GREENSBORO, N.C., April 16, 2007 (PRIME NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported first quarter 2007 net income of $701,000, an increase of 16.3 percent over the $603,000 reported for the first quarter of 2006. Diluted earnings per share were $0.25 compared with $0.21 for the prior-year first quarter, an increase of 19.0 percent. Results reflect strong loan and deposit growth year-over-year, combined with strengthening net interest margins and improving credit quality.
Robert T. Braswell, President and CEO of Carolina Bank Holdings, Inc. commented, "Our bank's strong performance is a reflection of the growing vitality of our local economy. The favorable business climate here in the Piedmont Triad, and more specifically in Greensboro, is attracting investment, creating well-paying jobs, and contributing to the growing prosperity of the region. We have very reasonable living costs, plus great weather and amenities. These are a few of the many reasons we are attracting large companies like FedEx and Honda. In turn, they are creating a climate for small and mid-sized business growth that represent the foundation of our `new economy' and the bread-and-butter of Carolina Bank. Our markets continue to deliver high-quality growth opportunities, and our bank is capturing more than its share."
Total revenue, consisting of net interest income and non-interest income, was $3.7 million for the first quarter of 2007, an increase of 11.1 percent over the $3.3 million reported for the same period in 2006. Compared to the year-ago first quarter, net interest income increased 15.1 percent to $3.3 million, reflecting a 14.3 percent increase in average earning assets and a two basis point increase in the net interest margin, to 3.28 percent. Compared with the previous quarter, net interest income rose 6.4 percent from a combination of strong loan growth and an eight basis point margin expansion. "There are not many banks that can claim an expanding margin this quarter," remarked Braswell, "but we have worked hard to develop strong relationships with our clients, and they bank with us for more than price alone." Non-interest income, consisting primarily of service charges, mortgage banking, investment services income and miscellaneous fee income, declined 16.0 percent from the year-earlier quarter, to $358,000 in the first quarter of 2007; investment services in the 2006 quarter earned an unusually large one-time fee, which was not repeated in the current quarter.
Non-interest expense totaled $2.3 million for the first quarter of 2007, an increase of $291,000, or 14.6 percent, above the $2.0 million reported for the first quarter of 2006. The year-over-year increase primarily reflects Carolina Bank's expansion activities over the past twelve months, including the addition of a full-service office in High Point, which opened on January 2, 2007. Fifteen full-time employees were added over the course of the year to staff these facilities and support business development activities throughout the franchise. As a result, salaries and benefit expense rose $227,000, or 21.2 percent, and accounted for more than three quarters of expense growth year over year. The efficiency ratio for the first quarter of 2007 was 62.44 percent compared with 60.52 percent for the prior-year period.
Assets at March 31, 2007 totaled $438.7 million compared with $379.7 million twelve months ago, an increase of $59.0 million, or 15.5 percent. Growth accelerated during the first quarter of 2007, with assets up $27.1 million from year-end 2006, or 6.6 percent (26.3 percent annualized). For the same twelve-month period, loans grew $56.2 million, or 20.4 percent, reaching $332.1 million at period-end; first quarter 2007 growth continued at the same strong pace, up $16.4 million, or 5.2 percent (20.8 percent annualized). "Commercial loans remain the backbone of our banking strategy," commented Mr. Braswell. "Nearly eighty percent of our loans are commercial, and of these, approximately eighty percent are collateralized by real estate. And we do not see any signs of weakness in our market." Deposits increased commensurately, up $68.5 million, or 21.2 percent over the past year, reaching $391.9 million at March 31, 2007.
Asset quality continues to improve. Nonperforming assets were $2.4 million or 0.55 percent of assets at March 31, 2007, compared with $5.5 million or 1.46 percent of assets at March 31, 2006 and $2.4 million or 0.59 percent of assets at December 31, 2006. Net charge-offs for the first quarter of 2007 were an annualized 0.17 percent of average loans, compared with 0.02 percent for the linked quarter, and 0.00 percent of average loans for the prior-year first quarter. The allowance for loan losses was 1.21 percent of total loans and leases at March 31, 2007.
