GREENSBORO, N.C., April 22, 2008 (PRIME NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported first quarter 2008 net income of $702,000, a small increase from $701,000 reported for the first quarter of 2007. Diluted earnings per share were $0.21 in the first quarter of 2008 and the first quarter of 2007. Per share results were restated to reflect the impact of the six-for-five stock split in 2007. Performance reflects continued strong growth in loans and deposits and improvement in asset quality in the most recent quarter.
Asset growth remains strong. At March 31, 2008, Carolina Bank Holdings, Inc. had total assets of $524.2 million, an increase of $85.53 million or 19.5% over the past year. Gross loans increased $84.01 million, or 25.3%, over the prior year reaching $416.12 million and grew $15.34 million, or 3.8% during the first quarter of 2008. Deposits were up $45.76 million from a year ago, or 11.7% to $437.70 million at March 31, 2008. Robert T. Braswell, President and CEO of Carolina Bank Holdings, Inc. commented, "as our 2007 Annual Report stated, Carolina Bank continues to operate Against the Grain. For the first quarter of 2008, we find our net income stable to improving, credit quality remaining solid, and our historical growth continuing. We are very pleased with our first quarter 2008 results during these tumultuous times."
First quarter 2008 net interest income increased $268,000, or 8.1%, over the same period in 2007 as average earning assets rose 21.7% and the net interest margin (fully-taxable equivalent) decreased by 33 basis points to 2.94%. The 3% decline in the prime rate during the seven months ending March 31, 2008 negatively impacted our net interest margin in late 2007 and early 2008 because of our asset sensitivity and due to an unusually competitive deposit interest rate market.
Non-interest income increased to $857,000 in the first quarter of 2008, up $499,000, or 139.4% from the first quarter of 2007. Our new wholesale mortgage division, formed in July 2007, was responsible for most of the $510,000 increase in mortgage banking revenue in the first quarter of 2008. The wholesale mortgage division realized net income of $152,000 in the first quarter of 2008 and was $0.04 accretive to diluted earnings per share. Income is recognized when loans are originated, or on a mark to market 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 $3.09 million in the first quarter of 2008, an increase of 35.5% from the first quarter of 2007. Excluding $311,000 of new expenses from our wholesale mortgage division and $77,000 in expenses related to increased FDIC premiums in the first quarter of 2008, non-interest expense increased 18.5% in the first quarter of 2008 from the first quarter of 2007. The increased expenses in 2008 supported our growth and included a new office in Burlington which opened in the third quarter of 2007 and a loan production office in Winston-Salem which opened in the first quarter of 2008.
Mr. Braswell added, "progress is being made to return our bank's asset quality to levels more in line with our historical experience. Non-performing assets declined from the previous two quarters." Non-performing assets were $4.31 million, or 0.82% of assets at March 31, 2008 and $4.54 million, or 0.91% of assets at December 31, 2007, compared with $2.43 million, or 0.55% of assets at March 31, 2007. The bank had net charge-offs of $25,000, or 0.02% annualized, of average loans in the first quarter of 2008 compared to $141,000, or 0.17% annualized, of average loans in the first quarter of 2007. The allowance for loan losses was 1.13% of gross loans at March 31, 2008.
Shareholders' equity totaled $30.53 million at March 31, 2008, up $3.75 million from twelve months ago. Shares outstanding at March 31, 2008 were 3,342,966.
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, Randolph, and Forsyth. The bank has six full-service banking locations, three in Greensboro, one in Asheboro, one in High Point, and one in Burlington and a loan production office in Winston-Salem. The bank is building a new corporate headquarters in downtown Greensboro, with expected occupancy in the third quarter of 2008. 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: 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 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.
