
-------------------- --------------------
Income before income taxes 432 912 1,474 2,006
Income taxes expense 97 304 474 696
Net income 335 608 1,000 1,310
-------------------- --------------------
Dividends and accretion on
preferred stock 284 -- 538 --
Net income available to
common stockholders $ 51 $ 608 $ 462 $ 1,310
==================== ====================
Basic earnings per
common share $ 0.02 $ 0.18 $ 0.14 $ 0.39
Diluted earnings per
common share $ 0.02 $ 0.18 $ 0.14 $ 0.38
Average common shares
outstanding 3,387,045 3,342,966 3,382,100 3,342,014
Average common shares and
dilutive potential common
shares outstanding 3,387,045 3,397,474 3,384,131 3,406,252
Total Shares outstanding
at end of period 3,387,045 3,342,966 3,387,045 3,342,966
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Second Quarter 2009
(unaudited)
($ in thousands except for share data)
Quarterly
-----------------------------------------------------
2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr.
2009 2009 2008 2008 2008
-----------------------------------------------------
EARNINGS
Net interest
income $ 4,740 4,312 3,591 3,860 3,711
Provision for
loan loss $ 2,036 1,195 705 350 620
NonInterest
income $ 3,242 2,402 1,297 1,034 1,421
NonInterest
expense $ 5,514 4,482 3,931 3,434 3,600
Net income $ 335 665 180 704 608
Net income
available to
common
stockholders $ 51 411 180 704 608
Basic earnings
per share $ 0.02 0.12 0.05 0.21 0.18
Diluted
earnings
per share $ 0.02 0.12 0.05 0.21 0.18
Average shares
outstanding 3,387,045 3,451,559 3,348,193 3,343,818 3,342,966
Average diluted
shares
outstanding 3,387,045 3,455,621 3,366,244 3,367,778 3,397,474
PERFORMANCE
RATIOS
Return on average
assets * 0.03% 0.26% 0.12% 0.49% 0.45%
Return on average
common equity * 0.60% 4.96% 2.31% 8.99% 7.90%
Net interest
margin
(fully-tax
equivalent) * 3.15% 2.96% 2.56% 2.86% 2.91%
Efficiency
ratio 68.55% 68.65% 79.64% 69.54% 69.63%
# full-time
equivalent
employees -
period end 136 119 119 114 101
CAPITAL
Equity to ending
assets 7.25% 7.53% 5.12% 5.30% 5.42%
Tier 1 leverage
capital ratio -
Bank 8.10% 8.32% 7.00% 7.28% 7.51%
Tier 1 risk-based
capital ratio -
Bank 8.86% 9.25% 7.62% 7.78% 8.08%
Total risk-based
capital ratio -
Bank 11.61% 12.01% 10.29% 10.47% 9.09%
Book value
per share $ 10.22 9.88 9.43 9.28 9.19
ASSET QUALITY
Net charge-offs
(recoveries) $ 1,225 206 399 (2) 218
Net charge-offs
to average
loans * 0.94% 0.16% 0.33% 0.00% 0.20%
Allowance for
loan losses $ 7,560 6,749 5,760 5,454 5,102
Allowance for
loan losses to
loans held
invst. 1.42% 1.31% 1.15% 1.14% 1.12%
Nonperforming
loans $ 16,829 12,201 5,656 2,912 1,601
Restructured
loans $ 0 0 0 0 0
Repossessed
assets $ 5,329 1,288 728 441 511
Nonperforming
loans to loans
held for
investment 3.16% 2.37% 1.13% 0.61% 0.35%
Nonperforming
assets to total
assets 3.28% 2.13% 1.04% 0.57% 0.37%
END OF PERIOD
BALANCES
Total assets $ 675,192 633,804 616,611 591,364 567,119
Total loans
held for
investment $ 532,954 514,203 501,424 477,298 456,841
Total deposits $ 558,790 521,447 498,064 464,969 460,340
Stockholders'
equity $ 48,942 47,715 31,576 31,357 30,723
AVERAGE BALANCES
Total assets $ 654,900 633,012 598,800 571,941 544,808
Total earning
assets $ 612,353 598,620 563,769 541,231 516,152
Total loans held
for investment $ 521,406 514,292 486,472 470,730 436,610
Total interest-
bearing
deposits $ 570,202 478,247 453,645 427,669 411,423
Common
stockholders'
equity $ 34,288 33,614 30,911 31,058 30,869
Year Ended
----------------------
2008 2007
---------- ----------
EARNINGS
Net interest income $ 14,727 14,171
Provision for loan loss $ 1,910 1,162
NonInterest income $ 4,609 1,729
NonInterest expense $ 14,058 9,927
Net income $ 2,194 3,024
Net income available to common stockholders $ 2,194 3,024
Basic earnings per share $ 0.66 0.92
Diluted earnings per share $ 0.65 0.89
Average shares outstanding 3,344,010 3,280,315
Average diluted shares outstanding 3,386,631 3,402,711
PERFORMANCE RATIOS
Return on average assets * 0.39% 0.67%
Return on average common equity * 7.13% 10.98%
Net interest margin (fully-tax equivalent) * 2.82% 3.30%
Efficiency ratio 72.08% 62.20%
# full-time equivalent employees - period end 119 89
CAPITAL
Equity to ending assets 5.12% 5.93%
Tier 1 leverage capital ratio - Bank 7.00% 8.17%
Tier 1 risk-based capital ratio - Bank 7.62% 8.97%
Total risk-based capital ratio - Bank 10.29% 10.00%
Book value per share $ 9.43 8.94
ASSET QUALITY
Net charge-offs (recoveries) $ 682 528
Net charge-offs to average loans * 0.15% 0.15%
Allowance for loan losses $ 5,760 4,532
Allowance for loan losses to loans held invst. 1.15% 1.13%
Nonperforming loans $ 5,656 3,538
Restructured loans 0 0
Repossessed assets 728 1,001
Nonperforming loans to loans held for investment 1.13% 0.88%
Nonperforming assets to total assets 1.04% 0.91%
END OF PERIOD BALANCES
Total assets $ 616,611 500,116
Total loans held for investment $ 501,424 400,784
Total deposits $ 498,064 418,573
Stockholders' equity $ 31,576 29,640
AVERAGE BALANCES
Total assets $ 557,282 451,130
Total earning assets $ 527,957 431,926
Total loans held for investment $ 451,583 358,575
Total interest-bearing deposits $ 423,679 361,800
Common stockholders' equity $ 30,771 27,541
* annualized for all periods presented