Carolina Bank Holdings, Inc. Reports Record 1st Quarter Net Income

Mon Apr 30, 2012 4:57pm EDT

* Reuters is not responsible for the content in this press release.

GREENSBORO, N.C., April 30, 2012 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported first quarter 2012 results with highlights as follows:

First Quarter 2012 Financial Highlights

  • Net income for the first quarter of 2012 was a record $1,228,000, an increase of 100.7% from net income of $612,000 reported in the first quarter of 2011.
  • Diluted net income per common share increased 170% to $0.27 in the first quarter of 2012 from $0.10 in the first quarter of 2011.
  • Net income available to common shareholders was $926,000 in the first quarter of 2012 compared to $324,000 in the first quarter of 2011.
  • The net interest margin, computed on a fully taxable basis, increased to 3.98% in the first quarter of 2012 compared to 3.88% in the first quarter of 2011.
  • Mortgage banking income increased 101.7% to $3,297,000 in the first quarter of 2012 from $1,635,000 in the first quarter of 2011.
  • Carolina Bank, the subsidiary of Carolina Bank Holdings, Inc., continued to maintain 'Well Capitalized' status, the highest regulatory capital measure. Capital ratios at December 31, 2012 for Carolina Bank improved to 8.35% for Tier 1 leverage, 9.92% for Tier 1 risk-based, and 12.83% for total risk-based.
  • Average non-interest-bearing demand deposits increased 28.2% in the first quarter of 2012 from the same quarter in 2011.
  • Net loan charge-offs declined 53.7% to $762,000, or 0.64% of average loans (annualized), in 2012 from $1,645,000, or 1.29% of average loans (annualized), in 2011.

Robert T. Braswell, President and CEO of Carolina Bank Holdings, Inc., commented, "We continued our goal of building shareholder value during 2012 by increasing net income and capital ratios, growing our non-interest income, and strengthening relationships with our customers. Our net interest margin of 3.98% in the first quarter of 2012 was the second highest quarter in eleven years. We expanded our mortgage division with the addition of a loan production office in Raleigh in March of 2012 under the leadership of Lynette Schehr who works with Michelle Roten, Vice President and leader of our Retail Mortgage Division. Our mortgage division experienced strong originations and good profitability during the first quarter of 2012."

Non-performing loans to total loans held for investment decreased to 4.82% at March 31, 2012 from 5.71% at March 31, 2011. Non-performing assets to total assets decreased to 4.62% at March 31, 2012 from 6.00% at March 31, 2011. While these ratios declined from a year ago, they were slightly higher than at December 31, 2011 due to the addition of one loan relationship. Net loan charge-offs declined 53.7% to $762,000 in the first quarter of 2012 from $1,645,000 in the first quarter of 2011. Braswell commented, "We are continuing our focus in bringing down the elevated level of non-performing assets in 2012 and are pleased that loan charge-offs declined substantially in 2012. Our continued focus and efforts to develop a stronger credit culture are progressing well and should improve future results for our shareholders. We were also able to improve our capital ratios in 2012 through the retention of earnings and managed growth."

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 and mortgage loan production offices in Burlington and Raleigh. 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     
     
  March 31,
2012
December 31,
2011
  (unaudited)  
  (in thousands except share and per share data)
Assets    
Cash and due from banks  $ 6,100  $ 5,664
Interest-bearing deposits with banks  15,130  7,647
Securities available-for-sale, at fair value 44,929 42,208
Securities held-to-maturity 370 392
Loans held for sale 81,497 91,955
Loans  480,888 487,031
Less allowance for loan losses (12,491) (11,793)
Net loans  468,397 475,238
Premises and equipment, net 17,454 17,442
Other real estate owned 7,708 6,728
Bank-owned life insurance 10,480 10,385
Other assets 15,944 15,666
Total assets  $ 668,009  $ 673,325
     
Liabilities and Stockholders' Equity    
Deposits    
Non-interest bearing demand  $ 57,172  $ 57,475
NOW, money market and savings 325,636 324,449
Time 205,692 214,715
Total deposits 588,500 596,639
     
Advances from the Federal Home Loan Bank 3,053 3,075
Securities sold under agreements to repurchase 1,918 1,536
Subordinated debentures 19,507 19,489
Other liabilities and accrued expenses 7,088 6,028
Total liabilities 620,066 626,767
     
Commitments     
Stockholders' equity    
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding 16,000 shares in 2012 and 2011 15,273 15,177
Common stock, $1 par value; authorized 20,000,000 shares; issued and outstanding 3,387,045 in 2012 and 2011 3,387 3,387
Common stock warrants 1,841 1,841
Additional paid-in capital 15,879 15,870
Retained earnings  10,058 9,132
Stock in directors' rabbi trust (912) (875)
Directors' deferred fees obligation 912 875
Accumulated other comprehensive income  1,505 1,151
Total stockholders' equity 47,943 46,558
Total liabilities and stockholders' equity  $ 668,009  $ 673,325
     
Carolina Bank Holdings, Inc. and Subsidiary    
Consolidated Statements of Operations (unaudited)    
   
  Three Months Ended
March 31, 
  2012 2011
  (in thousands, except per share data)
Interest income    
Loans  $ 7,085  $ 7,150
Investment securities, taxable  306  401
Investment securities, non taxable  107  162
Interest from deposits in banks  10  20
Total interest income  7,508  7,733
     
Interest expense    
NOW, money market, savings  548  660
Time deposits  709  967
Other borrowed funds  202  188
Total interest expense  1,459  1,815
     
Net interest income  6,049  5,918
Provision for loan losses  1,460  1,700
Net interest income after provision for loan losses  4,589  4,218
Non-interest income    
Service charges  283  231
Mortgage banking income  3,297  1,635
Gain on sale of investment securities  --  97
Loss on sale of other real estate owned  48  --
Other  172  147
Total non-interest income  3,800  2,110
     
