GREENSBORO, N.C., Oct. 26, 2009 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported deposit growth of $96.8 million, or 19.4%, for the first nine months of 2009 and 27.9% for the year ended September 30, 2009 to $594.9 million. The additional deposits have funded loan growth of $35.2 million and allowed for a reduction of $53.8 million in wholesale funding from the Federal Home Loan Bank and from Federal funds purchased during the first nine months of 2009. Robert T. Braswell, President and CEO, commented, "Our increased focus on deposit gathering is paying off in sharply higher core deposits which have increased shareholder value. We are especially pleased to report that all deposit growth in 2009 was in transactional accounts which generally produce a lower cost. Customers in our expanded footprint in the Triad of North Carolina are pleased to have same day credit for deposits, free ATM transactions, convenient locations, competitive pricing and exceptional service and are showing their enthusiasm by opening new accounts and increasing balances."
The Company reported net income for the third quarter of 2009 of $169,000 and net loss available to common stockholders of $108,000, or ($0.03) per diluted common share, compared to net income of $704,000, or $0.21 per diluted common share in the third quarter of 2008. The issuance of preferred stock contributed to the net loss available to common stockholders and lower diluted earnings per share in 2009. Net income before income taxes, the provision for loan losses, and repossessed asset losses was $2.5 million in the third quarter of 2009 compared to $1.5 million in the third quarter of 2008. The provision for loan losses and repossessed asset losses were $2.4 million in the third quarter of 2009 compared to $0.4 million in the second quarter of 2008.
Robert T. Braswell, President and CEO of Carolina Bank Holdings, commented, "Our core earnings before provision for loan losses, repossessed asset losses, and increased FDIC insurance has been aided by an improved net interest margin which increased 39 basis points from a year ago and from strong fee income from our mortgage division. These base earnings doubled from the third quarter of last year. We have been challenged by the current credit environment but are pleased with the performance of our mortgage division and our success in net interest margin improvement."
Net interest income for the third quarter of 2009 increased $1.3 million from the same quarter in 2008, or 32.5% to $5.1 million, reflecting a 17.0% increase in average earning assets and a 39 basis point increase in the net interest margin to 3.25%.
Non-interest income for the third quarter of 2009 was $1.6 million, an increase of $0.5 million from the third quarter of 2008. Mortgage banking income which consists of fees from the origination and sale of residential mortgage loans, increased to $2.0 million in the third quarter of 2009 from $0.6 million in the third quarter of 2008. Non-interest income in the third quarter of 2009 included repossessed asset losses of $695,000 and a loss on the sale of an investment in an asset management company of $136,000.
Non-interest expense was $4.8 million in the third quarter of 2009, an increase of 41.0% from the third quarter of 2008. A new corporate office and full service branch in downtown Greensboro, a growing office in Winston-Salem, higher FDIC premiums and the expanded wholesale mortgage division accounted for most of the new expense in 2009.
Mr. Braswell added, "We continue to concentrate on our bank's asset quality as our non-performing assets have risen in 2009 due to economic weakness and the related impact on some of our business customers. We are disappointed in the increase in non-performing assets over the past three quarters and are working to reduce them. On a positive note, we repurchased in September 2009, $5.6 million in loan participations at a discount from the FDIC which we had previously sold to Silverton Bank and expect to realize an increased yield on these loans as they payoff." Non-performing assets were $22.1 million, or 3.26% of assets at September 30, 2009, compared with $6.4 million, or 1.04% of assets at December 31, 2008. The bank had annualized net charge-offs of 0.95% and 0.09% of average loans in the first nine months of 2009 and 2008, respectively. The allowance for loan losses was 1.33% and 1.14% of loans held for investment at September 30, 2009 and 2008, respectively.
Net income for the nine months ended September 30, 2009 was $1,169,000 and net income available to common stockholders was $354,000, or $0.10 per diluted common share, compared to $2,014,000, or $0.59 per diluted share, for the same period in 2008.
Shareholders' equity was strengthened during 2009 from the issuance of $16.0 million of preferred stock to the United States Treasury under the UST Capital Purchase Program and from an increase in retained earnings. Dividends paid and accrued to the United States Treasury and accretion of the discount on the preferred stock totaled $815,000 in the first nine months of 2009.
