GREENSBORO, N.C., April 18, 2006 (PRIMEZONE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported first quarter 2006 net income of $603,000, an increase of 13.3% over the $532,000 reported for the first quarter of 2005. Diluted earnings per share were $0.22 compared with $0.19 for the prior-year period, an increase of 15.8%. Per share results were restated to reflect the impact of the six-for-five stock split in the fourth quarter of 2005. Results reflect revenue growth generated by strong loan and deposit growth year-over-year.
Robert T. Braswell, President and CEO of Carolina Bank Holdings, commented, "We are pleased to report another consecutive quarter of earnings growth. Loans grew over 22% during the prior twelve months, and continue at this strong pace into 2006; on an annualized basis, loans increased 20% since the beginning of the year. Lower-cost transaction accounts grew over 40% during the same 12-month period, and continue at a robust pace - up 22% on an annualized basis since the beginning of the year. This growth is reflective of the strength of our markets, and the skill of our bankers. We are pleased with our reception in new communities, like Burlington where we have recently expanded to accept deposits. High Point is still on target for a late-2006 or early-2007 opening.
"A highlight of this past quarter was the growing level of fee income from non-deposit investment products. Our investment services partnership with UVEST Financial Services generated an increase of $96,000 above the first quarter of 2005, to $149,000; the majority of the increase came from a single account."
Mr. Braswell continued, "It has taken longer than we anticipated to return our restructured loans to performing status. We reclassified these loans to non-accrual during the first quarter of 2006 but anticipate near-term resolution of a portion of this $2.5 million credit. The majority of our problem assets are collateralized by real estate. However, resolution of loans secured by real-estate requires a more protracted time frame to achieve an acceptable payout."
Total revenue, consisting of net interest income and non-interest income, was $3.3 million for the first quarter of 2006 compared with $2.7 million for the first quarter of 2005, an increase of 21.0%. Net interest income increased 18.8% to $2.9 million, reflecting a 14.5% increase in average earning assets and a 5 basis point increase in the net interest margin to 3.26%. Mr. Braswell noted, "Our success at attracting high-quality lending opportunities along with the low-cost deposits to fund them has enabled us to maintain a relatively stable net interest margin over the last five quarters. The majority of margin variations relate to changes in the level of non-performing assets." Non-interest income increased 38.3% to $426,000, primarily as a result of a 96.2% improvement in other income arising from an increase in investment services income.
Non-interest expense totaled $2.0 million for the first quarter of 2006, an increase of 21.8% over the $1.6 million reported for the first quarter of 2005. The increase primarily reflects corporate growth over the past twelve months, including the third quarter 2005 opening of a loan production office in Burlington. Salaries and employee benefits, up $203,000 or 23.4%, accounted for over half of the $357,000 increase; the increase reflects the addition of 7 FTE employees as well as higher benefit costs. The efficiency ratio for the first quarter of 2006 was 60.52% compared with 60.10% for the prior-year period.
Assets at March 31, 2006 totaled $379.7 million compared with $313.5 million twelve months ago, an increase of 21.1%. Loans held for investment grew $50.1 million, or 22.2%, during the past twelve months, reaching $275.9 million at period-end. Commercial real estate loans accounted for the majority of this growth; they increased $39.6 million, or 30.6% over the past twelve months, and now account for 61.3% of the loan portfolio.
Deposits increased $63.5 million, or 24.4% over the past year, reaching $323.4 million at March 31, 2006. Transaction accounts (DDA, NOW, MM and Savings) grew $50.2 million or 41.3% over the past twelve months, and now account for $171.7 million or 53.1% of total deposits. This compares with $121.5 million or 46.7% of deposits twelve months ago.
Asset quality remained stable from the previous quarter. Nonperforming assets were $5.5 million or 1.46% of assets at March 31, 2006 compared with $5.4 million or 1.48% of assets at December 31, 2005 and $3.8 million or 1.23% of assets at March 31, 2005. Net charge-offs for the first quarter of 2006 were virtually zero compared with an annualized 0.10% of average loans for the previous quarter, and 0.02% of average loans for the prior-year first quarter. The allowance for loan losses was 1.30% of total loans and leases at March 31, 2006.
Shareholders' equity totaled $23.3 million at March 31, 2006, up $1.8 million from twelve months ago. Leverage remains at comfortable levels. Shares outstanding at March 31, 2006 were 2,720,496. Mr. Braswell concluded, "We are pleased to begin 2006 on a positive note. We look forward to the new opportunities our expanding geographic footprint will provide in the coming year."
About the Company
Carolina Bank Holdings, Inc., the holding company for Carolina Bank, operates five full- service branches in North Carolina: three in Greensboro, one in Asheboro, in addition to a newly established office in Burlington. Further information is available on the Company's web site: www.carolinabank.com.
