Carolina Bank Holdings, Inc. Reports Results for the Second

GREENSBORO, N.C., July 28, 2016 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported second quarter 2016 results with highlights as follows:

2nd Quarter 2016 Financial Highlights

Net income available to common shareholders, excluding merger expenses and related tax benefits, increased to $1,739,000, or $0.34 per diluted common share, in the second quarter of 2016 from $1,572,000, or $0.32 per diluted common share, in the second quarter of 2015. ^(1.)
Including merger expenses and related tax benefits, net income was $1,243,000, or $0.25 per diluted common share, in the second quarter of 2016.
Book value per common share increased to $12.71 at June 30, 2016 from $12.18 at December 31, 2015 and $11.72 at June 30, 2015.
Loans held for investment increased 4.8% during the second quarter of 2016 and are up 2.4% year-to-date.
Average non-interest bearing demand deposits increased 19.0% in the second quarter of 2016 from average non-interest bearing demand deposits in the second quarter of 2015.
Net interest margin on a fully-taxable basis increased to 3.73% in the second quarter of 2016 from 3.65% in the second quarter of 2015.
Nonperforming assets declined to $9.3 million, or 1.32% of assets, at June 30, 2016 from $17.1 million, or 2.5% of assets, at June 30, 2015. Net loan loss charge-offs were $351,000 and $1,694,000 in the second quarters of 2016 and 2015, respectively.
The Mortgage Division had net income of $285,000 in the second quarter of 2016 compared to net income of $649,000 in the second quarter of 2015.
Carolina Bank Holdings, Inc. (Nasdaq:CLBH) entered into a definitive merger agreement with First Bancorp (Nasdaq:FBNC) on June 21, 2016. CLBH stockholders are scheduled to receive either 1.002 shares of FBNC common stock or $20 in cash for each share of CLBH common stock, subject to total consideration being 75% stock/25% cash. Closing of the merger is contingent upon the receipt of required regulatory and shareholder approvals.

(1.) Net income available to common shareholders and diluted earnings per share, excluding merger expenses and related tax benefits, are not recognized under United States generally accepted accounting principles. These measures are calculated by excluding direct merger expenses, net of any reduction in income taxes, from net income.

Robert T. Braswell, President and CEO, commented, “I am pleased with our progress in building and improving our relationships with customers as evidenced by our growth in loans and non-interest bearing deposits during the second quarter. Excluding the impact of merger expenses, our net income in the second quarter of 2016, was the highest quarterly net income in three and a half years.”

“We have also made substantial improvements in our credit quality over the past few years which eliminated the need to make a provision for loan losses during the first six months of 2016. We believe that our strong credit culture and commitment to exceptional customer service compliment the similar efforts at First Bank. We are looking forward to a smooth merger with First Bank late this year or early next year and already see many future benefits for our customers and shareholders,” 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. 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.

The information as of and for the quarter ended June 30, 2016 is unaudited. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance or determinations 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, completion of our pending merger and successful merger integration, 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
			June 30,			December 31,
				2016			2015
			(unaudited)
			(in thousands, except share data)
Assets
Cash and due from banks			$	6,869		$	6,559
Interest-bearing deposits with banks				45,352			69,233
Bank term deposits				18,847			16,604
Securities available-for-sale, at fair value				45,610			47,360
Securities held-to-maturity (fair values of $14,988 in 2016 and $15,226 in 2015)				14,370			14,954
Loans held for sale				57,432			39,583
Loans				476,783			465,804
Less allowance for loan losses				(5,618	)		(5,872	)
		Net loans		471,165			459,932
Premises and equipment, net				18,618			19,007
Other real estate owned				4,212			4,592
Bank-owned life insurance				12,024			11,843
Other assets				11,996			11,131
		Total assets	$	706,495		$	700,798

Liabilities and Stockholders' Equity
Deposits
	Non-interest bearing demand		$	140,717		$	125,189
	NOW, money market and savings			337,313			349,815
	Time			121,118			132,303
		Total deposits		599,148			607,307

