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Carolina Bank Holdings, Inc. Reports EPS of $0.15 for the Second Quarter of 2014

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

2nd Quarter Financial Highlights

  • Net income of $750,000 in the second quarter of 2014 improved on a sequential basis from $265,000 in the first quarter and from a net loss of $201,000 in the fourth quarter of 2013.
  • Loans held for investment increased 11.1% from $418.2 million at June 30, 2013 to $464.7 million at June 30, 2014. Loans held for investment have grown sequentially for the past four quarters.
  • The net interest margin, computed on a fully taxable basis, improved to 3.74% in the second quarter of 2014 from 3.65% in the second quarter of 2013.
  • Average non-interest bearing demand deposits increased 15.2% in the second quarter of 2014 from the second quarter of 2013.
  • Mortgage banking gross revenues decreased $1.6 million to $2.0 million for the second quarter of 2014 from the second quarter of 2013. The Mortgage Division incurred a net loss of $183,000 in the second quarter of 2014 compared to net income of $373,000 in the second quarter of 2013. The second quarter loss for the mortgage division improved from a first quarter 2014 net loss of $435,000.
  • Diluted net income per common share decreased to $0.15 in the second quarter of 2014 from $0.34 in the second quarter of 2013. Net income available to common stockholders was $503,000 and $1,164,000 for the second quarters of 2014 and 2013, respectively.
  • Excluding the loss from the Mortgage Division, net income available to common stockholders in the second quarter of 2014 would have been approximately $686,000, or $0.20 net income per diluted common share.
  • Noninterest expense decreased $0.8 million, or 10.9%, in the second quarter of 2014 from the second quarter of 2013.
  • Non-performing assets decreased $1.2 million and $2.2 million during the second quarter and first six months of 2014, respectively, to $16.9 million at June 30, 2014.

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 3.74% in the second quarter of 2014 from 3.65% in the second quarter of 2013. Our net income, asset quality, loan growth, net interest margin, and non-interest bearing demand deposits all improved sequentially in the second quarter of 2014."

"We have seen a recent upswing in mortgage loan applications which indicates future improvement in the performance of our mortgage division. While the mortgage division's net loss of $183,000 in the second quarter of 2014 was less than the net loss of $435,000 in the first quarter, we continue our focus on improving results through expanded markets and improved efficiencies," said Braswell.

Braswell further commented, "I am pleased to announce that David Caster has joined Carolina Bank as Vice President, Small Business Administration (SBA) Program Manager. Dave brings 29 years of banking experience and will coordinate SBA lending and related sales. We expect SBA lending and related sales to be accretive to our net income in late 2014 and in 2015."