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Balance Sheets
At March 31, 2008 and 2007 and December 31, 2007
(unaudited)
March 31, Dec. 31,
2008 2007 2007
----------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 5,320 $ 6,954 $ 4,967
Short-term investments and
interest-earning deposits 28 98 55
Federal funds sold -- 16,174 --
-------------------- ---------
Total cash and cash equivalents 5,348 23,226 5,022
Securities available for sale, at
fair value 58,793 63,976 59,304
Securities held-to-maturity, at
amortized cost 3,087 3,544 3,133
Loans held for sale 16,020 11,869
Loans 416,121 332,112 400,784
Allowance for loan losses (4,700) (4,012) (4,532)
-------------------- ---------
Net loans 411,421 328,100 396,252
Premises and equipment, net 15,542 10,336 13,792
Other assets 13,992 9,493 10,744
-------------------- ---------
Total assets $ 524,203 $ 438,675 $ 500,116
==================== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 29,650 $ 31,580 $ 30,491
Interest-bearing 408,049 360,356 388,082
-------------------- ---------
Total deposits 437,699 391,936 418,573
Short-term borrowings 5,486 3,385 6,102
Federal Home Loan Bank advances 36,574 3,601 31,581
Junior subordinated debentures 10,310 10,310 10,310
Other liabilities 3,601 2,655 3,910
-------------------- ---------
Total liabilities 493,670 411,887 470,476
STOCKHOLDERS' EQUITY
Common stock and paid-in-capital,
no par value, 20,000,000 shares
authorized; issued and outstanding
- 3,342,966 shares at March 31, 2008,
3,266,866 shares at March 31, 2007,
and 3,315,157 shares at December 31,
2007 3,343 2,722 3,315
Additional paid-in capital 15,515 15,597 15,379
Retained earnings 11,401 8,552 10,875
Stock in director rabbi trust (588) (484) (524)
Directors deferred fees obligation 588 484 524
Accumulated other comprehensive
income (loss) 274 (83) 71
-------------------- ---------
Total stockholders' equity 30,533 26,788 29,640
-------------------- ---------
Total liabilities and stockholders'
equity $ 524,203 $ 438,675 $ 500,116
==================== =========
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three months ended March 31, 2008 and 2007
(unaudited)
For the Three
Months Ended
March 31,
----------------------
2008 2007
------------------------------------------- ----------------------
(in thousands, except
per share data)
Interest income:
Loans $ 7,318 $ 6,711
Investment securities - taxable 740 834
Investment securities - non taxable 82 1
Interest from federal funds sold 12 59
Other interest income 1 6
----------------------
Total interest income 8,153 7,611
Interest expense:
Deposits 4,073 3,915
FHLB advances and other 352 211
Junior subordinated debentures 163 188
----------------------
Total interest expense 4,588 4,314
----------------------
Net interest income 3,565 3,297
Provision for loan losses 235 255
----------------------
Net interest income after provision
for loan losses 3,330 3,042
Noninterest income:
Service charges 197 172
Mortgage banking income 575 65
Other 85 121
----------------------
Total noninterest income 857 358
Noninterest expense:
Salaries and benefits 1,755 1,299
Occupancy and equipment 379 304
Professional fees 289 187
Outside data processing 174 164
Advertising and promotion 115 116
Stationery, printing and supplies 108 116
Other 273 96
----------------------
Total noninterest expense 3,093 2,282
----------------------
Income before income taxes 1,094 1,118
Income taxes expense 392 417
----------------------
Net income $ 702 $ 701
======================
Basic earnings per common share $ 0.21 $ 0.21
Diluted earnings per common share $ 0.21 $ 0.21
Average common shares outstanding 3,341,061 3,266,866
Average common shares and dilutive
potential common shares outstanding 3,415,029 3,412,313
Total Shares outstanding at end of period 3,342,966 3,266,866
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
First Quarter 2008
(unaudited)
Quarterly
------------------------------------------------------
($ in thousands
except for 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
share data) 2008 2007 2007 2007 2007
