Carolina Bank Holdings, Inc. Reports a 67% Increase in EPS

GREENSBORO, N.C., Jan. 29, 2016 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (NASDAQ:CLBH) today reported 2015 annual and fourth quarter results with highlights as follows:

2015 and 4^th Quarter Financial Highlights

Nonperforming assets declined to $7.7 million, or 1.10% of assets, at December 31, 2015 compared to $14.0 million, or 2.0% of assets, at September 30, 2015.
Average non-interest bearing demand deposits increased 25.1% in 2015 from 2014.
Net income available to common shareholders increased to $5.4 million in 2015 from $2.4 million in 2014. Diluted net income per common share increased to $1.17 in 2015 from $0.70 in 2014.
Net income available to common shareholders decreased 3.4% to $1,036,000 in the fourth quarter of 2015 from $1,072,000 in the fourth quarter of 2014.
Assets increased 3.2% in 2015 to $700.8 million at December 31, 2015.
The number of common shares outstanding increased to 5,021,330 at December 31, 2015 from 3,434,680 at December 31, 2014, primarily due to convertible preferred stock issued on March 31, 2015 which was converted into 1,550,000 shares of common stock on May 22, 2015.
The Mortgage Division realized net income of $1,550,000 in 2015 compared to a loss of $702,000 in 2014. The Mortgage Division had a net loss of $100,000 in the fourth quarter of 2015 compared to net income of $76,000 in the fourth quarter of 2014.

Robert T. Braswell, President and CEO, commented, “I am pleased to report that our asset quality improved substantially in the fourth quarter with a reduction of 45% in our nonperforming assets. We realized higher net proceeds than previously estimated on the payoff of nonperforming loans which resulted in a reduction in our provision for loan losses in the fourth quarter. With the improvement in asset quality, we are increasing our efforts at growing the loan portfolio and reducing professional costs related to nonperforming assets.”

“We continue to build value for shareholders with our emphasis on increasing non-interest bearing demand deposits as average balances in 2015 increased over 25% from average balances in 2014. While we are pleased with the performance of our mortgage division in 2015, which realized net income of over $1.5 million, our fourth quarter results in the mortgage division were less than expected due to regulatory changes and declining originations. We have recently taken steps to improve internal processes in the mortgage division to allow us to effectively manage future growth,” said Braswell.

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, three in Greensboro, one in Asheboro, one in High Point, one in Burlington, and two in Winston-Salem. Our Greensboro Friendly Center branch closed on July 31, 2015 due to an expiring lease in late 2015. Our second full-service office in Winston-Salem, opened in August of 2015. Residential mortgage loan production offices are located in Burlington, Chapel Hill, and Sanford in addition to a wholesale residential mortgage operation in Greensboro. 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.

Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Balance Sheets
				December 31,
					2015			2014
				(unaudited)
			(in thousands, except share data)
Assets
Cash and due from banks				$	6,559		$	7,942
Interest-bearing deposits with banks					69,233			38,232
Bank term deposits					16,604			14,106
Securities available-for-sale, at fair value					47,360			51,200
Securities held-to-maturity (fair values of $15,226 in 2015 and $15,945 in 2014)					14,954			15,644
Loans held for sale					39,583			39,780
Loans					465,804			472,189
Less allowance for loan losses					(5,872	)		(6,520	)
		Net loans			459,932			465,669
Premises and equipment, net					19,007			18,311
Other real estate owned					4,592			5,610
Bank-owned life insurance					11,843			11,483
Other assets					11,131			11,286
		Total assets		$	700,798		$	679,263

Liabilities and Stockholders' Equity
Deposits
	Non-interest bearing demand			$	125,189		$	106,163
	NOW, money market and savings				349,815			344,919
	Time				132,303			143,816
		Total deposits			607,307			594,898

Advances from the Federal Home Loan Bank					2,681			2,785
Securities sold under agreements to repurchase					47			176
Subordinated debentures					19,610			19,610
Other liabilities and accrued expenses					10,014			9,139
		Total liabilities			639,659			626,608

