Carolina Bank Holdings, Inc. Reports EPS of $0.02 for the First Quarter of 2014

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| Source: Carolina Bank Holdings, Inc.

GREENSBORO, N.C., April 28, 2014 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported first quarter 2014 results with highlights as follows:

1st Quarter Financial Highlights

  • Average non-interest bearing demand deposits increased 13.8% in the first quarter of 2014 from the first quarter of 2013.
  • Loans held for investment increased $4.8 million during the first quarter to $448.9 million at March 31, 2014; however, average balances increased $22.4 million during the first quarter of 2014 from the fourth quarter of 2013.
  • The net interest margin, computed on a fully taxable basis, improved to 3.75% in the first quarter of 2014 from 3.46% in the fourth quarter of 2013.
  • Mortgage banking gross revenues decreased $2.6 million to $1.3 million for the first quarter of 2014 from the first quarter of 2013. The Mortgage Division incurred a net loss of $435,000 in the first quarter of 2014 compared to net income of $687,000 in the first quarter of 2013.
  • Excluding the loss from the Mortgage Division and an additional loan loss provision of $540,000 ($340,000 after-tax) for an impaired loan, net income available to common stockholders would have been approximately $849,000, or $0.25 diluted EPS.
  • Diluted net income per common share decreased to $0.02 in the first quarter of 2014 from $0.42 in the first quarter of 2013. Net income available to common stockholders was $74,000 and $1,414,000 for the first quarters of 2014 and 2013, respectively.
  • Noninterest expense decreased $1.0 million, or 14.2%, in the first quarter of 2014 from the first quarter of 2013.
  • Non-performing assets decreased $1.0 million during the first quarter to $18.1 million at March 31, 2014.
  • Our Winston-Salem office was relocated to Stratford Road, the most desirable shopping area, in December 2013 and was fully staffed during the first quarter of 2014. Construction recently began on our second Winston-Salem office on Peace Haven Road.
  • Carolina Bank, the subsidiary of Carolina Bank Holdings, Inc., continued to maintain 'Well Capitalized' status, the highest regulatory capital measure. Capital ratios at March 31, 2014 for Carolina Bank were 8.97% for Tier 1 leverage, 11.13% for Tier 1 risk-based, and 13.79% for total risk-based.

Robert T. Braswell, President and CEO, commented, "We continue to build value for our shareholders through our reduction in non-performing assets, by increasing our loans held for investment, and by growing non-interest bearing deposits. As a result of our progress, our net interest margin increased to 3.75% in the first quarter of 2014 from 3.46% in the fourth quarter of 2013. We are increasing our strong base in the Piedmont Triad through the recent relocation of our Winston-Salem office to Stratford Road and the construction of a new office on Peace Haven Road."

"We were disappointed in our first quarter 2014 results but believe several unusual factors negatively impacted results. The severe cold weather put a damper on our mortgage loan originations which resulted in a quarterly net loss from our Mortgage Division even though we significantly reduced our staffing in 2013. We have seen an upswing in mortgage applications recently which indicates future improvement. We have also expanded the footprint of our Wholesale Mortgage Division into several new states. In addition to the cold weather, we increased our loan loss provision by $540,000 for one loan relationship that I highlighted in my last report as not meeting our high current standards. We believe we are fully reserved in this loan relationship based on new appraisals and estimated cash flows," said Braswell.

Braswell further commented, "It is a pleasure to announce several recent additions and retirements to our Carolina Bank family. Abby Donnelly joined our Board of Directors in April to replace George Carr who is retiring and has served us admirably since 2000. Rich Spiker joined us in late 2013 and has transitioned well as our new Chief Lending Officer to replace Gunnar Fromen who has served us tirelessly since 1998. Andy McDowell joined us in the first quarter of 2014 as Market Executive for Winston-Salem to replace Gerald Church who is retiring but will continue to assist us in a customer marketing role. All of our new staff have significant business and banking experience and should contribute substantially to our future financial performance."