Advances from the Federal Home Loan Bank				12,627			2,681
Securities sold under agreements to repurchase				47			47
Subordinated debentures				19,610			19,610
Other liabilities and accrued expenses				10,943			10,014
		Total liabilities		642,375			639,659

Stockholders' equity
	Preferred stock, no par value, authorized 1,000,000 shares;
		Series A preferred stock - none issued and outstanding		-			-
		Series B convertible preferred stock - none issued and outstanding		-			-
	Common stock, $1 par value; authorized 20,000,000 shares; issued
		and outstanding 5,043,108 in 2016 and 5,021,330 in 2015		5,043			5,021
	Additional paid-in capital			29,448			29,234
	Retained earnings			28,518			26,174
	Stock in directors' rabbi trust			(2,015	)		(1,831	)
	Directors' deferred fees obligation			2,015			1,831
	Accumulated other comprehensive income			1,111			710
		Total stockholders’ equity		64,120			61,139
		Total liabilities and stockholders’ equity	$	706,495		$	700,798

Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
			Three Months				Six Months
			Ended June 30,				Ended June 30,
				2016		2015		2016		2015
			(in thousands, except per share data)
Interest income
	Loans		$	6,153	$	6,025	$	11,983	$	12,017
	Investment securities, taxable			325		325		717		663
	Investment securities, non taxable			115		125		233		247
	Interest from deposits in banks			140		65		294		126
		Total interest income		6,733		6,540		13,227		13,053

Interest expense
	NOW, money market, savings			227		237		466		476
	Time deposits			246		287		508		599
	Other borrowed funds			231		151		453		303
		Total interest expense		704		675		1,427		1,378

Net interest income				6,029		5,865		11,800		11,675
Provision for loan losses				-		535		-		835
Net interest income after provision for loan losses				6,029		5,330		11,800		10,840
Non-interest income
	Service charges			307		312		598		615
	Mortgage banking income			2,879		3,721		4,582		6,628
	Gain on sale of SBA loans			-		53		237		53
	Other			83		42		141		115
		Total non-interest income		3,269		4,128		5,558		7,411

Non-interest expense
	Salaries and benefits			4,443		4,582		8,680		8,900
	Occupancy and equipment			699		759		1,448		1,535
	Foreclosed property expense			43		155		88		24
	Professional fees			507		454		922		903
	Outside data processing			277		265		551		539
	FDIC insurance			108		130		201		261
	Advertising and promotion			213		160		490		353
	Stationery, printing and supplies			160		147		291		298
	Merger expense			585		-		585		-
	Other			419		449		828		830
		Total non-interest expense		7,454		7,101		14,084		13,643

Income before income taxes				1,844		2,357		3,274		4,608
Income tax expense				601		691		930		1,313
Net income				1,243		1,666		2,344		3,295
Dividends and accretion on preferred stock				-		94		-		341
Net income available to common stockholders			$	1,243	$	1,572	$	2,344	$	2,954
Net income per common share
	Basic		$	0.25	$	0.38	$	0.47	$	0.78
	Diluted		$	0.25	$	0.32	$	0.46	$	0.70

Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Second Quarter 2016
(unaudited)
		Quarterly															Years Ended
		2nd Qtr			1st Qtr			4th Qtr			3rd Qtr			2nd Qtr
($ in thousands except for share data)			2016			2016			2015			2015			2015			2015		2014

EARNINGS
Net interest income	$		6,029			5,771			6,081			5,889			5,865			23,645		23,257
Provision for loan losses	$		-			-			(200	)		450			535			1,085		1,436
NonInterest income	$		3,269			2,289			2,591			3,641			4,128			13,643		9,413
NonInterest expense	$		7,454			6,630			7,276			7,015			7,101			27,934		27,004
Net income	$		1,243			1,101			1,036			1,436			1,666			5,767		3,346
Net income available to common stockholders	$		1,243			1,101			1,036			1,436			1,572			5,426		2,413
Basic earnings per common share	$		0.25			0.22			0.21			0.29			0.38			1.24		0.70
Diluted earnings per common share	$		0.25			0.22			0.21			0.29			0.32			1.17		0.70
Average common shares outstanding			5,038,723			5,036,150			5,008,301			4,990,163			4,099,303			4,389,086		3,431,385
Average diluted common shares outstanding			5,042,626			5,041,038			5,019,056			5,000,352			4,988,938			4,620,411		3,433,603