Stockholders' equity
	Preferred stock, no par value, authorized 1,000,000 shares;
		issued and outstanding 10,994 shares			-			10,994
	Common stock, $1 par value; authorized 20,000,000 shares;
		issued and outstanding 5,021,330 in 2015 and 3,434,680 in 2014			5,021			3,435
	Additional paid-in capital				29,234			16,339
	Retained earnings				26,174			20,748
	Stock in directors' rabbi trust				(1,831	)		(1,465	)
	Directors' deferred fees obligation				1,831			1,465
	Accumulated other comprehensive income				710			1,139
		Total stockholders’ equity			61,139			52,655
		Total liabilities and stockholders’ equity		$	700,798		$	679,263

Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
			Three Months					Years Ended
			Ended December 31,					December 31,
				2015			2014		2015		2014

			(in thousands, except per share data)
Interest income
	Loans		$	6,235		$	6,417	$	24,314	$	24,168
	Investment securities, taxable			325			331		1,310		1,547
	Investment securities, non taxable			116			123		479		532
	Interest from deposits in banks			84			51		267		201
		Total interest income		6,760			6,922		26,370		26,448

Interest expense
	NOW, money market, savings			240			241		953		957
	Time deposits			266			372		1,142		1,593
	Other borrowed funds			173			145		630		641
		Total interest expense		679			758		2,725		3,191

Net interest income				6,081			6,164		23,645		23,257
Provision for (recovery of) loan losses				(200	)		50		1,085		1,436
Net interest income after provision for loan losses				6,281			6,114		22,560		21,821
Non-interest income
	Service charges			313			329		1,232		1,269
	Mortgage banking income			2,206			2,370		12,054		7,771
	Gain on sale of investment securities available-for-sale			-			18		27		274
	Other			72			4		330		99
		Total non-interest income		2,591			2,721		13,643		9,413

Non-interest expense
	Salaries and benefits			4,351			4,578		17,784		16,951
	Occupancy and equipment			787			749		3,105		3,070
	Foreclosed property expense			226			96		317		270
	Professional fees			761			374		2,138		1,781
	Outside data processing			270			290		1,079		1,090
	FDIC insurance			105			135		498		534
	Advertising and promotion			354			222		932		938
	Stationery, printing and supplies			135			134		582		560
	Other			287			550		1,499		1,810
		Total non-interest expense		7,276			7,128		27,934		27,004

Income before income taxes				1,596			1,707		8,269		4,230
Income tax expense				560			388		2,502		884
Net income				1,036			1,319		5,767		3,346
Dividends and accretion on preferred stock				-			247		341		933
Net income available to common stockholders			$	1,036		$	1,072	$	5,426	$	2,413
Net income per common share
	Basic		$	0.21		$	0.31	$	1.24	$	0.70
	Diluted		$	0.21		$	0.31	$	1.17	$	0.70

Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Fourth Quarter 2015
(unaudited)
		Quarterly															Years Ended
		4th Qtr			3rd Qtr			2nd Qtr			1st Qtr			4th Qtr
($ in thousands except for share data)			2015			2015			2015			2015			2014			2015		2014

EARNINGS
Net interest income	$		6,081			5,889			5,865			5,810			6,164			23,645		23,257
Provision for loan losses	$		(200	)		450			535			300			50			1,085		1,436
NonInterest income	$		2,591			3,641			4,128			3,283			2,721			13,643		9,413
NonInterest expense	$		7,276			7,015			7,101			6,542			7,128			27,934		27,004
Net income	$		1,036			1,436			1,666			1,629			1,319			5,767		3,346
Net income available to common stockholders	$		1,036			1,436			1,572			1,382			1,072			5,426		2,413
Basic earnings per common share	$		0.21			0.29			0.38			0.40			0.31			1.24		0.70
Diluted earnings per common share	$		0.21			0.29			0.32			0.40			0.31			1.17		0.70
Average common shares outstanding			5,008,301			4,990,163			4,099,303			3,434,680			3,434,680			4,389,086		3,431,385
Average diluted common shares outstanding			5,019,056			5,000,352			4,988,938			3,451,902			3,434,680			4,620,411		3,433,603

