Carolina Bank Holdings, Inc. Reports Second Quarter Results


GREENSBORO, N.C., Aug. 2, 2011 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported second quarter 2011 results with highlights as follows:

Second Quarter 2011 Financial Highlights

  • Net interest income, computed on a fully taxable basis, was $5.8 million in the second quarter of 2011, up 1.2% from the second quarter of 2010.
  • The net interest margin, computed on a fully taxable basis, increased to 3.76% in the second quarter of 2011 compared to 3.50% in the second quarter of 2010.
  • Carolina Bank, the subsidiary of Carolina Bank Holdings, Inc., continued to maintain 'Well Capitalized' status, the highest regulatory capital measure. Capital ratios at June 30, 2011 for Carolina Bank improved to 8.00% for Tier 1 leverage, 9.63% for Tier 1 risk-based, and 12.54% for total risk-based.
  • The provision for loan losses decreased to $1.65 million in the second quarter of 2011 from $4.7 million in the same quarter of 2010.
  • Net loss for the second quarter of 2011 of $58,000 improved from the net loss of $1,568,000 in the second quarter 2010. Net loss allocable to common shareholders was $350,000 and $1,856,000 in the second quarter of 2011 and 2010, respectively. Net income available to common shareholders in the second quarter of 2011 would have exceeded $500,000, excluding $1.4 million of impairment charges related to real estate owned sales after June 30, 2011.
  • Diluted net (loss) per common share was ($0.10) and ($0.55) in the second quarter of 2011 and 2010, respectively.

Robert T. Braswell, President and CEO of Carolina Bank Holdings, Inc., commented, "We are pleased to report substantial progress in the financial improvement of our core bank. Our net interest margin improved in 2011 to the highest level in ten years, our capital ratios are at a three year high, and our provision for loan losses declined 64.9% in the second quarter of 2011 from a year ago. Our mortgage banking division improved its profitability from the first quarter of 2011 and has seen a recent increase in originations."

Non-performing loans to total loans held for investment increased to 5.95% at June 30, 2011 from 5.39% at December 31, 2010. Non-performing assets to total assets increased to 6.26% at June 30, 2011 from 5.55% at December 31, 2010; however, non-performing assets of over $5.0 million were sold during July. Braswell commented, "Reducing the elevated level of non-performing assets is a top priority of our Bank in 2011." The bank had net loan charge-offs of $0.63 million and $5.13 million in the second quarter of 2011 and 2010, respectively. The allowance for loan losses to loans held for investment increased from 2.40% at December 31, 2010 to 2.68% at June 30, 2011.

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, North Carolina. A mortgage loan production office was opened in Burlington in July 2010. 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     
  June 30,
2011
December 31,
2010*
  (unaudited)  
  (in thousands)
Assets    
Cash and due from banks  $ 5,053  $ 5,116
Interest-bearing deposits with banks  25,781  17,710
Securities available-for-sale, at fair value 46,256 42,785
Securities held-to-maturity 479 563
Loans held for sale 39,507 53,961
Loans  501,144 514,029
Less allowance for loan losses (13,439) (12,359)
Net loans  487,705 501,670
Premises and equipment, net 18,336 18,622
Other real estate owned 11,513 9,848
Bank-owned life insurance 10,193 10,003
Other assets 15,449 16,423
Total assets  $ 660,272  $ 676,701
     
Liabilities and Stockholders' Equity    
Deposits    
Non-interest bearing demand  $ 44,622  $ 43,564
NOW, money market and savings 312,771 303,203
Time 224,439 257,800
Total deposits 581,832 604,567
     
Advances from the Federal Home Loan Bank 3,121 3,165
Securities sold under agreements to repurchase 5,705 432
Subordinated debentures 19,451 19,414
Other liabilities and accrued expenses 5,172 4,841
Total liabilities 615,281 632,419
     