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
June 30, December 31,
2014 2013
(unaudited)
(in thousands, except share data)
Assets
Cash and due from banks $ 15,143 $ 6,037
Interest-bearing deposits with banks 11,076 58,859
Bank term deposits 11,865 11,118
Securities available-for-sale, at fair value 60,348 62,016
Securities held-to-maturity (fair values of $16,476 in 2014 and $14,462 in 2013) 16,269 14,810
Loans held for sale 49,301 28,382
Loans 464,706 444,087
Less allowance for loan losses (7,203) (7,663)
Net loans 457,503 436,424
Premises and equipment, net 18,355 18,261
Other real estate owned 4,431 2,329
Bank-owned life insurance 11,304 11,129
Other assets 13,567 12,442
Total assets $ 669,162 $ 661,807
Liabilities and Stockholders' Equity
Deposits
Non-interest bearing demand $ 91,894 $ 84,911
NOW, money market and savings 343,570 342,970
Time 141,849 151,216
Total deposits 577,313 579,097
Advances from the Federal Home Loan Bank 12,835 2,885
Securities sold under agreements to repurchase 494 3,032
Subordinated debentures 19,610 19,610
Other liabilities and accrued expenses 8,231 7,579
Total liabilities 618,483 612,203
Stockholders' equity
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding 10,994 shares 10,994 10,994
Common stock, $1 par value; authorized 20,000,000 shares; issued and outstanding 3,431,440 in 2014 and 3,428,776 in 2013 3,432 3,429
Additional paid-in capital 16,247 16,226
Retained earnings 18,913 18,336
Stock in directors' rabbi trust (1,495) (1,347)
Directors' deferred fees obligation 1,495 1,347
Accumulated other comprehensive income 1,093 619
Total stockholders' equity 50,679 49,604
Total liabilities and stockholders' equity $ 669,162 $ 661,807
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2014 2013 2014 2013
(in thousands, except per share data)
Interest income
Loans $ 5,858 $ 6,122 $ 11,612 $ 12,841
Investment securities, taxable 411 260 831 508
Investment securities, non taxable 136 107 278 213
Interest from deposits in banks 49 67 109 85
Total interest income 6,454 6,556 12,830 13,647
Interest expense
NOW, money market and savings 240 276 476 596
Time deposits 407 503 825 1,023
Other borrowed funds 164 187 328 375
Total interest expense 811 966 1,629 1,994
Net interest income 5,643 5,590 11,201 11,653
Provision for loan losses 346 100 1,116 500
Net interest income after provision for loan losses 5,297 5,490 10,085 11,153
Non-interest income
Service charges 321 295 620 547
Mortgage banking income 1,954 3,586 3,287 7,481
Gain on sale of investment securities 94 170 143 192
Other (29) 155 40 300
Total non-interest income 2,340 4,206 4,090 8,520
Non-interest expense
Salaries and benefits 4,016 4,610 7,851 9,358
Occupancy and equipment 793 747 1,554 1,494
Foreclosed property expense 58 547 163 878
Professional fees 546 355 1,004 541
Outside data processing 275 195 526 454
FDIC insurance 133 79 267 248
Advertising and promotion 173 285 494 491
Stationery, printing and supplies 141 181 278 334
Other 577 535 910 1,118
Total non-interest expense 6,712 7,534 13,047 14,916
Income before income taxes 925 2,162 1,128 4,757
Income tax expense 175 692 113 1,569
Net income 750 1,470 1,015 3,188
Dividends and accretion on preferred stock 247 306 438 611
Net income available to common shareholders $ 503 $ 1,164 $ 577 $ 2,577
Net income per common share
Basic $ 0.15 $ 0.34 $ 0.17 $ 0.76
Diluted $ 0.15 $ 0.34 $ 0.17 $ 0.75
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Second Quarter 2014
(unaudited)
Quarterly Years Ended
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
($ in thousands except for share data) 2014 2014 2013 2013 2013 2013 2012
EARNINGS
Net interest income $ 5,643 5,558 5,360 5,302 5,590 22,315 24,187
Provision for loan losses $ 346 770 2,350 600 100 3,450 2,360
NonInterest income $ 2,340 1,750 2,909 2,905 4,206 14,334 19,650
NonInterest expense $ 6,712 6,335 6,475 6,229 7,534 27,620 30,243
Net income (loss) $ 750 265 (201) 1,023 1,470 4,010 7,502
Net income (loss) available to common stockholders $ 503 74 (425) 776 1,164 2,928 6,276
Basic earnings (loss) per common share $ 0.15 0.02 (0.12) 0.23 0.34 0.86 1.85
Diluted earnings (loss) per common share $ 0.15 0.02 (0.12) 0.23 0.34 0.85 1.85
Average common shares outstanding 3,430,036 3,428,891 3,428,776 3,423,961 3,403,347 3,410,974 3,387,045
Average diluted common shares outstanding 3,434,101 3,433,381 3,437,015 3,435,335 3,423,373 3,426,764 3,395,383
PERFORMANCE RATIOS
Return on average assets ** 0.31% 0.05% -0.25% 0.46% 0.70% 0.44% 0.93%
Return on average common equity ** 5.12% 0.77% -4.29% 7.93% 12.04% 7.52% 18.05%
Net interest margin (fully-tax equivalent) * 3.74% 3.75% 3.46% 3.46% 3.65% 3.59% 3.89%
Efficiency ratio 83.19% 85.85% 77.70% 75.27% 76.50% 74.88% 68.68%
# full-time equivalent employees - period end 195 194 191 203 215 191 208
CAPITAL
Equity to period-end assets 7.57% 7.60% 7.50% 7.54% 8.09% 7.50% 7.79%
Common tangible equity to assets 5.93% 5.93% 5.83% 5.91% 5.74% 5.83% 5.53%
Tier 1 leverage capital ratio - Bank 9.07% 8.97% 8.86% 8.81% 9.39% 8.86% 9.23%
Tier 1 risk-based capital ratio - Bank 10.81% 11.13% 11.19% 11.67% 12.68% 11.19% 11.27%
Total risk-based capital ratio - Bank 13.41% 13.79% 13.85% 14.76% 15.81% 13.85% 14.18%
Book value per common share $ 11.57 11.36 11.26 11.51 11.23 11.26 11.30
ASSET QUALITY
Net charge-offs $ 1,432 144 2,388 3,030 208 5,731 4,209
Net charge-offs to average loans * 1.26% 0.13% 2.21% 2.85% 0.20% 1.33% 0.90%
Allowance for loan losses $ 7,203 8,289 7,663 7,701 10,131 7,663 9,944
Allowance for loan losses to loans held invst. 1.55% 1.85% 1.73% 1.79% 2.42% 1.73% 2.15%
Nonperforming loans $ 12,435 16,610 16,731 19,606 16,501 16,731 13,067
Performing restructured loans $ 9,983 10,145 10,381 10,933 14,151 10,381 13,822
Other real estate owned $ 4,431 1,494 2,329 3,446 4,031 2,329 5,940
Nonperforming loans to loans held for investment 2.68% 3.70% 3.77% 4.55% 3.95% 3.77% 2.83%
Nonperforming assets to total assets 2.52% 2.75% 2.88% 3.45% 3.07% 2.88% 2.75%
END OF PERIOD BALANCES
Total assets $ 669,162 657,365 661,807 667,833 669,489 661,807 691,868
Total loans held for investment $ 464,706 448,858 444,087 430,736 418,158 444,087 461,728
Total deposits $ 577,313 575,850 579,097 584,494 581,404 579,097 590,925
Stockholders' equity $ 50,679 49,956 49,604 50,383 54,192 49,604 53,862
AVERAGE BALANCES
Total assets $ 656,724 657,959 664,516 671,632 671,745 671,529 671,376
Total earning assets $ 613,582 617,147 622,481 629,994 627,855 627,491 626,735
Total loans held for investment $ 455,798 454,039 431,602 425,271 423,587 432,471 465,478
Total non interest-bearing demand deposits $ 90,186 87,597 87,987 85,972 78,299 82,343 62,155
Common stockholders' equity $ 39,401 38,947 39,339 38,803 38,764 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

CONTACT: Carolina Bank Holdings, Inc. T. Allen Liles, EVP and CFO Telephone: 336-286-8746 Email: a.liles@carolinabank.comSource:Carolina Bank Holdings, Inc.