GREENSBORO, N.C., Oct. 24, 2008 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) announced non-performing assets of $3.4 million, or 0.57% of assets, at September 30, 2008, a significant drop from $4.6 million, or 0.99% of assets, at September 30, 2007. Non-performing assets were 0.37% of assets at June 30, 2008. Annualized net loan charge-offs to average loans held for investment was 0.07% for the first nine months of 2008 compared to 0.15% for all of 2007. Robert T. Braswell, President and CEO, commented, "We are pleased with our improvement in asset quality from a year ago. Our bankers continue to respond to a challenging economic environment with lower nonperforming assets and lower loan charge-offs than our peer banks."
The Company experienced strong growth, as assets, loans, and deposits increased 26.3 %, 28.1%, and 13.7%, respectively, at September 30, 2008 from a year ago and increased 4.3%, 4.5%, and 1.0%, respectively, for the third quarter of 2008. Braswell stated that "We continue to see growth opportunities in our markets coming from our strategic position in the Piedmont Triad, dislocation of other banking customers, and our continued customer service success. To better serve our customers, we raised $9.3 million in subordinated debt in the third quarter of 2008 to increase our regulatory capital. We were excited to have completed our new corporate headquarters, including a full service office, in downtown Greensboro during the third quarter of 2008."
Net income for the third quarter of 2008 was $704,000, or $0.21 per diluted share, compared to $800,000, or $0.24 per diluted share, for the third quarter of 2007. The provision for loan losses was $350,000 in the third quarter of 2008, an increase of $78,000 from the third quarter a year ago. This increase was a function of our continued growth and overall market concerns. Net interest income increased 6.4% to $3.9 million in the third quarter of 2008 from the third quarter of 2007 and was up 4.0% from the second quarter of 2008. The net interest margin (fully-taxable equivalent) decreased to 2.86% in the latest quarter from 2.91% in the second quarter of 2008 and 3.31% in the third quarter of 2007. Our net interest margin declined in 2008 because the prime rate decreased by 325 basis points over the past year, combined with our asset sensitivity, and due to a very competitive market for deposits.
Non-interest income increased to $1.0 million in the third quarter of 2008, up $0.6 million from the third quarter of 2007. Our new wholesale mortgage division was responsible for much of the increase, as mortgage banking income was up $567,000 from a year ago.
Non-interest expense increased to $3.4 million in the third quarter of 2008 from $2.5 million in the third quarter of 2007. Excluding $433,000 of new expenses from our wholesale mortgage division and $64,000 in additional expenses related to increased FDIC premiums, non-interest expense increased 19.4% in the third quarter of 2008 from the third quarter of 2007. The added expenses in 2008 supported our growth and included a new office in Burlington which opened in the third quarter of 2007, a new headquarters and banking office in downtown Greensboro which opened in the third quarter of 2008, and a loan production office in Winston-Salem which opened in the first quarter of 2008.
Net income for the nine months ended September 30, 2008 was $2.0 million, or $0.59 per diluted share, compared to $2.3 million, or $0.69 per diluted share, for the same period in 2007.
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, Randolph, and Forsyth. The bank has seven full-service banking locations, four in Greensboro, one in Asheboro, one in High Point, and one in Burlington, and a loan production office in Winston-Salem. The bank completed a new corporate headquarters in downtown Greensboro in the third quarter of 2008. 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 actual events or results to differ materially. These risks and uncertainties include risks of supporting and managing our growth, substantial changes in financial markets, changes in interest rates, changes in real estate values and the real estate market, loss of deposits and loan demand to other financial institutions, and regulatory changes. 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
At September 30, 2008 and 2007 and December 31, 2007
(unaudited)
September 30, December 31,
2008 2007 2007
---------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 10,602 $ 6,629 $ 4,967
Short-term investments and
interest-earning deposits 124 80 55