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 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 September 30, 2009 and 2008 and December 31, 2008
(unaudited)
September 30, December 31,
2009 2008 2008
-------------------------------------------------------- ------------
(in thousands)
ASSETS
Cash and due from banks $ 1,343 $ 10,602 $ 5,896
Short-term investments and
interest-earning deposits 29,932 124 51
Federal funds sold -- 2,633 1
---------------------- ------------
Total cash and cash
equivalents 31,275 13,359 5,948
Securities available for sale,
at fair value 54,387 55,894 59,803
Securities held-to-maturity, at
amortized cost 853 1,156 1,116
Loans held for sale 24,979 15,023 19,163
Loans 530,791 477,298 501,424
Allowance for loan losses (7,038) (5,454) (5,760)
---------------------- ------------
Net loans 523,753 471,844 495,664
Premises and equipment, net 19,408 19,401 19,652
Other assets 22,171 14,687 15,265
---------------------- ------------
Total assets $ 676,826 $ 591,364 $ 616,611
====================== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 36,683 $ 27,190 $ 29,367
Interest-bearing 558,180 437,779 468,697
---------------------- ------------
Total deposits 594,863 464,969 498,064
Short-term borrowings 976 15,275 6,591
Federal Home Loan Bank advances 7,202 56,659 56,856
Subordinated debentures 19,321 19,246 19,265
Other liabilities 4,447 3,858 4,259
---------------------- ------------
Total liabilities 626,809 560,007 585,035
STOCKHOLDERS' EQUITY
Preferred stock, no par,
authorized 1,000,000 shares;
issued and outstanding 16,000
shares in 2009 and none in 2008 14,392 -- --
Common stock, $1 par value,
20,000,000 shares authorized;
issued and outstanding -
3,387,045 shares in 2009 and
3,348,193 in 2008 3,387 3,348 3,348
Common stock warrants 1,841 -- --
Additional paid-in capital 15,790 15,556 15,586
Retained earnings 13,247 12,713 12,893
Stock in director rabbi trust (821) (687) (648)
Directors deferred fees
obligation 821 687 648
Accumulated other comprehensive
income (loss) 1,360 (260) (251)
---------------------- ------------
Total stockholders' equity 50,017 31,357 31,576
---------------------- ------------
Total liabilities and
stockholders' equity $ 676,826 $ 591,364 $ 616,611
====================== ============
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three and nine months ended September 30, 2009 and 2008
(unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
-------------------- --------------------
2009 2008 2009 2008
---------------------------------------------- --------------------
(in thousands, except per share data)
Interest income:
Loans $ 7,512 $ 7,209 $ 22,139 $ 21,474
Investment securities -
taxable 526 655 1,652 2,079
Investment securities -
non taxable 154 98 412 269
Interest from federal
funds sold 2 7 2 27
Other interest income 19 1 20 2
-------------------- --------------------
Total interest income 8,213 7,970 24,225 23,851
Interest expense:
NOW, money market,
savings 1,188 1,123 3,302 3,312
Time deposits 1,639 2,445 5,809 7,943
Other borrowed funds 271 542 947 1,460
-------------------- --------------------
Total interest
expense 3,098 4,110 10,058 12,715
-------------------- --------------------
Net interest income 5,115 3,860 14,167 11,136
Provision for loan
losses 1,737 350 4,968 1,205
-------------------- --------------------
Net interest income
after provision for
loan losses 3,378 3,510 9,199 9,931
Noninterest income:
Service charges 299 248 797 654
Mortgage banking income 1,962 643 6,570 2,045
Gain (loss) on sale of
investments (136) -- 99 227
Repossesed asset gains
(losses) & (write-
downs) (695) 2 (644) 14
Other 149 141 401 372
-------------------- --------------------
Total noninterest
income 1,579 1,034 7,223 3,312
Noninterest expense:
Salaries and benefits 2,520 1,948 7,483 5,629
Occupancy and
equipment 583 451 1,752 1,250
Professional fees 295 262 895 945
Outside data
processing 209 192 615 530
FDIC Insurance 257 133 977 424
Advertising and
promotion 145 126 435 375
Stationery, printing
and supplies 138 107 423 374
Impairment of
marketable securities 85 -- 850 --
Other 609 215 1,402 600
-------------------- --------------------
Total noninterest
expense 4,841 3,434 14,832 10,127
-------------------- --------------------
Income before income
taxes 116 1,110 1,590 3,116
Income taxes expense (53) 406 421 1,102
Net income 169 704 1,169 2,014
-------------------- --------------------
Dividends and accretion
on preferred stock 277 -- 815 --
Net income available to
common stockholders $ (108) $ 704 $ 354 $ 2,014
==================== ====================
Basic earnings per
common share $ (0.03) $ 0.21 $ 0.10 $ 0.60
Diluted earnings per
common share $ (0.03) $ 0.21 $ 0.10 $ 0.59
Average common shares
outstanding 3,387,045 3,343,818 3,382,100 3,342,615
Average common shares
and dilutive potential
common shares
outstanding 3,387,045 3,367,778 3,384,131 3,393,427
Total Shares outstanding
at end of period 3,387,045 3,348,193 3,387,045 3,348,193
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Third Quarter 2009
(unaudited)
Quarterly
-----------------------------------------------------
($ in thousands
except for 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr.
