GREENSBORO, N.C., Feb. 4, 2009 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported that assets topped $616.6 million at December 31, 2008. Loans increased a record $100.6 million, or 25.1%, during 2008 to $501.4 million at year end. Deposits were up $79.5 million in 2008, or 19.0% to $498.1 million at December 31, 2008. Robert T. Braswell, President and CEO of Carolina Bank Holdings, commented, "While other banks pull back, we have supported the credit and deposit needs of customers as we continue to take market share from our competitors."
Net income was $2.2 million in 2008 compared to $3.0 million reported in 2007. Diluted earnings per share were $0.65 and $0.89 in 2008 and 2007, respectively. Per share results were restated to reflect the impact of the six-for-five stock split in 2007. Performance in 2008 reflects continued strong growth in mortgage banking income, a higher provision for loan losses due to strong loan growth and weakening economic conditions, and higher expenses related to several new offices.
Net income was $180,000, or $0.05 per diluted share, for the fourth quarter of 2008 compared to $686,000, or $0.20 per diluted share, for the fourth quarter of 2007.
Mr. Braswell continued, "Our 2008 earnings, while positive compared to our industry, were not as high as desired due to declining economic conditions. Our superior growth and strong results from our wholesale mortgage operation were keys to our success in 2008 and promise to drive profitable results in the future. We did not face any "sub-prime losses" that have hampered national and money center banks in 2008."
Net interest income for 2008 increased $.6 million from 2007, or 3.9% to $14.7 million, reflecting a 22.2% increase in average earning assets and a drop of 48 basis points in the net interest margin to 2.82% in 2008. Fourth quarter 2008 net interest income increased $49,000, or 1.4%, over the same period in 2007 as average earning assets rose while the net interest margin decreased. The 500 basis point decline in the prime rate since August 2007 has negatively impacted our net interest margin in 2008 because of our asset sensitivity and due to an unusually competitive deposit interest rate market.
Non-interest income for 2008 was $4.6 million, an increase of $2.9 million or 166.6% from 2007. Non-interest income increased to $1.3 million in the fourth quarter of 2008, up $.7 million, or 101.1% from the fourth quarter of 2007. Our new wholesale mortgage division, formed in July 2007, was responsible for the $2.4 million increase in mortgage banking income in 2008. The wholesale mortgage division earned $585,000 in 2008 and $41,000 in 2007. Income is recognized when loans are originated, or on a trading basis, since a commitment to sell loans is generally consummated when a commitment to originate is made, thereby eliminating most of the market risk.
Non-interest expense increased to $14.1 million in 2008, an increase of 41.6% from 2007, and increased 45.9% to $3.9 million in the fourth quarter of 2008. The increase in expenses in 2008 corresponded with our strong loan, deposit and fee income growth. A new corporate headquarters and full service office in downtown Greensboro, a loan production office in Winston-Salem, and the expanded wholesale mortgage division accounted for much of the new expense in 2008.
Mr. Braswell added, "We continue to concentrate on our bank's asset quality and believe that our non performing asset levels and charge-offs are more favorable than most of our peers. We are disappointed in the increase in non performing assets over the past quarter but are working diligently to reduce them." Non-performing assets were $6.4 million, or 1.04% of assets at December 31, 2008, compared with $4.5 million, or 0.91% of assets at December 31, 2007. The bank had net charge-offs of 0.15% of average loans in both 2008 and 2007. The allowance for loan losses was 1.15% and 1.13% of loans held for investment at December 31, 2008 and 2007, respectively.
Shareholders' equity totaled $31.6 million at December 31, 2008, up $1.9 million from twelve months ago due to retention of income. Subordinated debentures increased $9.0 million at December 31, 2008 from 2007 due to the private placement of $9 million in subordinated unsecured notes completed in the third quarter of 2008. Shareholders' equity has increased an additional $16 million in January 2009 from the issuance of preferred stock to the United States Treasury under the UST Capital Purchase Program.