The Carolina Bank Holdings, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2257
Forward-Looking Statements
This press release contains forward-looking statements regarding future events. These statements are only predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include risks of managing our growth, substantial changes in financial markets, regulatory changes, changes in interest rates, loss of deposits and loan demand to other financial institutions, and changes in real estate values and the real estate market. Additional information concerning factors that could cause actual results to be materially different from those in the forward-looking statements is contained in the Company's filings with the Securities and Exchange Commission.
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
First Quarter 2006
(unaudited)
($ in thousands except for share data)
Quarterly
-----------------------------------------------------
1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr
2006 2005 2005 2005 2005
-----------------------------------------------------
EARNINGS
Net interest
income $ 2,864 2,836 2,576 2,405 2,411
Provision for
loan loss $ 370 331 245 450 280
NonInterest
income $ 426 327 279 316 308
NonInterest
expense $ 1,991 1,963 1,695 1,654 1,634
Net income $ 603 555 548 402 532
Basic earnings
per share $ 0.22 0.20 0.20 0.15 0.20
Diluted
earnings
per share $ 0.22 0.20 0.20 0.14 0.19
Average
shares
outstanding 2,720,496 2,720,491 2,720,336 2,719,750 2,706,887
Average diluted
shares
outstanding 2,804,564 2,794,686 2,796,181 2,797,046 2,795,635
PERFORMANCE
RATIOS
Return on
average
assets(a) 0.61% 0.64% 0.68% 0.51% 0.67%
Return on
average common
equity(a) 10.46% 9.85% 9.85% 7.42% 10.04%
Net interest
margin
(fully-tax
equivalent)(a) 3.26% 3.41% 3.32% 3.15% 3.21%
Efficiency
ratio 60.52% 62.06% 59.37% 60.79% 60.10%
No. full-time
equivalent
employees -
period end 59 59 57 53 52
CAPITAL
Equity to
ending assets 6.14% 6.24% 6.78% 6.76% 6.85%
Tier 1 leverage
capital ratio na 8.98% 9.39% 9.32% 9.22%
Tier 1 risk-
based capital
ratio na 10.36% 11.17% 10.97% 11.18%
Total risk-
based capital
ratio na 12.17% 13.14% 13.11% 13.40%
Book value per
share $ 8.57 8.38 8.25 8.06 7.89
ASSET QUALITY
Net charge-
offs $ (2) 65 497 330 12
Net charge-offs
to average
loans(a) 0.00% 0.10% 0.83% 0.56% 0.02%
Allowance for
loan losses $ 3,582 3,210 2,944 3,196 3,076
Allowance for
loan losses
to total loans 1.30% 1.22% 1.23% 1.38% 1.36%
Nonperforming
loans $ 5,430 2,834 3,252 4,410 3,039
Restructured
loans $ 0 2,474 2,574 48 118
Other real
estate owned $ 111 111 37 652 691
Nonperforming
loans to total
loans 1.97% 2.02% 2.43% 1.92% 1.40%
Nonperforming
assets to
total assets 1.46% 1.48% 1.77% 1.57% 1.23%
END OF PERIOD
BALANCES
Total assets $ 379,692 365,170 331,359 324,524 313,498
Total earning
assets $ 357,423 344,522 309,913 300,386 295,706
Total loans $ 275,866 262,609 239,294 232,180 225,793
Total deposits $ 323,399 306,334 276,893 270,229 259,922
Stockholders'
equity $ 23,313 22,787 22,453 21,949 21,471
AVERAGE BALANCES
Total assets $ 366,335 346,434 323,461 317,878 315,691
Total earning
assets $ 351,541 332,575 310,297 305,297 300,808
Total loans $ 274,728 256,904 239,340 235,144 228,085
Total interest-
bearing
deposits $ 281,328 262,342 243,509 240,503 212,021
Stockholders'
equity $ 23,070 22,532 22,265 21,676 21,199
Calendar Year
------------------------
2005 2004
---------- -----------
EARNINGS
Net interest income $ 10,228 8,315
Provision for loan loss $ 1,306 769
NonInterest income $ 1,230 1,263
NonInterest expense $ 6,946 6,336
Net income $ 2,037 1,633
Basic earnings per share $ 0.75 0.60
Diluted earnings per share $ 0.73 0.59
Average shares outstanding 2,716,866 2,699,926
Average diluted shares outstanding 2,795,887 2,767,587
PERFORMANCE RATIOS
Return on average assets(a) 0.60% 0.64%
Return on average common equity(a) 9.29% 7.99%
Net interest margin
(fully-tax equivalent)(a) 3.15% 3.43%
Efficiency ratio 60.62% 66.15%
No. full-time equivalent
employees - period end 59 51
CAPITAL
Equity to ending assets 6.24% 6.78%
Tier 1 leverage capital ratio 8.98% 9.64%
Tier 1 risk-based capital ratio 10.36% 11.30%
Total risk-based capital ratio 12.17% 13.61%
Book value per share $ 8.38 7.81
ASSET QUALITY
Net charge-offs $ 904 111
Net charge-offs to average loans(a) 0.36% 0.06%
