GREENSBORO, N.C., Jan. 19, 2007 (PRIME NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported record 2006 earnings. Net income was $2.81 million, an increase of 37.9% over the $2.04 million reported in 2005. Diluted earnings per share were $1.00 in 2006 compared with $0.73 for 2005, an increase of 37.0%. Disregarding infrequent items discussed below, diluted earnings per share would have been $0.96 in 2006 compared with $0.74 in 2005, an increase of 30.9%. Per share results were restated to reflect the impact of the six-for-five stock split in 2005. Performance reflects strong growth in loans and deposits, a steady margin, and continued improvement in asset quality.
Net income was $555,000, or $0.20 per diluted share, for both the fourth quarters of 2006 and 2005. Fourth quarter 2006 net income would have been $650,000, or $0.23 per diluted share, without an unexpected one-time legal settlement, including attorney fees, of $255,000 ($157,000 after-tax) and without reduction of 2006 income taxes by $62,000 due to reduction of prior year tax reserves. Expenses for the fourth quarter of 2006 also rose due to new employees hired for our new High Point office which opened in 2007.
Robert T. Braswell, President and CEO of Carolina Bank Holdings, commented, "Our record results in 2006 prove that our relationship banking strategy is successful and continues to gain ground against our competition. I am pleased to announce that our High Point office opened on January 2, 2007 with a fine staff and our Burlington office experienced strong loan growth in the fourth quarter of 2006. We also introduced several new technology products during the fourth quarter of 2006 including internet bank statements and merchant check deposits using a scanner and internet connection."
Net interest income for 2006 increased $1.96 million from 2005, or 19.2% to $12.19 million, reflecting a 17.9% increase in average earning assets and a three basis point improvement in the net interest margin to 3.31%. Fourth quarter 2006 net interest income increased $265,000, or 9.3%, over the same period in 2005 as average earning assets rose 15.2% and the net interest margin decreased by 17 basis points to 3.24%. The fourth quarter 2006 net interest margin was 3.30% without $60,000 accelerated interest expense paid on our special 10th anniversary certificates of deposit; customers were paid 10% for the first month and 4.78% for the remaining nine months.
Non-interest income for 2006 was $1.77 million, an increase of $543,000 or 44.2%. Excluding a 2006 gain of $183,000 on the sale of repossessed assets and a dividend distribution of $117,000 relating to an investment in a limited partnership investment company, as well as a 2005 write-down on repossessed assets in the amount of $39,000, non-interest income was $1.47 million, up 16.1% from 2005. Non-interest income increased to $335,000 in the fourth quarter of 2006, up $8,000, or 2.5% from the fourth quarter of 2005.
Non-interest expense increased to $8.38 million for 2006, an increase of 20.7% from 2005, and increased 21.9% to $2.39 million in the fourth quarter of 2006 from the prior year quarter. Excluding the unexpected legal settlement, non-interest expense increased by 8.9% and 17.0% for the fourth quarter and year ended 2006 over prior year periods, respectively. The efficiency ratio, normalized to exclude this quarter's legal settlement of $255,000, last quarter's unusual gains totaling $300,000 and the 2005 $39,000 write-down, was 62.2% for the current quarter compared with 62.1% for the prior year fourth quarter, and 59.5% for all of 2006.
Asset growth remains strong. At December 31, 2006, Carolina Bank had total assets of $411.59 million, an increase of $46.42 million or 12.7% over the past year. Loans held for investment (HFI) increased $53.12 million, or 20.2%, over the prior year reaching $315.7 million and grew $27.18 million, or 9.4% during the 2006 fourth quarter.
The Company believes that its efforts to grow lower-cost deposits have been successful. Deposits increased $54.08 million, or 17.7%, over the past year, reaching $360.42 million at December 31, 2006. Since year-end 2005, transaction accounts (DDA, NOW, MMDA) and savings increased by $31.58 million, or 19.4%, and now account for $194.11 million or 53.9% of total deposits. This compares with $162.53 million or 53.1% of deposits at year-end 2005.
Mr. Braswell added, "We have made impressive progress over the past year returning our bank's asset quality to levels more in line with our historical experience. The management time we invested has led to process enhancements and stronger controls that should have a continuing, positive impact on our future credit performance." Non-performing assets total $2.43 million, or 0.59% of assets at December 31, 2006, compared with $5.42 million, or 1.48% of assets at December 31, 2005. The bank had net charge-offs of $18,000, or 0.02% annualized of average loans for the fourth quarter of 2006 and $508,000, or 0.18% of average loans for 2006. Net charge-offs were $904,000, or 0.38% of loans in 2005. The allowance for loan losses was 1.23% of total loans at December 31, 2006.
Shareholders' equity totaled $25.93 million at December 31, 2006, up $3.14 million from twelve months ago. Shares outstanding at December 31, 2006 were 2,722,388.
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 three counties: Guilford, Alamance and Randolph. The Bank has six full-service banking locations -- three in Greensboro, one in Asheboro, one in Burlington, and one in High Point, North Carolina. The Company's stock is listed on the Nasdaq Capital Market, under the symbol CLBH. Further information is available on the Company's web site: http://www.carolinabank.com.
