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Carolina Bank Holdings, Inc. Reports EPS of $0.22 for the Third Quarter of 2014

GREENSBORO, N.C., Oct. 30, 2014 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported third quarter 2014 results with highlights as follows:

3rd Quarter Financial Highlights

  • Loans held for investment increased 9.3% from $430.7 million at September 30, 2013 to $470.8 million at September 30, 2014. Loans held for investment have grown sequentially for the past five quarters.
  • The net interest margin, computed on a fully taxable basis, improved to 3.81% in the third quarter of 2014 from 3.38% in the third quarter of 2013.
  • Average non-interest bearing demand deposits increased 12.0% in the third quarter of 2014 from the third quarter of 2013.
  • Net income of $1,012,000 in the third quarter of 2014 improved on a sequential basis from $750,000 in the second quarter and from $265,000 in the first quarter.
  • Diluted net income per common share was $0.22 in the third quarter of 2014 and $0.23 in the third quarter of 2013. Net income available to common stockholders was $764,000 and $776,000 for the third quarters of 2014 and 2013, respectively.
  • Non-performing assets decreased $0.8 million and $3.0 million during the third quarter and first nine months of 2014, respectively, to $16.1 million at September 30, 2014.
  • Mortgage banking gross revenues decreased $0.3 million to $2.1 million for the third quarter of 2014 from the third quarter of 2013. The Mortgage Division incurred a net loss of $160,000 in the third quarter of 2014 compared to a net loss of $21,000 in the third quarter of 2013. The third quarter loss for the mortgage division improved from a second quarter 2014 net loss of $183,000.

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 3.81% in the third quarter of 2014 from 3.38% in the third quarter of 2013. Our net income, asset quality, loan growth, net interest margin, and non-interest bearing demand deposits all improved sequentially in the third quarter of 2014."

"We recently began originating Small Business Administration (SBA) loans and expect our first closings in the fourth quarter of 2014. We look forward to expanding SBA lending in 2015 since it complements our existing expertise and strengths in commercial lending," said Braswell.