Federal funds sold 2,633 -- --
------------------------- ----------
Total cash and cash
equivalents 13,359 6,709 5,022
Securities available for
sale, at fair value 55,894 66,552 59,304
Securities held-to-maturity,
at amortized cost 1,156 3,264 3,133
Loans held for sale 15,023 2,007 11,869
Loans 477,298 372,595 400,784
Allowance for loan losses (5,454) (4,476) (4,532)
------------------------- ----------
Net loans 471,844 370,126 408,121
Premises and equipment, net 19,401 11,803 13,792
Other assets 14,687 9,873 10,744
------------------------- ----------
Total assets $ 591,364 $ 468,327 $ 500,116
========================= ==========
LIABILITIES AND
STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 27,190 $ 30,105 $ 30,491
Interest-bearing 437,779 378,989 388,082
------------------------- ----------
Total deposits 464,969 409,094 418,573
Short-term borrowings 15,275 8,471 6,102
Federal Home Loan Bank
advances 56,659 8,588 31,581
Subordinated debentures 19,246 10,310 10,310
Other liabilities 3,858 3,377 3,910
------------------------- ----------
Total liabilities 560,007 439,840 470,476
STOCKHOLDERS' EQUITY
Common stock and paid-in-
capital, no par value,
20,000,000 shares
authorized; issued and
outstanding - 3,348,193
shares at September 30,
2008, 3,281,250 shares at
September 30, 2007, and
3,315,157 shares at
December 31, 2007 3,348 3,281 3,315
Additional paid-in capital 15,556 15,152 15,379
Retained earnings 12,713 10,189 10,875
Stock in director rabbi trust (687) (492) (524)
Directors deferred fees
obligation 687 492 524
Accumulated other
comprehensive income (loss) (260) (135) 71
------------------------- ----------
Total stockholders'
equity 31,357 28,487 29,640
------------------------- ----------
Total liabilities and
stockholders' equity $ 591,364 $ 468,327 $ 500,116
========================= ==========
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three and nine months ended September 30, 2008 and 2007
(unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- --------------------
2008 2007 2008 2007
-------------------------- -------------------- --------------------
(in thousands, except per share data)
Interest income:
Loans $ 7,209 $ 7,526 $ 21,474 $ 21,560
Investment securities -
taxable 655 787 2,079 2,426
Investment securities -
non taxable 98 43 269 62
Interest from federal
funds sold 7 61 27 186
Other interest income 1 23 2 30
-------------------- --------------------
Total interest income 7,970 8,440 23,851 24,264
Interest expense:
Deposits 3,568 4,426 11,255 12,507
FHLB advances and other 415 191 1,044 553
Junior subordinated
debentures 127 196 416 575
-------------------- --------------------
Total interest expense 4,110 4,813 12,715 13,635
-------------------- --------------------
Net interest income 3,860 3,627 11,136 10,629
Provision for loan losses 350 272 1,205 742
-------------------- --------------------
Net interest income after
provision for loan losses 3,510 3,355 9,931 9,887
Noninterest income:
Service charges 248 191 654 544
Mortgage banking income 643 76 2,045 200
Securities gains
(losses), net -- (1) 227 (1)
Other 143 120 386 341
-------------------- --------------------
Total noninterest
income 1,034 386 3,312 1,084
Noninterest expense:
Salaries and benefits 1,948 1,401 5,629 3,964
Occupancy and equipment 451 351 1,250 958
Professional fees 262 140 945 511
Outside data processing 192 144 530 444
Advertising and
promotion 126 113 424 355
Stationery, printing and
supplies 107 114 374 340
Impairment charge -- -- -- 100
Other 348 196 975 560
-------------------- --------------------
Total noninterest
expense 3,434 2,459 10,127 7,232
-------------------- -------------------
Income before income taxes 1,110 1,282 3,116 3,739
Income taxes expense 406 482 1,102 1,401
-------------------- --------------------
Net income $ 704 $ 800 $ 2,014 $ 2,338
==================== ====================
Basic earnings per common
share $ 0.21 $ 0.24 $ 0.60 $ 0.72
Diluted earnings per
common share $ 0.21 $ 0.24 $ 0.59 $ 0.69
Average common shares
outstanding 3,343,818 3,273,806 3,342,615 3,269,179
Average common shares and
dilutive potential common
shares outstanding 3,367,778 3,392,116 3,393,427 3,404,456
Total Shares outstanding
at end of period 3,348,193 3,281,250 3,348,193 3,281,250
All per share information has been presented or restated to reflect
the effect of the six-for-five stock split in 2007.
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Third Quarter 2008
(unaudited)
Quarterly
($ in thousands -------------------------------------------------
except for share 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr.
