GREENSBORO, N.C., July 13, 2007 (PRIME NEWSWIRE) -- Carolina Bank Holdings, Inc (Nasdaq:CLBH) today reported second quarter 2007 net income of $837,000, an increase of 23.5% over the $678,000 reported for the second quarter of 2006. Diluted earnings per share were $0.25 compared with $0.20 for the prior-year second quarter, an increase of 25.0%. Per share results were restated to reflect the impact of the six-for-five stock split in the second quarter of 2007. These results continue to reflect strong loan and solid deposit growth year-over-year, stable to improving net interest margins, and improving credit quality.
For the first six months of 2007, net income was $1,538,000 compared with $1,281,000 for the comparable 2006 period, an increase of 20.1% percent. Diluted earnings per share increased 18.4% over the 2006 period, from $0.38 to $0.45.
Second quarter 2007 net income reflects the expensing of FDIC insurance premiums of approximately $111,000 representing estimated assessments for the first six months of 2007. Since inception in late 1996, Carolina Bank has only paid FICO assessments to the FDIC, and has not paid any FDIC assessments. Based on recent legislation, all U.S. FDIC insured banks will pay FDIC assessments in addition to FICO assessments for the foreseeable future, with the exception that banks formed before 1996 were provided credits based on FDIC assessments paid prior to 1996. Additionally, the carrying value of an investment in a trust company was written down by $100,000 to $205,000 by an impairment charge against second quarter 2007 earnings. Partially offsetting the aforementioned two negative variances was recognition of $178,000 interest income in the second quarter of 2007 from the collection of $1,372,000 in non-performing loans plus interest.
For the quarter ending June 30, 2007, net interest income increased $631,000, or, 20.5% over the same quarter last year. The increased net interest income resulted primarily from strong loan growth over the past year. Provision for loan losses fell $70,000 to $215,000 during the second quarter of 2007 reflecting improved credit quality from a year ago. Total non-interest expense increased $460,000 to $2,491,000 during the second quarter of 2007 compared to the prior-year second quarter; however, $211,000 of the additional expense resulted from the aforementioned increase in FDIC Insurance premiums and the impairment charge in an investment in a trust company.
Robert T. Braswell, President and CEO of Carolina Bank Holdings, Inc. commented, "We have challenged our team of bankers to respond to the competitive pressures that we face daily in our markets, and, with the effects of operating within the confines of a very narrow net interest margin. Needless to say, they continue to rise to the occasion and tackle those challenges head on. As our economy continues to improve in the markets in which we serve, our history of providing solid quality customer service coupled with a team of experienced bankers allows us to capture more than our share of the market."
Assets at June 30, 2007 totaled $442.0 million compared with the $390.0 million twelve months ago, an increase of $52.0 million, or 13.3%. For the same twelve-month period, net loans increased $68.5 million, or 24.7%, and closed at $345.6 million at June 30, 2007. "Our strength, as always, rested in our commercial lending and this trend continues with another excellent quarter of growth, which clearly validates our success in meeting and, in numerous cases, exceeding the expectations of our customers and prospects." Deposits increased $54.0 million year-over-year, or 16.2% to $ 387.1 million at June 30, 2007.
Asset quality continues to improve. Nonperforming assets were $2.1 million, or 0.48% of assets at June 30, 2007, compared with $3.6 million or 0.92% of assets at June 30, 2006, and, $2.4 million at March 31, 2007. Net loan charge-offs during the second quarter of 2007 were only $2,000 compared to $141,000 for the first quarter of 2007. The allowance for loan losses was 1.21% of total loans and leases at June 30, 2007.
About the Company
Carolina Bank, the banking subsidiary of Carolina Bank Holdings, Inc began banking operations in 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 High Point, and one in Burlington, North Carolina. The bank has announced plans to build a new corporate headquarters in downtown Greensboro, with expected occupancy in late 2008. 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: www.carolinabank.com.
Forward-Looking Statements
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 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 June 30, 2007 and 2006 and December 31, 2006
(unaudited)
June 30, December 31,
2007 2006 2006
--------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 4,306 $ 4,398 $ 4,762
Short-term investments and
interest-earning deposits 39 1,298 221
Federal funds sold 2,113 12,506 --
---------------------- ---------
Total cash and cash equivalents 6,458 18,202 4,983
Securities available for sale, at
fair value 66,429 72,360 71,054
Securities held-to-maturity, at
amortized cost 3,396 3,856 3,637
Loans 349,782 280,366 315,732
Allowance for loan losses (4,225) (3,354) (3,898)
---------------------- ---------
Net loans 345,557 277,012 311,834
Premises and equipment, net 10,645 8,399 10,078
Other assets 9,490 10,149 10,006
---------------------- ---------
Total assets $ 441,975 $ 389,978 $ 411,592
====================== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 31,191 $ 29,533 $ 26,984
Interest-bearing 355,917 303,615 333,431
---------------------- ---------
Total deposits 387,108 333,148 360,415
Short-term borrowings 3,093 2,703 3,605
Federal Home Loan Bank advances 11,595 18,265 8,908
Junior subordinated debentures 10,310 10,310 10,310
Other liabilities 2,761 1,757 2,425
---------------------- ---------
Total liabilities 414,867 366,183 385,663
STOCKHOLDERS' EQUITY
Common stock and paid-in-capital,
no par value, 20,000,000 shares
authorized; issued and
outstanding - 3,266,896 shares
at June 30, 2007, 2,721,384 shares
at June 30, 2006 and 2,722,388
shares at December 31, 2006 3,267 2,721 2,722
Additional paid-in capital 15,053 15,588 15,597
Retained earnings 9,389 6,321 7,851
Stock in director rabbi trust (464) (390) (453)
Directors deferred fees obligation 464 390 453
Accumulated other comprehensive
(loss) (601) (835) (241)
---------------------- ---------
Total stockholders' equity 27,108 23,795 25,929
---------------------- ---------
Total liabilities and
stockholders' equity $ 441,975 $ 389,978 $ 411,592
====================== =========
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three months and six months ended June 30, 2007 and 2006
(unaudited)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2007 2006 2007 2006
---------------------- ---------------------- ----------------------
(in thousands, except per share data)
Interest income:
Loans $ 7,323 $ 5,615 $ 14,034 $ 10,827
Securities - taxable 804 781 1,639 1,456
Securities - non-
taxable 19 -- 19 --
Interest from federal
funds sold 66 163 125 251
Other interest income 1 3 7 19
---------- ---------- ---------- ----------
Total interest income 8,213 6,562 15,824 12,553
Interest expense:
Deposits 4,166 1,482 8,081 5,755
FHLB advances and
other 151 1,570 362 507
Junior subordinated
debentures 191 436 379 353
---------- ---------- ---------- ----------
Total interest
expense 4,508 3,488 8,822 6,615
---------- ---------- ---------- ----------
Net interest income 3,705 3,074 7,002 5,938
Provision for loan
losses 215 285 470 655
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 3,490 2,789 6,532 5,283
Noninterest income:
Service charges 181 152 353 311
Mortgage banking
income 59 107 124 170
Other 100 93 221 297
---------- ---------- ---------- ----------
Total noninterest
income 340 352 698 778
Noninterest expense:
Salaries and benefits 1,264 1,070 2,563 2,142
Occupancy and
equipment 303 259 607 524
Professional fees 184 190 371 392
Outside data
processing 136 144 300 295
Advertising and
promotion 126 133 242 205
Stationery, printing
and supplies 110 95 226 181
Impairment of non-
marketable
securities 100 -- 100 --
Other 268 140 364 283
---------- ---------- ---------- ----------
Total noninterest
expense 2,491 2,031 4,773 4,022
---------- ---------- ---------- ----------
Income before income
taxes 1,339 1,110 2,457 2,039
Income taxes expense 502 432 919 758
---------- ---------- ---------- ----------
Net income $ 837 $ 678 $ 1,538 $ 1,281
========== ========== ========== ==========
Basic earnings per
common share $ 0.26 $ 0.21 $ 0.47 $ 0.39
Diluted earnings per
common share $ 0.25 $ 0.20 $ 0.45 $ 0.38
Average common shares
outstanding 3,266,866 3,264,701 3,266,866 3,264,648
Average common shares
and dilutive
potential common
shares outstanding 3,408,938 3,371,893 3,410,626 3,371,841
Total Shares
outstanding at end
of period 3,266,896 3,265,661 3,266,896 3,265,661
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
Second Quarter 2007
(unaudited)
($ in thousands except for share data)
Quarterly
---------------------------------------------------
2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr
2007 2007 2006 2006 2006
---------------------------------------------------
EARNINGS
Net interest
income $ 3,705 3,297 3,101 3,149 3,074
Provision for
loan loss $ 215 255 310 231 285
NonInterest
income $ 340 358 335 660 352
NonInterest
expense $ 2,491 2,282 2,393 1,966 2,031
Net income $ 837 701 555 974 678
Basic
earnings per
share $ 0.26 0.21 0.17 0.30 0.21
Diluted
earnings per
share $ 0.25 0.21 0.16 0.29 0.20
Average
shares
outstanding 3,266,866 3,266,866 3,266,866 3,266,066 3,264,701
Average
diluted
shares
outstanding 3,408,938 3,412,313 3,408,367 3,380,233 3,371,893
PERFORMANCE
RATIOS
Return on
average
assets * 0.76% 0.66% 0.56% 0.99% 0.71%
Return on
average
common
equity * 12.39% 10.65% 8.68% 15.95% 11.53%
Net interest
margin
(fully-tax
equivalent) * 3.53% 3.28% 3.20% 3.36% 3.40%
Efficiency
ratio 59.11% 62.44% 62.22% 56.03% 59.28%
# full-time
equivalent
employees -
period end 77 74 69 62 62
CAPITAL
Equity to
ending assets 6.13% 6.11% 6.30% 6.26% 6.10%
Tier 1
leverage
capital ratio N.A. N.A. 8.76% N.A. N.A.