share data) 2009 2009 2009 2008 2008
-----------------------------------------------------
EARNINGS
Net interest
income $ 5,115 4,740 4,312 3,591 3,860
Provision for
loan loss $ 1,737 2,036 1,195 705 350
NonInterest
income $ 1,579 3,242 2,402 1,297 1,034
NonInterest
expense $ 4,841 5,514 4,482 3,931 3,434
Net income $ 169 335 665 180 704
Net income
available to
common stock-
holders $ (108) 51 411 180 704
Basic earnings
per share $ (0.03) 0.02 0.12 0.05 0.21
Diluted
earnings per
share $ (0.03) 0.02 0.12 0.05 0.21
Average shares
outstanding 3,387,045 3,387,045 3,451,559 3,348,193 3,343,818
Average diluted
shares
outstanding 3,387,045 3,387,045 3,455,621 3,366,244 3,367,778
PERFORMANCE
RATIOS
Return on
average
assets * -0.06% 0.03% 0.26% 0.12% 0.49%
Return on
average common
equity * -1.22% 0.60% 4.96% 2.31% 8.99%
Net interest
margin (fully-
tax equiv-
alent) * 3.25% 3.15% 2.96% 2.56% 2.86%
Efficiency
ratio 71.55% 68.55% 68.65% 79.64% 69.54%
# full-time
equivalent
employees -
period end 136 136 119 119 114
CAPITAL
Equity to
ending assets 7.39% 7.25% 7.53% 5.12% 5.30%
Common tangible
equity to
assets 5.26% 5.13% 5.28% 5.12% 5.30%
Tier 1 leverage
capital ratio
- Bank N/A 8.10% 8.32% 7.00% 7.28%
Tier 1 risk-
based capital
ratio - Bank N/A 8.86% 9.25% 7.62% 7.78%
Total risk-
based capital
ratio - Bank N/A 11.61% 12.01% 10.29% 10.47%
Book value per
share $ 10.52 10.22 9.88 9.43 9.28
ASSET QUALITY
Net charge-offs
(recoveries) $ 2,259 1,225 206 399 (2)
Net charge-offs
to average
loans * 1.73% 0.94% 0.16% 0.33% 0.00%
Allowance for
loan losses $ 7,038 7,560 6,749 5,760 5,454
Allowance for
loan losses to
loans held
invst. 1.33% 1.42% 1.31% 1.15% 1.14%
Nonperforming
loans $ 14,407 16,829 12,201 5,656 2,912
Restructured
loans $ 0 0 0 0 0
Repossessed
assets $ 7,676 5,329 1,288 728 441
Nonperforming
loans to loans
held for
investment 2.71% 3.16% 2.37% 1.13% 0.61%
Nonperforming
assets to
total assets 3.26% 3.28% 2.13% 1.04% 0.57%
END OF PERIOD
BALANCES
Total assets $676,826 675,192 633,804 616,611 591,364
Total loans
held for
investment $530,791 532,954 514,203 501,424 477,298
Total deposits $594,863 558,790 521,447 498,064 464,969
Stockholders'
equity $ 50,017 48,942 47,715 31,576 31,357
AVERAGE BALANCES
Total assets $679,780 654,900 633,012 598,800 571,941
Total earning
assets $633,107 612,353 598,620 563,769 541,231
Total loans
held for
investment $523,019 521,406 514,292 486,472 470,730
Total interest-
bearing
deposits $545,912 570,202 478,247 453,645 427,669
Common stock-
holders'
equity $ 35,097 34,288 33,614 30,911 31,058
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
Net income available to common stockholders 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 119 89
CAPITAL
Equity to ending assets 5.12% 5.93%
Common tangible equity to 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
Repossessed assets 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 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
Common stockholders' equity 30,771 27,541
* annualized for all periods presented