Shareholders' equity totaled $26.8 million at March 31, 2007, up $3.5 million or 14.9 percent from twelve months ago, with 2,722,388 shares outstanding at March 31, 2007. Mr. Braswell concluded, "Our combination of highly personalized service, an expanding branch network, and technology in places where it matters, have enabled Carolina Bank to meet the needs of our evolving marketplace. Later this year, we will be breaking ground on our new headquarters building - 40,000 square feet in downtown Greensboro - to accommodate the growth of our company, and further establish our presence in the Greensboro community. This represents a commitment to our community and our customers -- to remain close to the factors that have created our success."
About the Company
Carolina Bank, the banking subsidiary of Carolina Bank Holdings, Inc., began 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, and one each in Asheboro, Burlington, and High Point, North Carolina. 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: http://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 March 31, 2007 and 2006 and December 31,2006
(unaudited)
March 31, Dec. 31,
2007 2006 2006
---------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 6,954 $ 2,624 $ 4,762
Short-term investments and
interest-earning deposits 98 297 --
Federal funds sold 16,174 18,538
-------------------------------
Total cash and cash equivalents 23,226 21,459 4,983
Securities available for sale,
at fair value 63,976 64,229 71,054
Securities held-to-maturity,
at amortized cost 3,544 3,923 3,637
Loans 332,112 275,866 315,732
Allowance for loan losses (4,012) (3,582) (3,898)
-------------------------------
Net loans 328,100 272,284 311,834
Premises and equipment, net 10,336 8,354 10,078
Other assets 9,493 9,443 10,006
-------------------------------
Total assets $438,675 $379,692 $ 411,592
===============================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 31,580 $ 27,813 $ 26,984
Interest-bearing 360,356 295,586 333,431
-------------------------------
Total deposits 391,936 323,399 360,415
Short-term borrowings 3,385 2,548 3,605
Federal Home Loan Bank advances 3,601 18,283 8,908
Junior subordinated debentures 10,310 10,310 10,310
Other liabilities 2,655 1,839 2,425
-------------------------------
Total liabilities 411,887 356,379 385,663
STOCKHOLDERS' EQUITY
Common stock and paid-in-capital,
no par value, 20,000,000 shares
authorized; issued and outstanding
- 2,722,388 shares at March 31, 2007
and December 31, 2006 and
2,720,496 shares at March 31, 2006 2,722 2,720 2,722
Additional paid-in capital 15,597 15,580 15,597
Retained earnings 8,552 5,643 7,851
Stock in director rabbi trust (484) (365) (453)
Directors deferred fees obligation 484 365 453
Accumulated other comprehensive
income (loss) (83) (630) (241)
-------------------------------
Total stockholders' equity 26,788 23,313 25,929
-------------------------------
Total liabilities and
stockholders' equity $438,675 $379,692 $ 411,592
===============================
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three months and years ended March 31, 2007 and 2006
(unaudited)
For the Three Months Ended
March 31,
------------------------
2007 2006
---------------------------------- -----------------------
(in thousands, except
per share data)
Interest income:
Loans $ 6,711 $ 5,212
Securities - taxable 835 675
Interest from federal funds sold 59 88
Other interest income 6 16
------------------------
Total interest income 7,611 5,991
Interest expense:
Deposits 3,915 2,703
FHLB advances and other 211 255
Junior subordinated debentures 188 169
------------------------
Total interest expense 4,314 3,127
------------------------
Net interest income 3,297 2,864
Provision for loan losses 255 370
------------------------
Net interest income after
provision for loan losses 3,042 2,494
Noninterest income:
Service charges 172 159
Mortgage banking income 65 63
Other 121 204
------------------------
Total noninterest income 358 426
Noninterest expense:
Salaries and benefits 1,299 1,072
Occupancy and equipment 304 265
Professional fees 187 202
Outside data processing 164 151
Advertising and promotion 116 72
Stationery, printing and supplies 116 86
Other 96 143
------------------------
Total noninterest expense 2,282 1,991
------------------------
Income before income taxes 1,118 929
Income taxes expense 417 326
------------------------
Net income $ 701 $ 603
========================
Basic earnings per common share $ 0.26 $ 0.22
Diluted earnings per common share $ 0.25 $ 0.21
Average common shares outstanding 2,722,388 2,720,496
Average common shares and dilutive
potential common shares outstanding 2,843,594 2,809,823
Total Shares outstanding at
end of period 2,722,388 2,720,496
All per share information has been presented or restated to reflect
the effect of the six-for-five stock split in 2005.