The Carolina Bank Holdings, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2257
Forward-Looking Statements
This news release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies; trends in customer behavior as well as their ability to repay loans; changes in the national and local economy; and other factors, including risk factors, referred to from time to time in filings made by Carolina Bank Holdings 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
At December 31, 2006 and 2005
(unaudited)
December 31 December 31
2006 2005
---------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 4,762 $ 4,470
Short-term investments and interest-
earning deposits 221 12,770
Federal funds sold -- 3,519
Total cash and cash equivalents 4,983 20,759
Securities available for sale,
at fair value 71,054 64,461
Securities held-to-maturity,
at amortized cost 3,637 3,997
Loans 315,732 262,609
Allowance for loan losses (3,898) (3,210)
------------------------------
Net loans 311,834 259,399
Premises and equipment, net 10,078 7,728
Other assets 10,006 8,826
------------------------------
Total assets $ 411,592 $ 365,170
==============================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 26,984 $ 27,168
Interest-bearing 333,431 279,166
------------------------------
Total deposits 360,415 306,334
Short-term borrowings 3,605 2,844
Federal Home Loan Bank advances 8,908 21,300
Junior subordinated debentures 10,310 10,310
Other liabilities 2,425 1,595
------------------------------
Total liabilities 385,663 342,383
STOCKHOLDERS' EQUITY
Common stock and paid-in-capital,
no par value, 20,000,000 shares
authorized; issued and outstanding -
2,722,388 shares at December 31, 2006
and 2,720,496 shares at
December 31, 2005 2,722 2,720
Additional paid-in capital 15,597 15,580
Retained earnings 7,851 5,040
Stock in director rabbi trust (453) (333)
Directors deferred fees obligation 453 333
Accumulated other comprehensive
income (loss) (241) (553)
------------------------------
Total stockholders' equity 25,929 22,787
------------------------------
Total liabilities and
stockholders' equity $ 411,592 $ 365,170
==============================
Carolina Bank Holdings, Inc. and Subsidary
Consolidated Statements of Operations
For the three months and years ended December 31, 2006 and 2005
(unaudited)
For the For the
Three Months Ended Years Ended
December 31 December 31
------------------ ---------------
2006 2005 2006 2005
---------------------------------------------------------------------
(in thousands, except per share data)
Interest income: (unaudited) (unaudited)
Loans $ 6,324 $ 4,862 $ 23,175 $ 16,369
Securities -- taxable 906 609 3,236 2,127
Interest from federal
funds sold 38 93 414 381
Other interest income 3 12 33 34
--------------------- ---------------------
Total interest
income 7,271 5,576 26,858 18,911
Interest expense:
Deposits 3,803 2,340 12,991 2,910
FHLB advances and other 173 239 935 4,470
Junior subordinated
debentures 194 161 744 1,303
--------------------- ---------------------
Total interest
expense 4,170 2,740 14,670 8,683
--------------------- ---------------------
Net interest income 3,101 2,836 12,188 10,228
Provision for loan losses 310 331 1,196 1,306
--------------------- ---------------------
Net interest income after
provision for loan losses 2,791 2,505 10,992 8,922
Noninterest income:
Service charges 190 159 684 636
Mortgage banking income 81 45 352 258
Repossessed asset gains
(losses) -- -- 183 (39)
Other 64 123 554 375
--------------------- ---------------------
Total noninterest
income 335 327 1,773 1,230
Noninterest expense:
Salaries and benefits 1,080 935 4,268 3,515
Occupancy and equipment 289 254 1,099 935
Professional fees 265 279 827 880
Outside data processing 141 132 575 532
Advertising and promotion 140 131 472 348
Stationery, printing and
supplies 112 92 373 327
Other 366 140 767 409
--------------------- ---------------------
Total noninterest
expense 2,393 1,963 8,381 6,946
--------------------- ---------------------
Income before income taxes 733 869 4,384 3,206
Income taxes expense 178 314 1,574 1,169
--------------------- ---------------------
Net income $ 555 $ 555 $ 2,810 $ 2,037
===================== =====================
Basic earnings per common
share $ 0.20 $ 0.20 $ 1.03 $ 0.75
Diluted earnings per common
share $ 0.20 $ 0.20 $ 1.00 $ 0.73
Average common shares
outstanding 2,722,388 2,720,491 2,721,298 2,716,866
Average common shares and
dilutive potential common
shares outstanding 2,840,306 2,794,686 2,819,225 2,795,887
Total Shares outstanding
at end of period 2,722,388 2,720,496 2,722,388 2,720,496
All per share information has been presented or restated to reflect
the effect of the six-for-five stock split in 2005.
