Carolina Bank Holdings, Inc. Reports Net Income in the First Quarter as Assets Exceed $700 Million

 | Source: Carolina Bank Holdings, Inc. Carolina Bank Holdings, Inc.

GREENSBORO, N.C., April 30, 2010 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported first quarter 2010 results with highlights as follows:

First Quarter 2010 Financial Highlights

  • Assets increased 11.1% to $704.1 million at March 31, 2010 from $633.8 million at March 31, 2009. Assets increased 1.0% during the first quarter.
  • Net income was $299,000 in the first quarter of 2010 compared to $665,000 in the first quarter of 2009.
  • Net income available to common stockholders was $14,000, or $0.00 per diluted share, in the first quarter of 2010 compared to $411,000, or $0.12 per diluted share, in the first quarter of 2009.
  • Net interest income increased 28.0% in the first quarter of 2010 from the same quarter a year ago to $5.5 million.
  • The net interest margin, computed on a fully taxable basis, increased to 3.54% in the first quarter of 2010 compared to 2.96% in the first quarter of 2009, a five year quarterly high.
  • Non-interest income decreased 11.0% in the first quarter of 2010 from the first quarter of 2009 due to lower gains on sales of investments and higher losses on sale of repossessed assets.
  • Provision for loan losses increased to $2.0 million in the first quarter of 2010 from $1.2 million in the same quarter of 2009.

Net income and net income available to common stockholders was $299,000 and $14,000 in the first quarter of 2010, respectively, compared to $665,000 and $411,000 in first quarter of 2009, respectively. Net income per common share was $0.00 in the first quarter of 2010 compared to net income per common share of $0.12 in the first quarter of 2009.  Robert T. Braswell, President and CEO of Carolina Bank Holdings, commented, "Carolina Bank surpassed $700 million in assets in March 2010 and enjoyed improved net income on a sequential quarterly basis. We continued to increase our net interest margin through our emphasis on profitable growth. We are pleased that our net interest margin increased to a five year quarterly high of 3.54% in the first quarter of 2010. "

Assets increased 1.0% in the first quarter of 2010 to $704.1 million and deposits increased 1.3% to $625.7 million at March 31, 2010. The net interest margin was 3.54% in the first quarter of 2010 compared to 2.96% in the first quarter of 2009. 

Non-interest income of $2.1 million in the first quarter of 2010 declined 11.0% from the same quarter of 2009. Mortgage banking income of $1.7 million represented a majority of the non-interest income in the 2010 period and declined only 3.4% from the year ago quarter.

Non-performing loans to total loans held for investment increased to 3.68% at March 31, 2010 from 2.67% at December 31, 2009.  Non-performing assets to total assets increased to 4.42% at March 31, 2010 from 4.04% at December 31, 2009. Braswell commented, "The current economic times have challenged some of our customers. We are disappointed in our level of non-performing loans and have increased our resources to dispose of non-performing assets and to improve our risk management procedures. However, we feel we are nearing the peak of non-performing asset growth and expect improvements in subsequent quarters." The bank had annualized net charge-offs of 1.03% and 0.16% of average loans held for investment in the first quarter of 2010 and 2009, respectively. The allowance for loan losses was 2.00% and 1.31% of loans held for investment at March 31, 2010 and 2009, respectively.

Non-interest expense was $5.3 million in the first quarter of 2010, an increase of 18.0% from 2009. Impairment charges of $507,000 on three repossessed assets and increased FDIC insurance assessments of $160,000 represented the majority of the increased expenses.

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, Inc. undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

The above release presents certain financial information excluding the impairment charges and FDIC assessments (non-GAAP). These expense items are included in the financial results presented in accordance with generally accepted accounting principles (GAAP). Non-GAAP measures are not in accordance with, or a substitute for, measures prepared in accordance with GAAP, and may be different from non-GAAP measures used by other companies. Non-GAAP measures have limitations in that they do not reflect all of the amounts associated with our results of operations that would be reflected in measures determined in accordance with GAAP. Non-GAAP measures should only be used to evaluate our results of operations in conjunction with corresponding GAAP measures.

Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Balance Sheets
At March 31, 2010 and 2009 and December 31, 2009
  (unaudited)  
  March 31, December 31, 
  2010 2009 2009
       
ASSETS      
Cash and due from banks  $ 6,164  $ 6,282  $ 6,416
Short-term investments and interest-earning deposits  40,287  39  34,039
Total cash and cash equivalents  46,451  6,321  40,455
       
Securities available for sale, at fair value  51,392  52,145  52,924
Securities held-to-maturity, at amortized cost  717  1,074  770
       
Loans held for sale  30,941  30,796  29,388
Loans  534,045  514,203  530,606
Allowance for loan losses  (10,697)  (6,749)  (10,081)
Net loans  523,348  507,454  520,525
       
Premises and equipment, net  19,159  19,459  19,351
Other assets  32,077  16,555  33,639
       
Total assets  $ 704,085  $ 633,804  $ 697,052
       
LIABILITIES AND STOCKHOLDERS' EQUITY      
LIABILITIES      
Deposits:      
Noninterest-bearing  $ 36,910  $ 27,692  $ 39,261
Interest-bearing  588,820  493,755  578,210
Total deposits  625,730  521,447  617,471
       
Short-term borrowings  1,037  4,918  683
Federal Home Loan Bank advances  5,763  36,840  7,783
Subordinated debentures  19,358  19,283  19,360
Other liabilities  4,085  3,601  3,807
Total liabilities  655,973  586,089  649,104
       
STOCKHOLDERS' EQUITY      
Preferred stock, no par, authorized 1,000,000 shares; issued
and outstanding 16,000 shares in 2010 and 2009		  14,555  14,235  14,473
Common stock, $1 par value, 20,000,000 shares authorized; issued and
outstanding -- 3,387,045 shares in 2010 and 2009		  3,387  3,387  3,387
Common stock warrants  1,841  1,841  1,841
Additional paid-in capital  15,808  15,772  15,799
Retained earnings  11,459  13,304  11,445
Stock in director rabbi trust  (648)  (713)  (874)
Directors deferred fees obligation  648  713  874
Accumulated other comprehensive income (loss)   1,062  (824)  1,003
Total stockholders' equity  48,112  47,715  47,948
       
Total liabilities and stockholders' equity  $ 704,085  $ 633,804  $ 697,052
 
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three months ended March 31, 2010 and 2009
(unaudited)
  For the Three Months Ended
  March 31,
  2010 2009
  (in thousands, except per share data)
Interest income:    
Loans  $ 7,476  $ 7,213
Investment securities - taxable  462  593
Investment securities - non taxable  162  123
Other interest income  22  --
Total interest income  8,122  7,929
Interest expense:    
NOW, money market, savings  990  980
Time deposits  1,383  2,272
Other borrowed funds  229  365
Total interest expense  2,602  3,617
     
Net interest income  5,520  4,312
Provision for loan losses  1,988  1,195
     
Net interest income after provision
for loan losses		  3,532  3,117
     
Noninterest income:    
Service charges  216  250
Mortgage banking income  1,749  1,810
Gain on sale of investments  130  235
Repossessed asset losses  (127)  (4)
Other   165  106
Total noninterest income  2,133  2,397
     
Noninterest expense:    
Salaries and benefits  2,574  2,443
Occupancy and equipment  608  593
Professional fees  260  348
Outside data processing  241  205
FDIC Insurance  257  97
Advertising and promotion  159  158
Stationery, printing and supplies   114  112
Impairment of a marketable security  --   251
Impairment of repossessed assets  507  --
Other   558  265
Total noninterest expense  5,278  4,472
Income before income taxes  387  1,042
Income tax expense   88  377
Net income   299  665
Dividends and accretion on preferred stock  285  254
Net income available to common stockholders  $ 14  $ 411
     
Basic earnings per common share  $ --   $ 0.12
Diluted earnings per common share  $ --   $ 0.12
     
Average common shares outstanding  3,387,045  3,451,559
Average common shares and dilutive
potential common shares outstanding		  3,387,045  3,455,621
     
Total shares outstanding at end of period  3,387,045  3,387,045
 
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights 
First Quarter 2010
(unaudited)
  Quarterly Year Ended
  1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.    
($ in thousands except for share data) 2010 2009 2009 2009 2009 2009 2008
               