PERFORMANCE RATIOS
Return on average assets *			0.71	%		0.63	%		0.59	%		0.83	%		0.96	%		0.84	%	0.50	%
Return on average common equity ** *			7.89	%		7.14	%		6.79	%		9.59	%		11.38	%		9.96	%	6.05	%
Net interest margin (fully-tax equivalent) *			3.73	%		3.61	%		3.79	%		3.74	%		3.65	%		3.73	%	3.80	%
Efficiency ratio (excluding merger expenses)			72.89	%		80.98	%		83.05	%		72.94	%		70.38	%		74.18	%	81.78	%
Efficiency ratio (excluding mortgage div/merger X)			67.93	%		71.95	%		75.06	%		73.29	%		69.79	%		71.72	%	71.73	%
# full-time equivalent employees - period end			187			190			192			190			192			192		189

CAPITAL
Equity to period-end assets			9.08	%		8.88	%		8.72	%		8.72	%		8.55	%		8.72	%	7.75	%
Common tangible equity to assets			9.08	%		8.88	%		8.72	%		8.72	%		8.55	%		8.72	%	6.13	%
Tier 1 leverage capital ratio - Bank			9.94	%		9.74	%		9.71	%		9.65	%		9.24	%		9.71	%	9.11	%
Tier 1 risk-based capital ratio - Bank			12.20	%		12.62	%		12.09	%		11.66	%		11.23	%		12.09	%	11.42	%
Total risk-based capital ratio - Bank			13.82	%		14.40	%		13.81	%		13.90	%		13.21	%		13.81	%	13.67	%
Book value per common share	$		12.71			12.45			12.18			12.04			11.72			12.18		12.13

ASSET QUALITY
Net loan charge-offs (recoveries)	$		351			(97	)		1,495			(1,321	)		1,694			1,733		2,579
Net charge-offs (recoveries) to average loans *			0.30	%		-0.08	%		1.29	%		-1.15	%		1.45	%		0.37	%	0.56	%
Allowance for loan losses	$		5,618			5,969			5,872			7,567			5,795			5,872		6,520
Allowance for loan losses to loans held invst.			1.18	%		1.31	%		1.26	%		1.62	%		1.26	%		1.26	%	1.38	%
Nonperforming loans	$		5,101			3,519			3,110			8,964			11,716			3,110		6,458
Performing restructured loans	$		9,486			12,078			9,687			9,317			9,450			9,687		9,774
Other real estate owned	$		4,212			4,587			4,592			5,073			5,352			4,592		5,610
Nonperforming loans to loans held for investment			1.07	%		0.77	%		0.67	%		1.92	%		2.54	%		0.67	%	1.37	%
Nonperforming assets to total assets			1.32	%		1.15	%		1.10	%		2.04	%		2.50	%		1.10	%	1.78	%

END OF PERIOD BALANCES
Total assets	$		706,495			705,704			700,798			688,974			683,685			700,798		679,263
Total loans held for investment	$		476,783			455,139			465,804			465,889			461,000			465,804		472,189
Total deposits	$		599,148			601,073			607,307			596,489			592,719			607,307		594,898
Stockholders' equity	$		64,120			62,687			61,139			60,098			58,460			61,139		52,655

AVERAGE BALANCES
Total assets	$		706,633			702,473			692,522			684,917			699,101			689,842		664,812
Total earning assets	$		663,082			657,915			646,158			633,304			654,317			643,031		620,996
Total loans held for investment	$		470,021			466,301			463,285			459,538			465,914			465,163		462,870
Total non interest-bearing demand deposits	$		141,092			129,367			125,279			119,074			118,577			118,355		94,618
Common stockholders' equity	$		63,349			61,979			60,522			59,384			55,414			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 Results for the Second Quarter of 2016

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