Allowance for loan losses $ 3,210 2,808
Allowance for loan losses to total loans 1.22% 1.26%
Nonperforming loans $ 2,834 882
Restructured loans $ 2,474 48
Other real estate owned $ 111 857
Nonperforming loans to total loans 2.02% 0.42%
Nonperforming assets to total assets 1.48% 0.57%
END OF PERIOD BALANCES
Total assets $ 365,170 311,537
Total earning assets $ 344,522 295,774
Total loans $ 262,609 223,470
Total deposits $ 306,334 258,155
Stockholders' equity $ 22,787 21,120
AVERAGE BALANCES
Total assets $ 338,527 255,374
Total earning assets $ 324,928 242,095
Total loans $ 251,529 197,384
Total interest-bearing deposits $ 256,921 212,343
Stockholders' equity $ 22,386 20,430
(a) annualized for quarterly data
na = not available
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
First Quarter 2006
(unaudited)
For the Three Months Ended
March 31,
--------------------------
2006 2005
----------------------------------- --------------------------
(in thousands, except
per share data)
Interest income:
Loans $ 5,212 $ 3,587
Securities - taxable 675 461
Interest from federal funds sold 88 127
Other interest income 16 1
--------------------------
Total interest income 5,991 4,176
Interest expense:
Deposits 2,703 1,502
FHLB advances and other 255 149
Junior subordinated debentures 169 114
--------------------------
Total interest expense 3,127 1,765
--------------------------
Net interest income 2,864 2,411
Provision for loan losses 370 280
--------------------------
Net interest income after provision
for loan losses 2,494 2,131
Noninterest income:
Service charges 159 146
Mortgage banking income 63 58
Other 204 104
--------------------------
Total noninterest income 426 308
Noninterest expense:
Salaries and benefits 1,072 869
Occupancy and equipment 265 218
Professional fees 202 186
Outside data processing 151 130
Advertising and promotion 72 62
Stationery, printing and supplies 86 67
Other 143 102
--------------------------
Total noninterest expense 1,991 1,634
--------------------------
Income before income taxes 929 805
Income taxes expense 326 273
--------------------------
Net income $ 603 $ 532
==========================
Basic earnings per common share $ 0.22 $ 0.20
Diluted earnings per common share $ 0.22 $ 0.19
Average common shares outstanding 2,720,496 2,706,887
Average common shares and dilutive
potential common shares outstanding 2,804,564 2,795,635
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Balance Sheets
First Quarter 2006
(unaudited)
March 31, December 31,
2006 2005 2005
--------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 2,624 $ 2,462 $ 4,470
Short-term investments and
interest-earning deposits 297 235 12,770
Federal funds sold 18,538 20,136 3,519
------------------- ----------
Total cash and cash equivalents 21,459 22,833 20,759
Securities available for sale,
at fair value 64,229 48,173 64,461
Securities held-to-maturity,
at amortized cost 3,923 4,408 3,997
Loans 275,866 225,793 262,609
Allowance for loan losses (3,582) (3,076) (3,210)
------------------- ----------
Net loans 272,284 222,717 259,399
Premises and equipment, net 8,354 6,541 7,728
Other assets 9,443 8,826 8,826
------------------- ----------
Total assets $379,692 $313,498 $365,170
=================== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 27,813 $ 23,756 $ 27,168
Interest-bearing 295,586 236,166 279,166
------------------- ----------
Total deposits 323,399 259,922 306,334
Short-term borrowings 2,548 2,324 2,844
Federal Home Loan Bank advances 18,283 18,352 21,300
Junior subordinated debentures 10,310 10,310 10,310
Other liabilities 1,839 1,119 1,595
------------------- ----------
Total liabilities 356,379 292,027 342,383
STOCKHOLDERS' EQUITY
Common stock and paid-in-capital, no par
value, 20,000,000 shares authorized;
issued and outstanding - 2,720,496 shares
at March 31, 2006 and 2,266,458 shares
at March 31, 2005 2,720 2,266 2,720
Additional paid-in capital 15,580 16,022 15,580
Retained earnings 5,643 3,536 5,040
Stock in directors rabbi trust (365) (256) 333
Directors deferred fees obligation 365 256 (333)
Accumulated other comprehensive loss (630) (353) (553)
------------------- ----------
Total stockholders' equity 23,313 21,471 22,787
------------------- ----------
Total liabilities and stockholders'
equity $379,692 $313,498 $365,170
================== ===========