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. Residential mortgage loan production offices are located in Burlington, Chapel Hill, Hillsborough, and Sanford in addition to a wholesale residential mortgage operation in Greensboro. 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,
2014
December 31,
2013
  (unaudited)  
  (in thousands, except share data)
Assets    
Cash and due from banks  $ 11,465  $ 6,037
Interest-bearing deposits with banks  38,048  58,859
Bank term deposits  11,865  11,118
Securities available-for-sale, at fair value  65,191  62,016
Securities held-to-maturity  16,575  14,810
Loans held for sale  30,218  28,382
Loans   448,858  444,087
Less allowance for loan losses  (8,289)  (7,663)
Net loans   440,569  436,424
Premises and equipment, net  18,439  18,261
Other real estate owned  1,494  2,329
Bank-owned life insurance  11,216  11,129
Other assets  12,285  12,442
Total assets  $ 657,365  $ 661,807
     
Liabilities and Stockholders' Equity    
Deposits    
Non-interest bearing demand  $ 88,623  $ 84,911
NOW, money market and savings  340,983  342,970
Time  146,244  151,216
Total deposits  575,850  579,097
     
Advances from the Federal Home Loan Bank  2,860  2,885
Securities sold under agreements to repurchase  1,596  3,032
Subordinated debentures  19,610  19,610
Other liabilities and accrued expenses  7,493  7,579
Total liabilities  607,409  612,203
     
Stockholders' equity    
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding 10,994 shares in 2014 and 2013  10,994 10,994
Common stock, $1 par value; authorized 20,000,000 shares; issued and outstanding 3,429,640 in 2014 and 3,428,776 in 2013  3,430 3,429
Additional paid-in capital  16,233 16,226
Retained earnings   18,410 18,336
Stock in directors' rabbi trust  (1,420) (1,347)
Directors' deferred fees obligation  1,420 1,347
Accumulated other comprehensive income   889 619
Total stockholders' equity  49,956 49,604
Total liabilities and stockholders' equity  $ 657,365  $ 661,807
 
 
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
   
  Three Months
Ended March 31, 
  2014 2013
   (in thousands, except per share data)
Interest income    
Loans  $ 5,754  $ 6,719
Investment securities, taxable  420  248
Investment securities, non taxable  142  106
Interest from deposits in banks  60  18
Total interest income  6,376  7,091
     
Interest expense    
NOW, money market and savings  236  320
Time deposits  418  520
Other borrowed funds  164  188
Total interest expense  818  1,028
     
Net interest income  5,558  6,063
Provision for loan losses  770  400
Net interest income after provision for loan losses  4,788  5,663
Non-interest income    
Service charges  299  252
Mortgage banking income  1,333  3,895
Gain on sale of investment securities   49  22
Other  69  145
Total non-interest income  1,750  4,314
     
Non-interest expense    
Salaries and benefits  3,835  4,748
Occupancy and equipment  761  747
Foreclosed property expense  105  331
Professional fees  458  186
Outside data processing  251  259
FDIC insurance  134  169
Advertising and promotion  321  206
Stationery, printing and supplies  137  153
Other  333  583
Total non-interest expense 6,335 7,382
     
Income before income taxes  203  2,595
Income tax expense (benefit)  (62)  877
Net income   265  1,718
Dividends and accretion on preferred stock  191  304
Net income available to common shareholders   $ 74  $ 1,414
     
Net income per common share  $ 0.02  $ 0.42
Basic  $ 0.02  $ 0.42
Diluted    
     
     
Carolina Bank Holdings, Inc.    
Consolidated Financial Highlights    
First Quarter 2014    
(unaudited)    
  Quarterly  Years Ended
($ in thousands except for share data) 1st Qtr
2014
4th Qtr
2013
3rd Qtr
2013
2nd Qtr
2013
1st Qtr
2013