data) 2008 2008 2008 2007 2007
-------------------------------------------------
EARNINGS
Net interest
income $ 3,860 3,711 3,565 3,542 3,627
Provision for loan
loss $ 350 620 235 420 272
NonInterest
income $ 1,034 1,421 857 645 386
NonInterest
expense $ 3,434 3,600 3,093 2,695 2,459
Net income $ 704 608 702 686 800
Basic earnings
per share $ 0.21 0.18 0.21 0.21 0.24
Diluted earnings
per share $ 0.21 0.18 0.21 0.20 0.24
Average shares
outstanding 3,343,818 3,342,966 3,341,061 3,313,724 3,273,806
Average diluted
shares
outstanding 3,367,778 3,397,474 3,415,029 3,394,797 3,392,116
PERFORMANCE RATIOS
Return on average
assets * 0.49% 0.45% 0.55% 0.57% 0.70%
Return on average
common equity * 8.99% 7.90% 9.29% 9.45% 11.55%
Net interest
margin (fully-tax
equivalent) * 2.86% 2.91% 2.94% 3.08% 3.31%
Efficiency ratio 69.54% 69.63% 69.40% 63.89% 61.00%
# full-time
equivalent
employees -
period end 114 101 96 89 86
CAPITAL
Equity to ending
assets 5.30% 5.42% 5.82% 5.93% 6.08%
Tier 1 leverage
capital ratio n/a n/a 7.84% 8.14% n/a
Tier 1 risk-based
capital ratio n/a n/a 8.72% 8.94% n/a
Total risk-based
capital ratio n/a n/a 9.74% 10.00% n/a
Book value per
share $ 9.28 9.19 9.13 8.94 8.68
ASSET QUALITY
Net charge-offs
(recoveries) $ (2) 218 67 364 21
Net charge-offs to
average loans * 0.00% 0.20% 0.06% 0.36% 0.02%
Allowance for loan
losses $ 5,454 5,102 4,700 4,532 4,476
Allowance for loan
losses to loans
held invst. 1.14% 1.12% 1.13% 1.13% 1.19%
Nonperforming
loans $ 2,912 1,601 3,715 3,538 4,443
Restructured
loans $ 0 0 0 0 0
Other real estate
owned $ 441 511 592 1,001 190
Nonperforming
loans to loans
held for
investment 0.61% 0.35% 0.89% 0.88% 1.19%
Nonperforming
assets to total
assets 0.57% 0.37% 0.82% 0.91% 0.99%
END OF PERIOD
BALANCES
Total assets $ 591,364 567,119 524,203 500,116 468,327
Total earning
assets $ 552,128 532,869 494,359 474,145 444,498
Total loans held
for investment $ 477,298 456,841 416,121 400,784 374,602
Total deposits $ 464,969 460,340 437,699 418,573 409,094
Stockholders'
equity $ 31,357 30,723 30,533 29,640 28,487
AVERAGE BALANCES
Total assets $ 571,941 544,808 513,580 484,039 458,152
Total earning
assets $ 541,231 516,152 490,678 464,675 440,045
Total loans held
for investment $ 470,730 436,610 412,521 399,223 363,801
Total interest-
bearing deposits $ 427,669 411,423 401,975 379,562 371,395
Stockholders'
equity $ 31,058 30,869 30,319 29,048 27,706
Year Ended
-----------------------
($ in thousands except for share data) 2007 2006
---------- ----------
EARNINGS
Net interest income $ 14,171 12,189
Provision for loan loss $ 1,162 1,196
NonInterest income $ 1,729 1,773
NonInterest expense $ 9,927 8,381
Net income $ 3,024 2,811
Basic earnings per share $ 0.92 0.86
Diluted earnings per share $ 0.89 0.83
Average shares outstanding 3,280,315 3,265,557
Average diluted shares outstanding 3,402,711 3,383,070
PERFORMANCE RATIOS
Return on average assets * 0.67% 0.73%
Return on average common equity * 10.98% 11.63%
Net interest margin (fully-tax equivalent) * 3.30% 3.30%
Efficiency ratio 62.20% 60.03%
# full-time equivalent employees --
period end 89 69
CAPITAL
Equity to ending assets 5.93% 6.30%
Tier 1 leverage capital ratio 8.14% 8.76%
Tier 1 risk-based capital ratio 8.94% 9.97%
Total risk-based capital ratio 10.00% 11.45%
Book value per share $ 8.94 7.94
ASSET QUALITY
Net charge-offs (recoveries) $ 528 508
Net charge-offs to average loans * 0.15% 0.18%
Allowance for loan losses $ 4,532 3,898
Allowance for loan losses to loans held
invst. 1.13% 1.23%
Nonperforming loans $ 3,538 2,388
Restructured loans $ 0 45
Other real estate owned $ 1,001 0
Nonperforming loans to loans held for
investment 0.88% 0.77%
Nonperforming assets to total assets 0.91% 0.59%
END OF PERIOD BALANCES
Total assets $ 500,116 411,592
Total earning assets $ 474,145 390,644
Total loans held for investment $ 400,784 315,732
Total deposits $ 418,573 360,415
Stockholders' equity $ 29,640 25,929
AVERAGE BALANCES
Total assets $ 451,130 384,252
Total earning assets $ 431,926 369,298
Total loans held for investment $ 358,575 286,644
Total interest-bearing deposits $ 361,800 300,897
Stockholders' equity $ 27,541 24,165
* annualized for all periods presented