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 seven full-service banking locations, four in Greensboro, one in Asheboro, one in High Point, and one in Burlington, 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 December 31, 2008 and 2007
December 31,
2008 2007
(unaudited)
-------- --------
(in thousands)
ASSETS
Cash and due from banks $ 5,896 $ 4,967
Short-term investments and
interest-earning deposits 51 55
Federal funds sold 1 --
-------- --------
Total cash and cash equivalents 5,948 5,022
Securities available for sale, at fair value 59,803 59,304
Securities held-to-maturity, at amortized cost 1,116 3,133
Loans held for sale 19,163 11,869
Loans 501,424 400,784
Allowance for loan losses (5,760) (4,532)
-------- --------
Net loans 495,664 408,121
Premises and equipment, net 19,652 13,792
Other assets 15,265 10,744
-------- --------
Total assets $616,611 $500,116
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 29,367 $ 30,491
Interest-bearing 468,697 388,082
-------- --------
Total deposits 498,064 418,573
Short-term borrowings 6,591 6,102
Federal Home Loan Bank advances 56,856 31,581
Subordinated debentures 19,265 10,310
Other liabilities 4,259 3,910
-------- --------
Total liabilities 585,035 470,476
STOCKHOLDERS' EQUITY
Common stock, $1 par value, 20,000,000 shares
authorized; issued and outstanding -
3,348,193 shares in 2008 and 3,315,157 in 2007 3,348 3,315
Additional paid-in capital 15,586 15,379
Retained earnings 12,893 10,875
Stock in director rabbi trust (648) (524)
Directors deferred fees obligation 648 524
Accumulated other comprehensive income (loss) (251) 71
-------- --------
Total stockholders' equity 31,576 29,640
-------- --------
Total liabilities and stockholders' equity $616,611 $500,116
======== ========
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three months and years ended December 31, 2008 and 2007
(unaudited)
For the For the
Three Months Ended Years Ended
December 31, December 31,
-------------------- --------------------
2008 2007 2008 2007
--------- --------- --------- ---------
(in thousands, except per share data)
Interest income:
Loans $ 7,009 $ 7,612 $ 28,483 $ 29,172
Investment securities -
taxable 671 734 2,750 3,160
Investment securities -
non taxable 107 78 376 140
Interest from federal
funds sold 2 1 29 187
Other interest income -- 2 2 32
--------- --------- --------- ---------
Total interest income 7,789 8,427 31,640 32,691
Interest expense:
Deposits 3,609 4,386 14,864 16,893
Other borrowed money 589 499 2,049 1,627
--------- --------- --------- ---------
Total interest
expense 4,198 4,885 16,913 18,520
--------- --------- --------- ---------
Net interest income 3,591 3,542 14,727 14,171
Provision for loan losses 705 420 1,910 1,162
--------- --------- --------- ---------
Net interest income after
provision for
loan losses 2,886 3,122 12,817 13,009
Noninterest income:
Service charges 272 204 926 748
Mortgage banking
income 914 343 2,959 543
Securities gains
(losses), net -- (13) 227 (14)
Other 111 111 497 452
--------- --------- --------- ---------
Total noninterest
income 1,297 645 4,609 1,729
Noninterest expense:
Salaries and benefits 2,037 1,380 7,666 5,344
Occupancy and equipment 641 372 1,891 1,330
Professional fees 371 295 1,316 806
Outside data processing 228 163 758 607
Advertising
and promotion 163 118 587 473
Stationery, printing
and supplies 155 129 529 469
Impairment charge -- -- -- 100
Other 336 238 1,311 798
--------- --------- --------- ---------
Total noninterest
expense 3,931 2,695 14,058 9,927
--------- --------- --------- ---------
Income before
income taxes 252 1,072 3,368 4,811
Income taxes expense 72 386 1,174 1,787
--------- --------- --------- ---------
Net income $ 180 $ 686 $ 2,194 $ 3,024
========= ========= ========= =========
Basic earnings per
common share $ 0.05 $ 0.21 $ 0.66 $ 0.92
Diluted earnings per
common share $ 0.05 $ 0.20 $ 0.65 $ 0.89
Average common
shares outstanding 3,348,193 3,313,724 3,344,010 3,280,315
Average common shares
and dilutive potential
common shares
outstanding 3,366,244 3,394,797 3,386,631 3,402,711
Total Shares outstanding
at end of period 3,348,193 3,315,157 3,348,193 3,315,157
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
Fourth Quarter 2008
(unaudited)
($ in Quarterly
thousands -----------------------------------------------------
except for 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr.