Non-interest expense    
Salaries and benefits  4,030  2,964
Occupancy and equipment  682  638
Professional fees  257  253
Outside data processing  206  219
FDIC insurance  215  385
Advertising and promotion  175  87
Stationery, printing and supplies  135  139
Impairment of other real estate owned 296 --
Other real estate owned expense  156  294
Other  539  491
Total non-interest expense  6,691  5,470
     
Income before income taxes  1,698  858
Income tax expense   470  246
Net income   1,228  612
Dividends and accretion on preferred stock  302  288
Net income available to common stockholders  $ 926  $ 324
     
Net income per common share    
Basic  $ 0.27  $ 0.10
Diluted  $ 0.27  $ 0.10
     
Carolina Bank Holdings, Inc.    
Consolidated Financial Highlights     
First Quarter 2012    
(unaudited)    
    Quarterly  Years Ended
($ in thousands except for share data)   1st Qtr
2012
4th Qtr
2011
3rd Qtr.
2011
2nd Qtr.
2011
1st Qtr.
2011
2011 2010
                 
EARNINGS                
Net interest income $ 6,049 6,442 5,991 5,744 5,918  24,095  23,341
Provision for loan loss $ 1,460 1,700 1,800 1,650 1,700  6,850  15,133
NonInterest income $ 3,800 3,426 3,184 2,620 2,110  11,340  13,375
NonInterest expense $ 6,691 6,777 6,362 7,022 5,470  25,631  26,061
Net income (loss)  $ 1,228 1,031 812 (58) 612  2,397  (2,394)
Net income (loss) available to common stockholders $ 926 729 520 (350) 324  1,223  (3,536)
Basic earnings (loss) per share $ 0.27 0.22 0.15 (0.10) 0.10  0.36  (1.04)
Diluted earnings (loss) per share $ 0.27 0.22 0.15 (0.10) 0.10  0.36  (1.04)
Average shares outstanding   3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045
Average diluted shares outstanding   3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045
                 
PERFORMANCE RATIOS                
Return on average assets *   0.56% 0.43% 0.31% -0.21% 0.20% 0.18% -0.51%
Return on average common equity *   11.58% 9.31% 6.80% -4.65% 4.41% 4.03% -11.08%
Net interest margin (fully-tax equivalent) *   3.98% 4.14% 3.89% 3.76% 3.88% 3.92% 3.63%
Efficiency ratio   67.57% 68.28% 68.89% 83.24% 67.47% 71.79% 70.38%
# full-time equivalent employees - period end   184 174  167  168  163 174  155
                 
CAPITAL                
Equity to ending assets   7.18% 6.91% 6.90% 6.81% 6.76% 6.91% 6.54%
Common tangible equity to assets   4.89% 4.66% 4.64% 4.54% 4.52% 4.66% 4.36%
Tier 1 leverage capital ratio - Bank   8.35% 8.02% 8.15% 8.00% 7.91% 8.02% 7.59%
Tier 1 risk-based capital ratio - Bank   9.92% 9.60% 9.64% 9.63% 9.38% 9.60% 9.00%
Total risk-based capital ratio - Bank   12.83% 12.50% 12.53% 12.54% 12.24% 12.50% 11.82%
Book value per common share $  9.65  9.26  9.03  8.86  8.86 9.26 8.70
                 
ASSET QUALITY                
Net charge-offs (recoveries) $ 762 1,956  3,190  625  1,645  7,416  12,855
Net charge-offs to average loans *   0.64% 1.60% 2.58% 0.50% 1.29% 1.49% 2.43%
Allowance for loan losses $ 12,491 11,793 12,049 13,439 12,414 11,793 12,359
Allowance for loan losses to loans held invst.   2.60% 2.42% 2.46% 2.68% 2.47% 2.42% 2.40%
Nonperforming loans $  23,187  22,915 24,429 29,827 28,651  22,915 27,713
Performing restructured loans $ 15,728 18,502 18,167 17,138 11,910 18,502 4,791
Other real estate owned $ 7,708 6,728 8,972 11,513 11,177 6,728 9,848
Nonperforming loans to loans held for investment   4.82% 4.71% 4.99% 5.95% 5.71% 4.71% 5.39%
Nonperforming assets to total assets   4.62% 4.40% 5.06% 6.26% 6.00% 4.40% 5.55%
                 
END OF PERIOD BALANCES                
Total assets $ 668,009 673,325 661,784 660,272 664,130 673,325 676,701
Total loans held for investment $ 480,888 487,031 489,782 501,144 501,977 487,031 514,029
Total deposits $ 588,500 596,639 585,184 581,832 589,395 596,639 604,567
Stockholders' equity $ 47,943 46,558 45,696 44,991 44,903 46,558 44,282
                 
AVERAGE BALANCES                
Total assets $ 663,932 670,436 664,373 666,538 673,663 668,753 695,847
Total earning assets $ 616,101 623,176 617,852 619,704 626,822 621,889 650,926
Total loans held for investment  $ 479,121 489,915 494,669 500,095 510,051 498,683 529,415
Total interest-bearing deposits  $ 529,405 537,287 534,140 542,800 555,381 542,402 578,815
Common stockholders' equity $ 32,159 31,052 30,328 30,171 29,795 30,337 31,924
                 
* annualized for all periods presented                
 return on average assets and on average common equity are computed using net income (loss) available to common stockholders      
CONTACT: Carolina Bank Holdings, Inc.
         T. Allen Liles, EVP and CFO
         Telephone: 336-286-8746
         Email: a.liles@carolinabank.com
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