Commitments     
Stockholders' equity    
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding 16,000 shares in 2011 and 2010 14,991 14,811
Common stock, $1 par value; authorized 20,000,000 shares; issued and outstanding 3,387,045 in 2011 and 2010 3,387 3,387
Common stock warrants 1,841 1,841
Additional paid-in capital 15,852 15,834
Retained earnings  7,884 7,910
Stock in directors' rabbi trust (786) (718)
Directors' deferred fees obligation 786 718
Accumulated other comprehensive income  1,036 499
Total stockholders' equity 44,991 44,282
Total liabilities and stockholders' equity  $ 660,272  $ 676,701
     
* Derived from audited consolidated financial statements.    
         
Carolina Bank Holdings, Inc. and Subsidiary        
Consolidated Statements of Operations (unaudited)        
     
  Three Months
Ended June 30, 
Six Months
Ended June 30, 
  2011 2010 2011 2010
  (in thousands, except per share data)
Interest income        
Loans  $ 6,899  $ 7,543  $ 14,049  $ 15,019
Investment securities, taxable  360  420  761  882
Investment securities, non taxable  147  164  309  326
Interest from deposits in banks  28  22  48  44
Total interest income  7,434  8,149  15,167  16,271
         
Interest expense        
NOW, money market, savings  638  926  1,298  1,916
Time deposits  865  1,328  1,832  2,711
Other borrowed funds  187  225  375  454
Total interest expense  1,690  2,479  3,505  5,081
         
Net interest income  5,744  5,670  11,662  11,190
Provision for loan losses  1,650  4,700  3,350  6,688
Net interest income after provision for loan losses  4,094  970  8,312  4,502
Non-interest income        
Service charges  256  235  487  451
Mortgage banking income  2,069  2,187  3,704  3,936
Gains on sale of investment securities  114  55  211  185
Repossessed asset gains (losses)  53  (140)  53  (267)
Other  128  165  275  330
Total non-interest income  2,620  2,502  4,730  4,635
         
Non-interest expense        
Salaries and benefits  3,193  2,810  6,157  5,384
Occupancy and equipment  558  598  1,196  1,206
Professional fees  229  342  482  602
Outside data processing  181  216  400  457
FDIC insurance  334  262  719  519
Advertising and promotion  143  91  230  250
Stationery, printing and supplies  134  132  273  246
Impairment of repossessed assets  1,423  962  1,423  1,469
Repossessed asset expenses  315  259  609  422
Other  512  500  1,003  895
Total non-interest expense  7,022  6,172  12,492  11,450
         
Income (loss) before income taxes  (308)  (2,700)  550  (2,313)
Income tax benefit  (250)  (1,132)  (4)  (1,044)
Net income (loss)  (58)  (1,568)  554  (1,269)
Dividends and accretion on preferred stock  292  288  580  573
Net (loss) allocable to common stockholders  $ (350)  $ (1,856)  $ (26)  $ (1,842)
         
Net (loss) per common share        
Basic  $ (0.10)  $ (0.55)  $ (0.01)  $ (0.54)
Diluted  $ (0.10)  $ (0.55)  $ (0.01)  $ (0.54)
     
Carolina Bank Holdings, Inc.    
Consolidated Financial Highlights     
Second Quarter 2011    
(unaudited)    
  Quarterly  Years Ended
($ in thousands except for share data) 2nd Qtr.
2011
1st Qtr.
2011
4th Qtr.
2010
3rd Qtr.
2010
2nd Qtr.
2010
2010 2009
               