share data) 2008 2008 2008 2008 2007
--------- --------- --------- --------- --------
EARNINGS
Net interest
income $ 3,591 3,860 3,711 3,565 3,542
Provision
for loan
loss $ 705 350 620 235 420
NonInterest
income $ 1,297 1,034 1,421 857 645
NonInterest
expense $ 3,931 3,434 3,600 3,093 2,695
Net income $ 180 704 608 702 686
Basic
earnings
per share $ 0.05 0.21 0.18 0.21 0.21
Diluted
earnings
per share $ 0.05 0.21 0.18 0.21 0.20
Average
shares
outstanding 3,348,193 3,343,818 3,342,966 3,341,061 3,313,724
Average
diluted
shares
outstanding 3,366,244 3,367,778 3,397,474 3,415,029 3,394,797
PERFORMANCE
RATIOS
Return on
average
assets* 0.12% 0.49% 0.45% 0.55% 0.57%
Return on
average
common
equity* 2.31% 8.99% 7.90% 9.29% 9.45%
Net interest
margin
(fully-tax
equivalent)* 2.56% 2.86% 2.91% 2.94% 3.08%
Efficiency
ratio 79.64% 69.54% 69.63% 69.40% 63.89%
# full-time
equivalent
employees -
period end 119 114 101 96 89
CAPITAL
Equity to
ending
assets 5.12% 5.30% 5.42% 5.82% 5.93%
Tier 1
leverage
capital
ratio -
Bank 7.00% 7.28% 7.51% 7.83% 8.17%
Tier 1
risk-based
capital
ratio -
Bank 7.62% 7.78% 8.08% 8.71% 8.97%
Total
risk-based
capital
ratio -
Bank 10.29% 10.47% 9.09% 9.73% 10.00%
Book value
per share $ 9.43 9.28 9.19 9.13 8.94
ASSET QUALITY
Net
charge-offs
(recoveries) $ 399 (2) 218 67 364
Net
charge-offs
to average
loans* 0.33% 0.00% 0.20% 0.06% 0.36%
Allowance
for loan
losses $ 5,760 5,454 5,102 4,700 4,532
Allowance
for loan
losses to
loans held
invst. 1.15% 1.14% 1.12% 1.13% 1.13%
Nonperforming
loans $ 5,656 2,912 1,601 3,715 3,538
Restructured
loans $ 0 0 0 0 0
Other real
estate
owned $ 728 441 511 592 1,001
Nonperforming
loans to
loans held
for
investment 1.13% 0.61% 0.35% 0.89% 0.88%
Nonperforming
assets to
total
assets 1.04% 0.57% 0.37% 0.82% 0.91%
END OF PERIOD
BALANCES
Total assets $ 616,611 591,364 567,119 524,203 500,116
Total
earning
assets $ 581,558 552,128 532,869 494,359 474,145
Total loans
held for
investment $ 501,424 477,298 456,841 416,121 400,784
Total
deposits $ 498,064 464,969 460,340 437,699 418,573
Stockholders'
equity $ 31,576 31,357 30,723 30,533 29,640
AVERAGE
BALANCES
Total assets $ 598,800 571,941 544,808 513,580 484,039
Total
earning
assets $ 563,769 541,231 516,152 490,678 464,675
Total loans
held for
investment $ 486,472 470,730 436,610 412,521 399,223
Total
interest-
bearing
deposits $ 453,645 427,669 411,423 401,975 379,562
Stockholders'
equity $ 30,911 31,058 30,869 30,319 29,048
Year Ended
----------------------
($ in thousands except for share data) 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
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 89 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
Other real estate owned 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 earning assets 581,558 474,145
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
Stockholders' equity 30,771 27,541
* annualized for all periods presented