------------------------------------------------------
EARNINGS
Net interest
income $ 3,565 3,542 3,627 3,705 3,297
Provision for
loan loss $ 235 420 272 215 255
NonInterest
income $ 857 645 386 340 358
NonInterest
expense $ 3,093 2,695 2,459 2,491 2,282
Net income $ 702 686 800 837 701
Basic earnings
per share $ 0.21 0.21 0.24 0.26 0.21
Diluted
earnings
per share $ 0.21 0.20 0.24 0.25 0.21
Average shares
outstanding 3,341,061 3,313,724 3,273,806 3,266,866 3,266,866
Average
diluted
shares
outstanding 3,415,029 3,394,797 3,392,116 3,408,938 3,412,313
PERFORMANCE
RATIOS
Return on
average
assets* 0.55% 0.57% 0.70% 0.76% 0.66%
Return on
average
common
equity* 9.29% 9.45% 11.55% 12.39% 10.65%
Net interest
margin
(fully-tax
equivalent)* 2.94% 3.08% 3.31% 3.53% 3.27%
Efficiency
ratio 69.95% 64.37% 61.28% 59.11% 62.44%
# full-time
equivalent
employees --
period end 96 89 86 77 74
CAPITAL
Equity to
ending assets 5.82% 5.93% 6.08% 6.13% 6.11%
Tier 1
leverage
capital ratio n/a 8.14% n/a n/a n/a
Tier 1
risk-based
capital ratio n/a 8.94% n/a n/a n/a
Total
risk-based
capital ratio n/a 10.00% n/a n/a n/a
Book value
per share $ 9.13 8.94 8.68 8.30 8.20
ASSET QUALITY
Net charge-
offs $ 25 364 21 2 141
Net charge-
offs to
average
loans* 0.02% 0.36% 0.02% 0.00% 0.17%
Allowance for
loan losses $ 4,700 4,532 4,476 4,225 4,012
Allowance for
loan losses
to loans
held invst. 1.13% 1.13% 1.19% 1.21% 1.21%
Nonperforming
loans $ 3,715 3,538 4,443 2,139 2,385
Restructured
loans $ 0 0 0 0 45
Other real
estate owned $ 592 1,001 190 0 0
Nonperforming
loans to
loans held
for
investment 0.89% 0.88% 1.19% 0.61% 0.73%
Nonperforming
assets to
total assets 0.82% 0.91% 0.99% 0.48% 0.55%
END OF PERIOD
BALANCES
Total assets $ 524,203 500,116 468,327 441,975 438,675
Total earning
assets $ 494,359 474,145 444,498 421,759 415,904
Total loans
held for
investment $ 416,121 400,784 374,602 349,782 332,112
Total
deposits $ 437,699 418,573 409,094 387,108 391,936
Stockholders'
equity $ 30,533 29,640 28,487 27,108 26,788
AVERAGE
BALANCES
Total assets $ 513,580 484,039 458,152 437,731 424,839
Total earning
assets $ 490,678 464,675 440,045 419,834 403,037
Total loans
held for
investment $ 412,521 399,223 363,801 345,115 326,161
Total
interest-
bearing
deposits $ 401,975 379,562 371,395 355,810 340,430
Stockholders'
equity $ 30,319 29,048 27,706 27,011 26,324
Year Ended
---------------------
($ in thousands except for share data) 2007 2006
--------- ---------
EARNINGS
Net interest income $ 14,171 12,189
Provision for loan loss $ 1,162 1,196
NonInterest income $ 1,729 1,773
NonInterest expense $ 9,927 8,381
Net income $ 3,024 2,811
Basic earnings per share $ 0.92 0.86
Diluted earnings per share $ 0.89 0.83
Average shares outstanding 3,280,315 3,265,557
Average diluted shares outstanding 3,402,711 3,383,070
PERFORMANCE RATIOS
Return on average assets * 0.67% 0.73%
Return on average common equity * 10.98% 11.63%
Net interest margin (fully-tax equivalent)* 3.30% 3.30%
Efficiency ratio 62.00% 59.48%
# full-time equivalent employees - period end 89 69
CAPITAL
Equity to ending assets 5.93% 6.30%
Tier 1 leverage capital ratio 8.14% 8.76%
Tier 1 risk-based capital ratio 8.94% 9.97%
Total risk-based capital ratio 10.00% 11.45%
Book value per share $ 8.94 7.94
ASSET QUALITY
Net charge-offs $ 528 508
Net charge-offs to average loans * 0.15% 0.18%
Allowance for loan losses $ 4,532 3,898
Allowance for loan losses to loans held invst. 1.13% 1.23%
Nonperforming loans $ 3,538 2,388
Restructured loans $ 0 45
Other real estate owned $ 1,001 0
Nonperforming loans to loans held for
investment 0.88% 0.77%
Nonperforming assets to total assets 0.91% 0.59%
END OF PERIOD BALANCES
Total assets $ 500,116 411,592
Total earning assets $ 474,145 390,644
Total loans held for investment $ 400,784 315,732
Total deposits $ 418,573 360,415
Stockholders' equity $ 29,640 25,929
AVERAGE BALANCES
Total assets $ 451,130 384,252
Total earning assets $ 431,926 369,298
Total loans held for investment $ 358,575 286,644
Total interest-bearing deposits $ 361,800 300,897
Stockholders' equity $ 27,541 24,165
* annualized for all periods presented