2013

2012
               
EARNINGS              
Net interest income  $ 5,558 5,360 5,302 5,590 6,063  22,315  24,187
Provision for loan losses  $ 770 2,350 600 100 400  3,450  2,360
NonInterest income  $ 1,750 2,909 2,905 4,206 4,314  14,334  19,650
NonInterest expense  $ 6,335 6,475 6,229 7,534 7,382  27,620  30,243
Net income (loss)  $ 265 (201) 1,023 1,470 1,718  4,010  7,502
Net income (loss) available to common stockholders  $ 74 (425) 776 1,164 1,414  2,928  6,276
Basic earnings (loss) per common share  $ 0.02 (0.12) 0.23 0.34 0.42  0.86  1.85
Diluted earnings (loss) per common share  $ 0.02 (0.12) 0.23 0.34 0.42  0.85  1.85
Average common shares outstanding 3,428,891 3,428,776 3,423,961 3,403,347 3,387,813 3,410,974 3,387,045
Average diluted common shares outstanding 3,433,381 3,437,015 3,435,335 3,423,373 3,411,335 3,426,764 3,395,383
               
PERFORMANCE RATIOS              
Return on average assets ** 0.05% -0.25% 0.46% 0.70% 0.85% 0.44% 0.93%
Return on average common equity ** 0.77% -4.29% 7.93% 12.04% 14.69% 7.52% 18.05%
Net interest margin (fully-tax equivalent) * 3.75% 3.46% 3.46% 3.65% 3.94% 3.59% 3.89%
Efficiency ratio 85.85% 77.70% 75.27% 76.50% 70.78% 74.88% 68.68%
# full-time equivalent employees - period end 194 191 203 215 215 191 208
               
CAPITAL              
Equity to period-end assets 7.60% 7.50% 7.54% 8.09% 8.21% 7.50% 7.79%
Common tangible equity to assets 5.93% 5.83% 5.91% 5.74% 5.89% 5.83% 5.53%
Tier 1 leverage capital ratio - Bank 8.97% 8.86% 8.81% 9.39% 9.34% 8.86% 9.23%
Tier 1 risk-based capital ratio - Bank 11.13% 11.19% 11.67% 12.68% 12.23% 11.19% 11.27%
Total risk-based capital ratio - Bank 13.79% 13.85% 14.76% 15.81% 15.28% 13.85% 14.18%
Book value per common share  $ 11.36  11.26  11.51  11.23  11.72  11.26  11.30
               
ASSET QUALITY              
Net charge-offs  $ 144 2,388 3,030 208 105  5,731  4,209
Net charge-offs to average loans * 0.13% 2.21% 2.85% 0.20% 0.09% 1.33% 0.90%
Allowance for loan losses  $ 8,289 7,663 7,701 10,131 10,239 7,663 9,944
Allowance for loan losses to loans held invst. 1.85% 1.73% 1.79% 2.42% 2.37% 1.73% 2.15%
Nonperforming loans  $ 16,610  16,731  19,606  16,501  10,806  16,731  13,067
Performing restructured loans  $ 10,145 10,381 10,933 14,151 14,391 10,381 13,822
Other real estate owned  $ 1,494 2,329 3,446 4,031 7,555 2,329 5,940
Nonperforming loans to loans held for investment 3.70% 3.77% 4.55% 3.95% 2.50% 3.77% 2.83%
Nonperforming assets to total assets 2.75% 2.88% 3.45% 3.07% 2.72% 2.88% 2.75%
               
END OF PERIOD BALANCES              
Total assets  $ 657,365 661,807 667,833 669,489 674,764 661,807 691,868
Total loans held for investment  $ 448,858 444,087 430,736 418,158 431,754 444,087 461,728
Total deposits  $ 575,850 579,097 584,494 581,404 585,954 579,097 590,925
Stockholders' equity  $ 49,956 49,604 50,383 54,192 55,389 49,604 53,862
               
AVERAGE BALANCES              
Total assets  $ 657,959 664,516 671,632 671,745 678,373 671,529 671,376
Total earning assets  $ 617,147 622,481 629,994 627,855 629,687 627,491 626,735
Total loans held for investment  $ 454,039 431,602 425,271 423,587 449,704 432,471 465,478
Total non interest-bearing demand deposits  $ 87,597 87,987 85,972 78,299 76,952 82,343 62,155
Common stockholders' equity  $ 38,947 39,339 38,803 38,764 39,044 38,927 34,761
               
* annualized for all periods presented
**return on average assets and on average common equity are computed using net income available to common stockholders
Carolina Bank Holdings, Inc.
T. Allen Liles, EVP and CFO
Telephone: 336-286-8746
Email: