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Carolina Bank Holdings, Inc. Reports Results for the Second Quarter of 2016

GREENSBORO, N.C., July 28, 2016 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported second quarter 2016 results with highlights as follows:

2nd Quarter 2016 Financial Highlights

  • Net income available to common shareholders, excluding merger expenses and related tax benefits, increased to $1,739,000, or $0.34 per diluted common share, in the second quarter of 2016 from $1,572,000, or $0.32 per diluted common share, in the second quarter of 2015. (1.)
  • Including merger expenses and related tax benefits, net income was $1,243,000, or $0.25 per diluted common share, in the second quarter of 2016.
  • Book value per common share increased to $12.71 at June 30, 2016 from $12.18 at December 31, 2015 and $11.72 at June 30, 2015.
  • Loans held for investment increased 4.8% during the second quarter of 2016 and are up 2.4% year-to-date.
  • Average non-interest bearing demand deposits increased 19.0% in the second quarter of 2016 from average non-interest bearing demand deposits in the second quarter of 2015.
  • Net interest margin on a fully-taxable basis increased to 3.73% in the second quarter of 2016 from 3.65% in the second quarter of 2015.
  • Nonperforming assets declined to $9.3 million, or 1.32% of assets, at June 30, 2016 from $17.1 million, or 2.5% of assets, at June 30, 2015. Net loan loss charge-offs were $351,000 and $1,694,000 in the second quarters of 2016 and 2015, respectively.
  • The Mortgage Division had net income of $285,000 in the second quarter of 2016 compared to net income of $649,000 in the second quarter of 2015.
  • Carolina Bank Holdings, Inc. (Nasdaq:CLBH) entered into a definitive merger agreement with First Bancorp (Nasdaq:FBNC) on June 21, 2016. CLBH stockholders are scheduled to receive either 1.002 shares of FBNC common stock or $20 in cash for each share of CLBH common stock, subject to total consideration being 75% stock/25% cash. Closing of the merger is contingent upon the receipt of required regulatory and shareholder approvals.

(1.) Net income available to common shareholders and diluted earnings per share, excluding merger expenses and related tax benefits, are not recognized under United States generally accepted accounting principles. These measures are calculated by excluding direct merger expenses, net of any reduction in income taxes, from net income.

Robert T. Braswell, President and CEO, commented, “I am pleased with our progress in building and improving our relationships with customers as evidenced by our growth in loans and non-interest bearing deposits during the second quarter. Excluding the impact of merger expenses, our net income in the second quarter of 2016, was the highest quarterly net income in three and a half years.”

“We have also made substantial improvements in our credit quality over the past few years which eliminated the need to make a provision for loan losses during the first six months of 2016. We believe that our strong credit culture and commitment to exceptional customer service compliment the similar efforts at First Bank. We are looking forward to a smooth merger with First Bank late this year or early next year and already see many future benefits for our customers and shareholders,” 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, three in Greensboro, one in Asheboro, one in High Point, one in Burlington, and two in Winston-Salem. Residential mortgage loan production offices are located in Burlington, Chapel Hill, 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.

The information as of and for the quarter ended June 30, 2016 is unaudited. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance or determinations 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, completion of our pending merger and successful merger integration, 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,
2016 2015
(unaudited)
(in thousands, except share data)
Assets
Cash and due from banks $ 6,869 $ 6,559
Interest-bearing deposits with banks 45,352 69,233
Bank term deposits 18,847 16,604
Securities available-for-sale, at fair value 45,610 47,360
Securities held-to-maturity (fair values of $14,988 in 2016 and $15,226 in 2015) 14,370 14,954
Loans held for sale 57,432 39,583
Loans 476,783 465,804
Less allowance for loan losses (5,618) (5,872)
Net loans 471,165 459,932
Premises and equipment, net 18,618 19,007
Other real estate owned 4,212 4,592
Bank-owned life insurance 12,024 11,843
Other assets 11,996 11,131
Total assets $ 706,495 $ 700,798
Liabilities and Stockholders' Equity
Deposits
Non-interest bearing demand $ 140,717 $ 125,189
NOW, money market and savings 337,313 349,815
Time 121,118 132,303
Total deposits 599,148 607,307
Advances from the Federal Home Loan Bank 12,627 2,681
Securities sold under agreements to repurchase 47 47
Subordinated debentures 19,610 19,610
Other liabilities and accrued expenses 10,943 10,014
Total liabilities 642,375 639,659
Stockholders' equity
Preferred stock, no par value, authorized 1,000,000 shares;
Series A preferred stock - none issued and outstanding - -
Series B convertible preferred stock - none issued and outstanding - -
Common stock, $1 par value; authorized 20,000,000 shares; issued
and outstanding 5,043,108 in 2016 and 5,021,330 in 2015 5,043 5,021
Additional paid-in capital 29,448 29,234
Retained earnings 28,518 26,174
Stock in directors' rabbi trust (2,015) (1,831)
Directors' deferred fees obligation 2,015 1,831
Accumulated other comprehensive income 1,111 710
Total stockholders’ equity 64,120 61,139
Total liabilities and stockholders’ equity $ 706,495 $ 700,798

Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2016 2015 2016 2015
(in thousands, except per share data)
Interest income
Loans $ 6,153 $ 6,025 $ 11,983 $ 12,017
Investment securities, taxable 325 325 717 663
Investment securities, non taxable 115 125 233 247
Interest from deposits in banks 140 65 294 126
Total interest income 6,733 6,540 13,227 13,053
Interest expense
NOW, money market, savings 227 237 466 476
Time deposits 246 287 508 599
Other borrowed funds 231 151 453 303
Total interest expense 704 675 1,427 1,378
Net interest income 6,029 5,865 11,800 11,675
Provision for loan losses - 535 - 835
Net interest income after provision for loan losses 6,029 5,330 11,800 10,840
Non-interest income
Service charges 307 312 598 615
Mortgage banking income 2,879 3,721 4,582 6,628
Gain on sale of SBA loans - 53 237 53
Other 83 42 141 115
Total non-interest income 3,269 4,128 5,558 7,411
Non-interest expense
Salaries and benefits 4,443 4,582 8,680 8,900
Occupancy and equipment 699 759 1,448 1,535
Foreclosed property expense 43 155 88 24
Professional fees 507 454 922 903
Outside data processing 277 265 551 539
FDIC insurance 108 130 201 261
Advertising and promotion 213 160 490 353
Stationery, printing and supplies 160 147 291 298
Merger expense 585 - 585 -
Other 419 449 828 830
Total non-interest expense 7,454 7,101 14,084 13,643
Income before income taxes 1,844 2,357 3,274 4,608
Income tax expense 601 691 930 1,313
Net income 1,243 1,666 2,344 3,295
Dividends and accretion on preferred stock - 94 - 341
Net income available to common stockholders $ 1,243 $ 1,572 $ 2,344 $ 2,954
Net income per common share
Basic $ 0.25 $ 0.38 $ 0.47 $ 0.78
Diluted $ 0.25 $ 0.32 $ 0.46 $ 0.70

Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Second Quarter 2016
(unaudited)
Quarterly Years Ended
2nd Qtr1st Qtr4th Qtr3rd Qtr2nd Qtr
($ in thousands except for share data) 2016 2016 2015 2015 2015 2015 2014
EARNINGS
Net interest income$ 6,029 5,771 6,081 5,889 5,865 23,645 23,257
Provision for loan losses$ - - (200) 450 535 1,085 1,436
NonInterest income$ 3,269 2,289 2,591 3,641 4,128 13,643 9,413
NonInterest expense$ 7,454 6,630 7,276 7,015 7,101 27,934 27,004
Net income$ 1,243 1,101 1,036 1,436 1,666 5,767 3,346
Net income available to common stockholders$ 1,243 1,101 1,036 1,436 1,572 5,426 2,413
Basic earnings per common share$ 0.25 0.22 0.21 0.29 0.38 1.24 0.70
Diluted earnings per common share$ 0.25 0.22 0.21 0.29 0.32 1.17 0.70
Average common shares outstanding 5,038,723 5,036,150 5,008,301 4,990,163 4,099,303 4,389,086 3,431,385
Average diluted common shares outstanding 5,042,626 5,041,038 5,019,056 5,000,352 4,988,938 4,620,411 3,433,603
PERFORMANCE RATIOS
Return on average assets * 0.71% 0.63% 0.59% 0.83% 0.96% 0.84% 0.50%
Return on average common equity ** * 7.89% 7.14% 6.79% 9.59% 11.38% 9.96% 6.05%
Net interest margin (fully-tax equivalent) * 3.73% 3.61% 3.79% 3.74% 3.65% 3.73% 3.80%
Efficiency ratio (excluding merger expenses) 72.89% 80.98% 83.05% 72.94% 70.38% 74.18% 81.78%
Efficiency ratio (excluding mortgage div/merger X) 67.93% 71.95% 75.06% 73.29% 69.79% 71.72% 71.73%
# full-time equivalent employees - period end 187 190 192 190 192 192 189
CAPITAL
Equity to period-end assets 9.08% 8.88% 8.72% 8.72% 8.55% 8.72% 7.75%
Common tangible equity to assets 9.08% 8.88% 8.72% 8.72% 8.55% 8.72% 6.13%
Tier 1 leverage capital ratio - Bank 9.94% 9.74% 9.71% 9.65% 9.24% 9.71% 9.11%
Tier 1 risk-based capital ratio - Bank 12.20% 12.62% 12.09% 11.66% 11.23% 12.09% 11.42%
Total risk-based capital ratio - Bank 13.82% 14.40% 13.81% 13.90% 13.21% 13.81% 13.67%
Book value per common share$ 12.71 12.45 12.18 12.04 11.72 12.18 12.13
ASSET QUALITY
Net loan charge-offs (recoveries)$ 351 (97) 1,495 (1,321) 1,694 1,733 2,579
Net charge-offs (recoveries) to average loans * 0.30% -0.08% 1.29% -1.15% 1.45% 0.37% 0.56%
Allowance for loan losses$ 5,618 5,969 5,872 7,567 5,795 5,872 6,520
Allowance for loan losses to loans held invst. 1.18% 1.31% 1.26% 1.62% 1.26% 1.26% 1.38%
Nonperforming loans$ 5,101 3,519 3,110 8,964 11,716 3,110 6,458
Performing restructured loans$ 9,486 12,078 9,687 9,317 9,450 9,687 9,774
Other real estate owned$ 4,212 4,587 4,592 5,073 5,352 4,592 5,610
Nonperforming loans to loans held for investment 1.07% 0.77% 0.67% 1.92% 2.54% 0.67% 1.37%
Nonperforming assets to total assets 1.32% 1.15% 1.10% 2.04% 2.50% 1.10% 1.78%
END OF PERIOD BALANCES
Total assets$ 706,495 705,704 700,798 688,974 683,685 700,798 679,263
Total loans held for investment$ 476,783 455,139 465,804 465,889 461,000 465,804 472,189
Total deposits$ 599,148 601,073 607,307 596,489 592,719 607,307 594,898
Stockholders' equity$ 64,120 62,687 61,139 60,098 58,460 61,139 52,655
AVERAGE BALANCES
Total assets$ 706,633 702,473 692,522 684,917 699,101 689,842 664,812
Total earning assets$ 663,082 657,915 646,158 633,304 654,317 643,031 620,996
Total loans held for investment$ 470,021 466,301 463,285 459,538 465,914 465,163 462,870
Total non interest-bearing demand deposits$ 141,092 129,367 125,279 119,074 118,577 118,355 94,618
Common stockholders' equity$ 63,349 61,979 60,522 59,384 55,414 54,479 39,904
* annualized for all periods presented
**return on average common equity is computed using net income available to common stockholders

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

Source:Carolina Bank Holdings, Inc.