EARNINGS              
Net interest income $5,520 5,538 5,115 4,740 4,312  19,705  14,727
Provision for loan loss $1,988 5,552 1,737 2,036 1,195  10,520  1,910
NonInterest income $2,133 2,635 1,579 3,242 2,402  10,550  4,609
NonInterest expense $5,278 5,053 4,841 5,514 4,482  20,577  14,058
Net income (loss)  $299 (1,527) 169 335 665  (358)  2,194
Net income (loss) available to common stockholders $14 (1,802) (108) 51 411  (1,448)  2,194
Basic earnings (loss) per share $0.00 (0.53) (0.03) 0.02 0.12  (0.43)  0.66
Diluted earnings (loss) per share $0.00 (0.53) (0.03) 0.02 0.12  (0.43)  0.65
Average shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,451,559  3,383,748  3,344,010
Average diluted shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,455,621  3,385,102  3,386,631
               
PERFORMANCE RATIOS              
Return on average assets * 0.01% -1.03% -0.06% 0.03% 0.26% -0.22% 0.39%
Return on average common equity * 0.17% -20.42% -1.22% 0.60% 4.96% -4.21% 7.13%
Net interest margin (fully-tax equivalent) * 3.54% 3.41% 3.25% 3.15% 2.96% 3.20% 2.82%
Efficiency ratio 68.24% 61.30% 71.55% 68.55% 66.26% 67.42% 72.09%
# full-time equivalent employees - period end  143  140  136  136  119  140  119
               
CAPITAL              
Equity to ending assets 6.83% 6.88% 7.39% 7.25% 7.53% 6.88% 5.12%
Common tangible equity to assets 4.77% 4.80% 5.26% 5.13% 5.28% 4.80% 5.12%
Tier 1 leverage capital ratio - Bank 7.54% 7.45% 7.84% 8.10% 8.32% 7.45% 7.00%
Tier 1 risk-based capital ratio - Bank 8.59% 8.50% 8.82% 8.86% 9.25% 8.50% 7.62%
Total risk-based capital ratio - Bank 11.34% 11.24% 11.48% 11.61% 12.01% 11.24% 10.29%
Book value per common share $9.91 9.88 10.52 10.22 9.88 9.88 9.43
               
ASSET QUALITY              
Net charge-offs (recoveries) $1,372  2,509 2,259 1,225 206  6,199  682
Net charge-offs to average loans * 1.03% 1.88% 1.73% 0.94% 0.16% 1.19% 0.15%
Allowance for loan losses $10,697 10,081 7,038 7,560 6,749 10,081 5,760
Allowance for loan losses to loans held invst. 2.00% 1.90% 1.33% 1.42% 1.31% 1.90% 1.15%
Nonperforming loans $19,636 14,163 14,407 16,829 12,201 14,163 5,656
Restructured loans $0 0 0 0 0 0 0
Repossessed assets $11,507 13,964 7,676 5,329 1,288 13,964 728
Nonperforming loans to loans held for investment 3.68% 2.67% 2.71% 3.16% 2.37% 2.67% 1.13%
Nonperforming assets to total assets 4.42% 4.04% 3.26% 3.28% 2.13% 4.04% 1.04%
               
END OF PERIOD BALANCES              
Total assets $704,085 697,052 676,826 675,192 633,804 697,052 616,611
Total loans held for investment $534,045 530,606 530,791 532,954 514,203 530,606 501,424
Total deposits $625,730 617,471 594,863 558,790 521,447 617,471 498,064
Stockholders' equity $48,112 47,948 50,017 48,942 47,715 47,948 31,576
               
AVERAGE BALANCES              
Total assets $691,406 694,529 679,780 654,900 633,012 665,555 557,283
Total earning assets $641,861 651,733 633,107 612,353 598,620 624,031 527,958
Total loans held for investment  $532,928 533,143 523,019 521,406 514,292 522,965 451,583
Total interest-bearing deposits  $576,968 573,595 545,912 514,875 478,247 528,158 423,680
Common stockholders' equity $33,702 35,008 35,097 34,288 33,614 34,385 30,771
               
* annualized for all periods presented return on average assets and on average common equity are computed using net income (loss) available to common stockholders               


            








        

            

                

                    
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                                EARNINGS
                            
                            
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