Tier 1 risk-
based
capital
ratio N.A. N.A. 9.97% N.A. N.A.
Total risk-
based
capital ratio N.A. N.A. 11.45% 11.92% N.A.
Book value
per share $ 8.30 8.20 7.94 7.69 7.29
ASSET QUALITY
Net charge-
offs $ 2 141 18 (21) 513
Net charge-
offs to
average
loans * 0.00% 0.17% 0.02% -0.03% 0.74%
Allowance for
loan losses $ 4,225 4,012 3,898 3,606 3,354
Allowance for
loan losses
to total
loans 1.21% 1.21% 1.23% 1.25% 1.20%
Nonperforming
loans $ 2,139 2,385 2,388 2,626 3,140
Restructured
loans $ 0 45 45 227 0
Other real
estate owned $ 0 0 0 0 453
Nonperforming
loans to
total loans 0.61% 0.73% 0.77% 0.99% 1.12%
Nonperforming
assets to
total assets 0.48% 0.55% 0.59% 0.71% 0.92%
END OF PERIOD
BALANCES
Total assets $ 441,975 438,675 411,592 401,224 389,978
Total earning
assets $ 421,759 415,904 390,644 378,080 367,246
Total loans $ 349,782 332,112 315,732 288,557 280,366
Total deposits $ 387,108 391,936 360,415 348,939 333,148
Stockholders'
equity $ 27,108 26,788 25,929 25,134 23,795
AVERAGE BALANCES
Total assets $ 437,731 424,839 398,427 393,605 383,008
Total earning
assets $ 419,834 401,683 387,233 375,362 361,521
Total loans $ 345,115 326,161 306,272 288,433 277,142
Total
interest-
bearing
deposits $ 355,810 340,430 318,398 307,500 296,385
Stockholders'
equity $ 27,011 26,324 25,579 24,421 23,526
Year Ended
------------------------
2006 2005
---------- ----------
EARNINGS
Net interest income $ 12,189 10,228
Provision for loan loss $ 1,196 1,306
NonInterest income $ 1,773 1,230
NonInterest expense $ 8,381 6,946
Net income $ 2,811 2,037
Basic earnings per share $ 0.86 0.62
Diluted earnings per share $ 0.83 0.61
Average shares outstanding 3,265,557 3,260,239
Average diluted shares outstanding 3,383,070 3,355,064
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) * 3.30% 3.28%
Efficiency ratio 59.48% 60.42%
# full-time equivalent employees
- period end 69 59
CAPITAL
Equity to ending assets 6.30% 6.24%
Tier 1 leverage capital ratio 8.76% 8.98%
Tier 1 risk-based capital ratio 9.97% 10.36%
Total risk-based capital ratio 11.45% 12.17%
Book value per share $ 7.94 6.98
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 $ 390,644 347,356
Total loans $ 315,732 262,609
Total deposits $ 360,415 306,344
Stockholders' equity $ 25,929 22,787
AVERAGE BALANCES
Total assets $ 384,252 325,866
Total earning assets $ 369,298 312,244
Total loans $ 286,644 239,868
Total interest-bearing deposits $ 300,897 246,781
Stockholders' equity $ 24,165 21,918
* annualized for all periods presented
All per share information has been presented or restated to reflect
the effect of the six-for-five stock split in the second quarter
of 2007.