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
First Quarter 2007
(unaudited)
Quarterly
-----------------------------------------------------
($ in thousands
except for 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr 1st Qtr
share data) 2007 2006 2006 2006 2006
-----------------------------------------------------
EARNINGS
Net interest
income $ 3,297 3,101 3,149 3,074 2,864
Provision for
loan loss $ 255 310 231 285 370
NonInterest
income $ 358 335 660 352 426
NonInterest
expense $ 2,282 2,393 1,966 2,031 1,991
Net income $ 701 555 974 678 603
Basic earnings
per share $ 0.26 0.20 0.36 0.25 0.22
Diluted
earnings per
share $ 0.25 0.20 0.35 0.24 0.21
Average shares
outstanding 2,722,388 2,722,388 2,721,722 2,720,584 2,720,496
Average diluted
shares
outstanding 2,843,594 2,840,306 2,816,861 2,809,911 2,809,823
PERFORMANCE
RATIOS
Return on
average
assets* 0.66% 0.56% 0.99% 0.71% 0.66%
Return on
average common
equity* 10.65% 8.68% 15.95% 11.53% 10.46%
Net interest
margin (fully-
tax
equivalent)* 3.28% 3.20% 3.36% 3.40% 3.26%
Efficiency ratio 62.44% 62.22% 56.03% 59.28% 60.52%
No. full-time
equivalent
employees -
period end 74 69 62 62 59
CAPITAL
Equity to
ending assets 6.11% 6.30% 6.26% 6.10% 6.14%
Tier 1 leverage
capital ratio n/a 8.76% n/a n/a 8.65%
Tier 1 risk-
based capital
ratio n/a 9.97% n/a n/a 10.17%
Total risk-
based capital
ratio n/a 11.45% 11.92% n/a 11.32%
Book value per
share $ 9.84 9.52 9.23 8.74 8.57
ASSET QUALITY
Net charge-
offs $ 141 18 (21) 513 (2)
Net charge-offs
to average
loans* 0.17% 0.02% -0.03% 0.74% 0.00%
Allowance for
loan losses $ 4,012 3,898 3,606 3,354 3,582
Allowance for
loan losses to
total loans 1.21% 1.23% 1.25% 1.20% 1.30%
Nonperforming
loans $ 2,385 2,388 2,626 3,140 5,430
Restructured
loans $ 45 45 227 0 0
Other real
estate owned $ 0 0 0 453 111
Nonperforming
loans to total
loans 0.73% 0.77% 0.99% 1.12% 1.97%
Nonperforming
assets to
total assets 0.55% 0.59% 0.71% 0.92% 1.46%
END OF PERIOD
BALANCES
Total assets $ 438,675 411,592 401,224 389,978 379,692
Total earning
assets $ 415,904 390,644 378,080 367,246 357,423
Total loans $ 332,112 315,732 288,557 280,366 275,866
Total deposits $ 391,936 360,415 348,939 333,148 323,399
Stockholders'
equity $ 26,788 25,929 25,134 23,795 23,313
AVERAGE BALANCES
Total assets $ 424,839 398,427 393,605 383,008 366,335
Total earning
assets $ 401,683 387,233 375,362 361,521 351,541
Total loans $ 326,161 306,272 288,433 277,142 274,728
Total interest-
bearing
deposits $ 340,430 318,398 307,500 296,385 281,328
Stockholders'
equity $ 26,324 25,579 24,421 23,526 23,070
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 $ 1.03 0.75
Diluted earnings per share $ 1.00 0.73
Average shares outstanding 2,721,298 2,716,866
Average diluted shares outstanding 2,819,225 2,795,887
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%
No. 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 $ 9.52 8.38
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
n/a = not available