EARNINGS              
Net interest income  $ 5,744 5,918 6,170 5,981 5,670  23,341  19,705
Provision for loan loss $ 1,650 1,700 1,825 6,620 4,700  15,133  10,520
NonInterest income $ 2,620 2,110 4,710 4,030 2,502  13,375  10,550
NonInterest expense $ 7,022 5,470 8,190 6,421 6,172  26,061  20,577
Net income (loss)  $ (58) 612 679 (1,804) (1,568)  (2,394)  (358)
Net income (loss) available to common stockholders $ (350) 324 392 (2,086) (1,856)  (3,536)  (1,448)
Basic earnings (loss) per share $ (0.10) 0.10 0.12 (0.62) (0.55)  (1.04)  (0.43)
Diluted earnings (loss) per share $ (0.10) 0.10 0.12 (0.62) (0.55)  (1.04)  (0.43)
Average shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045  3,383,748
Average diluted shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045  3,385,102
               
PERFORMANCE RATIOS              
Return on average assets * -0.21% 0.20% 0.22% -1.19% -1.06% -0.51% -0.22%
Return on average common equity * -4.65% 4.41% 5.24% -26.45% -22.54% -11.08% -4.21%
Net interest margin (fully-tax equivalent) * 3.76% 3.88% 3.80% 3.70% 3.50% 3.63% 3.20%
Efficiency ratio 83.24% 67.47% 74.73% 63.64% 74.80% 70.38% 67.42%
# full-time equivalent employees - period end  168  163  155  153  147  155  140
               
CAPITAL              
Equity to ending assets 6.81% 6.76% 6.54% 6.36% 6.58% 6.54% 6.88%
Common tangible equity to assets 4.54% 4.52% 4.36% 4.25% 4.50% 4.36% 4.80%
Tier 1 leverage capital ratio - Bank 8.00% 7.91% 7.59% 7.43% 7.23% 7.59% 7.45%
Tier 1 risk-based capital ratio - Bank 9.63% 9.38% 9.00% 8.73% 8.55% 9.00% 8.50%
Total risk-based capital ratio - Bank 12.54% 12.24% 11.82% 11.52% 11.34% 11.82% 11.24%
Book value per common share $ 8.86  8.86  8.70 8.79 9.37 8.70 9.88
               
ASSET QUALITY              
Net charge-offs (recoveries) $ 625  1,645  1,096  5,261  5,126  12,855  6,199
Net charge-offs to average loans * 0.50% 1.29% 0.84% 4.02% 3.80% 2.43% 1.19%
Allowance for loan losses $ 13,439 12,414 12,359 11,629 10,270 12,359 10,081
Allowance for loan losses to loans held invst. 2.68% 2.47% 2.40% 2.24% 1.93% 2.40% 1.90%
Nonperforming loans $ 29,827 28,651 27,713 26,972 24,721 27,713 14,163
Performing restructured loans $ 17,138 11,910 8,396 700  --  8,396  --
Repossessed assets $ 11,513 11,177 9,863 9,763 7,792 9,863 13,964
Nonperforming loans to loans held for investment 5.95% 5.71% 5.39% 5.20% 4.63% 5.39% 2.67%
Nonperforming assets to total assets 6.26% 6.00% 5.55% 5.25% 4.62% 5.55% 4.04%
               
END OF PERIOD BALANCES              
Total assets $ 660,272 664,130 676,701 700,234 704,340 676,701 697,052
Total loans held for investment $ 501,144 501,977 514,029 519,177 533,486 514,029 530,606
Total deposits $ 581,832 589,395 604,567 626,060 626,527 604,567 617,471
Stockholders' equity $ 44,991 44,903 44,282 44,507 46,359 44,282 47,948
               
AVERAGE BALANCES              
Total assets $ 666,538 673,663 693,279 698,106 700,598 695,847 665,555
Total earning assets $ 619,704 626,822 653,276 650,068 658,491 650,926 624,031
Total loans held for investment  $ 500,095 510,051 521,462 523,714 539,554 529,415 522,965
Total interest-bearing deposits  $ 542,800 555,381 574,181 580,084 584,031 578,815 528,158
Common stockholders' equity $ 30,171 29,795 29,702 31,295 33,034 31,924 34,385
               
* annualized for all periods presented              
return on average assets and on average common equity are computed using net income (loss) available to common stockholders    


            

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