PERFORMANCE RATIOS
Return on average assets *			0.59	%		0.83	%		0.96	%		0.97	%		0.78	%		0.84	%	0.50	%
Return on average common equity ** *			6.79	%		9.59	%		11.38	%		13.24	%		10.36	%		9.96	%	6.05	%
Net interest margin (fully-tax equivalent) *			3.79	%		3.74	%		3.65	%		3.75	%		3.95	%		3.73	%	3.80	%
Efficiency ratio			83.05	%		72.94	%		70.38	%		71.21	%		79.39	%		74.18	%	81.78	%
Efficiency ratio (excluding mortgage division)			75.06	%		73.29	%		69.79	%		68.63	%		73.94	%		71.72	%	71.73	%
# full-time equivalent employees - period end			192			190			192			191			189			192		189

CAPITAL
Equity to period-end assets			8.72	%		8.72	%		8.55	%		9.60	%		7.75	%		8.72	%	7.75	%
Common tangible equity to assets			8.72	%		8.72	%		8.55	%		6.07	%		6.13	%		8.72	%	6.13	%
Tier 1 leverage capital ratio - Bank			9.71	%		9.65	%		9.24	%		9.20	%		9.11	%		9.71	%	9.11	%
Tier 1 risk-based capital ratio - Bank			12.09	%		11.66	%		11.23	%		11.25	%		11.42	%		12.09	%	11.42	%
Total risk-based capital ratio - Bank			13.81	%		13.90	%		13.21	%		13.50	%		13.67	%		13.81	%	13.67	%
Book value per common share	$		12.18			12.04			11.72			11.48			12.13			12.18		12.13

ASSET QUALITY
Net loan charge-offs (recoveries)	$		1,495			(1,321	)		1,694			(134	)		76			1,733		2,579
Net charge-offs (recoveries) to average loans *			1.29	%		-1.15	%		1.45	%		-0.11	%		0.06	%		0.37	%	0.56	%
Allowance for loan losses	$		5,872			7,567			5,795			6,954			6,520			5,872		6,520
Allowance for loan losses to loans held invst.			1.26	%		1.62	%		1.26	%		1.49	%		1.38	%		1.26	%	1.38	%
Nonperforming loans	$		3,110			8,964			11,716			6,362			6,458			3,110		6,458
Performing restructured loans	$		9,687			9,317			9,450			9,548			9,774			9,687		9,774
Other real estate owned	$		4,592			5,073			5,352			5,116			5,610			4,592		5,610
Nonperforming loans to loans held for investment			0.67	%		1.92	%		2.54	%		1.36	%		1.37	%		0.67	%	1.37	%
Nonperforming assets to total assets			1.10	%		2.04	%		2.50	%		1.62	%		1.78	%		1.10	%	1.78	%

END OF PERIOD BALANCES
Total assets	$		700,798			688,974			683,685			710,672			679,263			700,798		679,263
Total loans held for investment	$		465,804			465,889			461,000			467,232			472,189			465,804		472,189
Total deposits	$		607,307			596,489			592,719			609,417			594,898			607,307		594,898
Stockholders' equity	$		61,139			60,098			58,460			68,238			52,655			61,139		52,655

AVERAGE BALANCES
Total assets	$		692,522			684,917			699,101			682,777			675,159			689,842		664,812
Total earning assets	$		646,158			633,304			654,317			638,368			629,331			643,031		620,996
Total loans held for investment	$		463,285			459,538			465,914			472,073			475,106			465,163		462,870
Total non interest-bearing demand deposits	$		125,279			119,074			118,577			110,318			104,241			118,355		94,618
Common stockholders' equity	$		60,522			59,384			55,414			42,341			41,065			54,479		39,904

* annualized for all periods presented
**return on average common equity is computed using net income available to common stockholders

Carolina Bank Holdings, Inc. Reports a 67% Increase in EPS to $1.17 in 2015

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