Profile: Carolina Bank Holdings, Inc. (CLBH.O)

Carolina Bank Holdings, Inc., incorporated on August 16, 2000, was formed for the purpose of serving as a bank holding company of Carolina Bank (the Bank). The Bank’s operations are commercially oriented and directed to individuals and small to medium-sized businesses located in its market area and its deposits and loans are derived primarily from customers in its geographic market. The Bank provides commercial and consumer banking services, including personal and commercial checking and savings accounts, money market accounts, certificates of deposit, individual retirement accounts and related business and individual banking services. The Bank’s lending activities are concentrated in commercial lending but also include commercial loans to small-to-medium sized businesses located for various purposes, and various consumer-type loans to individuals, including installment loans, credit card products, mortgage loans and equity lines of credit.

Lending Activities

During the year ended December 31, 2007, the Bank started a wholesale mortgage loan division to originate residential loans through third-party brokers and banks and to sell these loans at a profit to institutional investors. The loan portfolio of the Bank includes loans secured by real estate, commercial and industrial loans, consumer loans and other loans. At December 31, 2008, the total loans held for investment by the Bank was $501,424,000.

At December 31, 2008, the loans secured by real estate mortgages included 83.3% of the loan portfolio. Residential real estate loans consist mainly of first and second mortgages on single-family homes. Commercial loans primarily represent loans to businesses and may be made on either a secured or unsecured basis.

Investment Activities

At December 31, 2008, the investment portfolio of the Bank comprised approximately 9.9% of the total assets. The investment securities portfolio of the Bank includes the United States agency securities, mortgage-backed securities, municipal securities and corporate securities.

Sources of Fund

At December 31, 2008, the aggregate amount of certificates of deposit with a minimum denomination of $100,000 was $119,893,000, respectively. As of December 31, 2008, the total amount of these deposits outstanding was $6,234,000.