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, Pinehurst, 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
September 30, December 31,
2014 2013
(unaudited)
(in thousands, except share data)
Assets
Cash and due from banks $ 7,484 $ 6,037
Interest-bearing deposits with banks 20,426 58,859
Bank term deposits 13,359 11,118
Securities available-for-sale, at fair value 56,090 62,016
Securities held-to-maturity (fair values of $16,047 in 2014 and $14,462 in 2013) 15,928 14,810
Loans held for sale 43,950 28,382
Loans 470,782 444,087
Less allowance for loan losses (6,546) (7,663)
Net loans 464,236 436,424
Premises and equipment, net 18,582 18,261
Other real estate owned 5,587 2,329
Bank-owned life insurance 11,393 11,129
Other assets 11,994 12,442
Total assets $ 669,029 $ 661,807
Liabilities and Stockholders' Equity
Deposits
Non-interest bearing demand $ 93,832 $ 84,911
NOW, money market and savings 343,107 342,970
Time 150,001 151,216
Total deposits 586,940 579,097
Advances from the Federal Home Loan Bank 2,810 2,885
Securities sold under agreements to repurchase -- 3,032
Subordinated debentures 19,610 19,610
Other liabilities and accrued expenses 8,317 7,579
Total liabilities 617,677 612,203
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 3,434,680 in 2014 and 3,428,776 in 2013 3,435 3,429
Additional paid-in capital 16,295 16,226
Retained earnings 19,677 18,336
Stock in directors' rabbi trust (1,384) (1,347)
Directors' deferred fees obligation 1,384 1,347
Accumulated other comprehensive income 951 619
Total stockholders' equity 51,352 49,604
Total liabilities and stockholders' equity $ 669,029 $ 661,807
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
2014 2013 2014 2013
(in thousands, except per share data)
Interest income
Loans $ 6,139 $ 5,659 $ 17,751 $ 18,500
Investment securities, taxable 385 323 1,216 831
Investment securities, non taxable 131 137 409 350
Interest from deposits in banks 41 91 150 176
Total interest income 6,696 6,210 19,526 19,857
Interest expense
NOW, money market and savings 240 260 716 856
Time deposits 396 469 1,221 1,492
Other borrowed funds 168 179 496 554
Total interest expense 804 908 2,433 2,902
Net interest income 5,892 5,302 17,093 16,955
Provision for loan losses 270 600 1,386 1,100
Net interest income after provision for loan losses 5,622 4,702 15,707 15,855
Non-interest income
Service charges 320 301 940 848
Mortgage banking income 2,114 2,413 5,401 9,894
Gain on sale of investment securities 113 80 256 272
Other 55 111 95 411
Total non-interest income 2,602 2,905 6,692 11,425
Non-interest expense
Salaries and benefits 4,522 4,003 12,373 13,361
Occupancy and equipment 767 742 2,321 2,236
Foreclosed property expense 11 84 174 962
Professional fees 403 385 1,407 926
Outside data processing 274 189 800 643
FDIC insurance 132 135 399 383
Advertising and promotion 222 162 716 653
Stationery, printing and supplies 148 144 426 478
Other 350 385 1,260 1,503
Total non-interest expense 6,829 6,229 19,876 21,145
Income before income taxes 1,395 1,378 2,523 6,135
Income tax expense 383 355 496 1,924
Net income 1,012 1,023 2,027 4,211
Dividends and accretion on preferred stock 248 247 686 858
Net income available to common shareholders $ 764 $ 776 $ 1,341 $ 3,353
Net income per common share
Basic $ 0.22 $ 0.23 $ 0.39 $ 0.98
Diluted $ 0.22 $ 0.23 $ 0.39 $ 0.98
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Third Quarter 2014
(unaudited)
Quarterly Years Ended
3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr
($ in thousands except for share data) 2014 2014 2014 2013 2013 2013 2012
EARNINGS
Net interest income $ 5,892 5,643 5,558 5,360 5,302 22,315 24,187
Provision for loan losses $ 270 346 770 2,350 600 3,450 2,360
NonInterest income $ 2,602 2,340 1,750 2,909 2,905 14,334 19,650
NonInterest expense $ 6,829 6,712 6,335 6,475 6,229 27,620 30,243
Net income (loss) $ 1,012 750 265 (201) 1,023 4,010 7,502
Net income (loss) available to common stockholders $ 764 503 74 (425) 776 2,928 6,276
Basic earnings (loss) per common share $ 0.22 0.15 0.02 (0.12) 0.23 0.86 1.85
Diluted earnings (loss) per common share $ 0.22 0.15 0.02 (0.12) 0.23 0.85 1.85
Average common shares outstanding 3,431,933 3,430,036 3,428,891 3,428,776 3,423,961 3,410,974 3,387,045
Average diluted common shares outstanding 3,431,975 3,434,101 3,433,381 3,437,015 3,435,335 3,426,764 3,395,383
PERFORMANCE RATIOS
Return on average assets ** 0.45% 0.31% 0.05% -0.25% 0.46% 0.44% 0.93%
Return on average common equity ** 7.56% 5.12% 0.77% -4.29% 7.93% 7.52% 18.05%
Net interest margin (fully-tax equivalent) * 3.81% 3.74% 3.75% 3.46% 3.38% 3.59% 3.89%
Efficiency ratio 79.48% 83.19% 85.85% 77.70% 75.27% 74.88% 68.68%
Efficiency ratio (excluding mortgage division) 68.81% 73.10% 71.07% 69.95% 64.43% 69.63% 75.09%
# full-time equivalent employees - period end 193 195 194 191 203 191 208
CAPITAL
Equity to period-end assets 7.68% 7.57% 7.60% 7.50% 7.54% 7.50% 7.79%
Common tangible equity to assets 6.03% 5.93% 5.93% 5.83% 5.91% 5.83% 5.53%
Tier 1 leverage capital ratio - Bank 9.03% 9.07% 8.97% 8.86% 8.81% 8.86% 9.23%
Tier 1 risk-based capital ratio - Bank 11.05% 10.81% 11.13% 11.19% 11.67% 11.19% 11.27%
Total risk-based capital ratio - Bank 13.61% 13.41% 13.79% 13.85% 14.76% 13.85% 14.18%
Book value per common share $ 11.75 11.57 11.36 11.26 11.51 11.26 11.30
ASSET QUALITY
Net charge-offs $ 927 1,432 144 2,388 3,030 5,731 4,209
Net charge-offs to average loans * 0.80% 1.26% 0.13% 2.21% 2.85% 1.33% 0.90%
Allowance for loan losses $ 6,546 7,203 8,289 7,663 7,701 7,663 9,944
Allowance for loan losses to loans held invst. 1.39% 1.55% 1.85% 1.73% 1.79% 1.73% 2.15%
Nonperforming loans $ 10,348 12,435 16,610 16,731 19,606 16,731 13,067
Performing restructured loans $ 9,883 9,983 10,145 10,381 10,933 10,381 13,822
Other real estate owned $ 5,587 4,431 1,494 2,329 3,446 2,329 5,940
Nonperforming loans to loans held for investment 2.20% 2.68% 3.70% 3.77% 4.55% 3.77% 2.83%
Nonperforming assets to total assets 2.40% 2.52% 2.75% 2.88% 3.45% 2.88% 2.75%
END OF PERIOD BALANCES
Total assets $ 669,029 669,162 657,365 661,807 667,833 661,807 691,868
Total loans held for investment $ 470,782 464,706 448,858 444,087 430,736 444,087 461,728
Total deposits $ 586,940 577,313 575,850 579,097 584,494 579,097 590,925
Stockholders' equity $ 51,352 50,679 49,956 49,604 50,383 49,604 53,862
AVERAGE BALANCES
Total assets $ 669,168 656,724 657,959 664,516 671,632 671,529 671,376
Total earning assets $ 623,761 613,582 617,147 622,481 629,994 627,491 626,735
Total loans held for investment $ 466,268 455,798 454,039 431,602 425,271 432,471 465,478
Total non interest-bearing demand deposits $ 96,248 90,186 87,597 87,987 85,972 82,343 62,155
Common stockholders' equity $ 40,069 39,401 38,947 39,339 38,803 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: FOR ADDITIONAL INFORMATION, PLEASE CONTACT: Carolina Bank Holdings, Inc. T. Allen Liles, EVP and CFO Telephone: 336-286-8746 Email: a.liles@carolinabank.comSource:Carolina Bank Holdings, Inc.