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Fourth Quarter 2006
(unaudited)
Quarterly
----------------------------------------------------
4th Qtr. 3rd Qtr. 2nd Qtr 1st Qtr 4th Qtr
($ in thousands 2006 2006 2006 2006 2005
except for ----------------------------------------------------
share data)
EARNINGS
Net interest
income $ 3,101 3,149 3,074 2,864 2,836
Provision
for loan
loss $ 310 231 285 370 331
NonInterest
income $ 335 660 352 426 327
NonInterest
expense $ 2,393 1,966 2,031 1,991 1,963
Net income $ 555 974 678 603 555
Basic
earnings
per share $ 0.20 0.36 0.25 0.22 0.20
Diluted
earnings
per
share $ 0.20 0.35 0.24 0.22 0.20
Average
shares
outstanding 2,722,388 2,721,722 2,720,584 2,720,496 2,720,491
Average
diluted
shares
outstanding 2,840,306 2,816,861 2,809,911 2,804,564 2,794,686
PERFORMANCE RATIOS
Return on
average
assets * 0.56% 0.99% 0.71% 0.66% 0.64%
Return on
average
common
equity * 8.68% 15.95% 11.53% 10.46% 9.85%
Net interest
margin
(fully-tax
equivalent)* 3.24% 3.36% 3.40% 3.26% 3.41%
Efficiency
ratio 62.22% 56.03% 59.28% 60.52% 62.06%
No. full-time
equivalent
employees -
period end 69 62 62 59 59
CAPITAL
Equity to
ending
assets 6.30% 6.26% 6.10% 6.14% 6.24%
Tier 1
leverage
capital
ratio NA NA NA 8.65% 8.98%
Tier 1
risk-based
capital
ratio NA NA NA 10.17% 10.36%
Total
risk-based
capital
ratio NA 11.92% NA 11.32% 12.17%
Book value
per share $ 9.52 9.23 8.74 8.57 8.38
ASSET QUALITY
Net charge-
offs $ 18 (21) 513 (2) 65
Net charge-
offs to
average
loans * 0.02% -0.03% 0.74% 0.00% 0.10%
Allowance for
loan losses $ 3,898 3,606 3,354 3,582 3,210
Allowance for
loan losses
to total
loans 1.23% 1.25% 1.20% 1.30% 1.22%
Nonperforming
loans $ 2,388 2,626 3,140 5,430 2,834
Restructured
loans $ 45 227 0 0 2,474
Other real
estate owned $ 0 0 453 111 111
Nonperforming
loans to
total loans 0.77% 0.99% 1.12% 1.97% 2.02%
Nonperforming
assets to
total assets 0.59% 0.71% 0.92% 1.46% 1.48%
END OF PERIOD
BALANCES
Total assets $ 411,592 401,224 389,978 379,692 365,170
Total earning
assets $ 390,644 378,080 367,246 357,423 344,522
Total loans $ 315,732 288,557 280,366 275,866 262,609
Total deposits $ 360,415 348,939 333,148 323,399 306,334
Stockholders'
equity $ 25,929 25,134 23,795 23,313 22,787
AVERAGE
BALANCES
Total assets $ 398,427 393,605 383,008 366,335 346,434
Total earning
assets $ 383,076 375,362 361,521 351,541 332,575
Total loans $ 302,115 288,433 277,142 274,728 256,904
Total
interest-
bearing
deposits $ 318,398 307,500 296,385 281,328 262,342
Stockholders'
equity $ 25,579 24,421 23,526 23,070 22,532
Year Ended
---------------------
($ in thousands 2006 2005
except for ---------------------
share data)
EARNINGS
Net interest income 12,188 10,228
Provision for loan loss 1,196 1,306
NonInterest income 1,773 1,230
NonInterest expense 8,381 6,946
Net income 2,810 2,037
Basic earnings per share 1.03 0.75
Diluted earnings per share 1.00 0.73
Average shares outstanding 2,721,298 2,716,866
Average diluted shares outstanding 2,819,225 2,795,887
PERFORMANCE RATIOS
Return on average assets * 0.73% 0.63%
Return on average common equity * 11.63% 9.29%
Net interest margin
(fully-tax equivalent)* 3.31% 3.28%
Efficiency ratio 59.48% 60.42%
No. full-time equivalent employees -
period end 69 59
CAPITAL
Equity to ending assets 6.30% 6.24%
Tier 1 leverage capital ratio NA 8.98%
Tier 1 risk-based capital ratio NA 10.36%
Total risk-based capital ratio NA 12.17%
Book value per share 9.23 8.38
ASSET QUALITY
Net charge-offs 508 904
Net charge-offs to average loans * 0.18% 0.38%
Allowance for loan losses 3,898 3,210
Allowance for loan losses to
total loans 1.23% 1.22%
Nonperforming loans 2,388 2,834
Restructured loans 45 2,474
Other real estate owned 0 111
Nonperforming loans to
total loans 0.77% 2.02%
Nonperforming assets to total
assets 0.59% 1.48%
END OF PERIOD BALANCES
Total assets 411,592 365,170
Total earning assets 390,644 309,913
Total loans 315,732 262,609
Total deposits 360,415 306,344
Stockholders' equity 25,929 22,787
AVERAGE BALANCES
Total assets 385,344 325,866
Total earning assets 367,875 312,244
Total loans 285,605 239,868
Total interest-bearing deposits 300,903 246,781
Stockholders' equity 24,165 21,918
* annualized for all periods presented