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Carolina Bank Holdings, Inc. Reports EPS of $0.31 in the Third Quarter

GREENSBORO, N.C., Oct. 27, 2016 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported third quarter 2016 results with highlights as follows:

Third Quarter 2016 Financial Highlights

  • Net income available to common shareholders increased to $1,564,000, or $0.31 per diluted common share, in the third quarter of 2016 from $1,436,000, or $0.29 per diluted common share in the third quarter of 2015.
  • Book value per common share increased to $13.00 at September 30, 2016 from $12.18 at December 31, 2015 and $12.04 at September 30, 2015.
  • Loans held for investment increased 5.55% during the third quarter of 2016 and are up 8.03% year-to-date.
  • Average non-interest bearing demand deposits increased 23.33% in the third quarter of 2016 from average non-interest bearing demand deposits in third quarter of 2015.
  • The net interest margin on a fully taxable basis decreased to 3.60% in the third quarter of 2016 from 3.74% in the third quarter of 2015; however, net interest income on a fully taxable basis increased to $6,059,000 in the third quarter of 2016 from $5,976,000 in the third quarter of 2015 due to growth and improved asset quality.
  • Nonperforming assets declined to $8,306,000, or 1.17% of assets, at September 30, 2016 from $14,037,000, or 2.04% of assets, at September 30, 2015.
  • Net loan loss charge-offs were $108,000 for the first nine months of 2016 compared to $1,733,000 for the year ended December 31, 2015.
  • The Commercial/Retail Bank segment which excludes the mortgage division and the holding company had net income of $1,670,000 and $940,000 for the third quarters of 2016 and 2015, respectively. The increase in 2016 resulted from a lower provision for loan losses, lower operating expenses, and higher gains from the origination and sale of SBA loans.
  • 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.

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 third quarter. We have also gained momentum in originating and selling SBA loans during 2016 and have continued to improve our credit quality.”

We are excited about our proposed merger with First Bancorp who shares our philosophy of delivering unparalleled service and financial solutions. Our team has been busy with merger integration planning which is proceeding according to schedule. I encourage our shareholders to vote "for" the merger when proxy materials are delivered in November,” 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.

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.

Additional Information About the Proposed Merger with First Bancorp and Where to Find It

This material contained in this press release is not a substitute for the proxy statement/prospectus or any other documents which First Bancorp and Carolina Bank Holdings may send to their respective shareholders in connection with the proposed merger. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities.

In connection with the proposed transaction, First Bancorp has filed with the SEC a Registration Statement on Form S-4 that includes a proxy statement of Carolina Bank Holdings, Inc. and a prospectus of First Bancorp, as well as other relevant documents concerning the proposed transaction. Investors and security holders are also urged to carefully review and consider each of First Bancorp’s and Carolina Bank Holdings’ public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The proxy statement/prospectus will be mailed to the shareholders of Carolina Bank Holdings on or about November 3, 2016. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, INVESTORS AND SHAREHOLDERS OF CAROLINA BANK HOLDINGS ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders may obtain a free copy of the proxy statement/prospectus and other filings containing information about First Bancorp and Carolina Bank Holdings at the SEC’s website at www.sec.gov. Investors and security holders may also obtain free copies of the documents filed with the Securities and Exchange Commission by First Bancorp on its website at http://www.localfirstbank.com and by Carolina Bank Holdings, Inc. on its website at http://www.carolinabank.com.

First Bancorp, Carolina Bank Holdings, Inc. and certain of their respective directors and executive officers may, under the SEC’s rules, be deemed to be participants in the solicitation of proxies of shareholders of Carolina Bank Holdings, Inc. in connection with the proposed transaction. Information about the directors and executive officers of First Bancorp and their ownership of First Bancorp common stock is set forth in the proxy statement for First Bancorp’s 2016 Annual Meeting of Shareholders, as filed with the SEC on Schedule 14A on April 4, 2016. Information about the directors and executive officers of Carolina Bank Holdings and their ownership of Carolina Bank Holdings’ common stock is set forth in the proxy statement for Carolina Bank Holdings, Inc.’s 2016 Annual Meeting of Shareholders, as filed with the SEC on a Schedule 14A on April 5, 2016. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus regarding the proposed transaction when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.

Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Balance Sheets
September 30, December 31,
2016 2015
(unaudited)
(in thousands, except share data)
Assets
Cash and due from banks $ 4,807 $ 6,559
Interest-bearing deposits with banks 47,658 69,233
Bank term deposits 15,139 16,604
Securities available-for-sale, at fair value 41,458 47,360
Securities held-to-maturity (fair values of $14,557 in 2016 and $15,226 in 2015) 14,031 14,954
Loans held for sale 42,616 39,583
Loans 503,226 465,804
Less allowance for loan losses (5,764) (5,872)
Net loans 497,462 459,932
Premises and equipment, net 18,389 19,007
Other real estate owned 3,914 4,592
Bank-owned life insurance 12,118 11,843
Other assets 11,298 11,131
Total assets $ 708,890 $ 700,798
Liabilities and Stockholders' Equity
Deposits
Non-interest bearing demand $ 143,057 $ 125,189
NOW, money market and savings 355,364 349,815
Time 103,062 132,303
Total deposits 601,483 607,307
Advances from the Federal Home Loan Bank 12,100 2,681
Securities sold under agreements to repurchase - 47
Subordinated debentures 19,610 19,610
Other liabilities and accrued expenses 10,131 10,014
Total liabilities 643,324 639,659
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 5,045,358 in 2016 and 5,021,330 in 2015 5,045 5,021
Additional paid-in capital 29,471 29,234
Retained earnings 30,082 26,174
Stock in directors' rabbi trust (2,089) (1,831)
Directors' deferred fees obligation 2,089 1,831
Accumulated other comprehensive income 968 710
Total stockholders’ equity 65,566 61,139
Total liabilities and stockholders’ equity $ 708,890 $ 700,798




Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
2016 2015 2016 2015
(in thousands, except per share data)
Interest income
Loans $ 6,063 $ 6,062 $ 18,046 $ 18,079
Investment securities, taxable 306 322 1,023 985
Investment securities, non taxable 116 116 349 363
Interest from deposits in banks 112 57 406 183
Total interest income 6,597 6,557 19,824 19,610
Interest expense
NOW, money market, savings 234 237 700 713
Time deposits 223 277 731 876
Other borrowed funds 240 154 693 457
Total interest expense 697 668 2,124 2,046
Net interest income 5,900 5,889 17,700 17,564
Provision for loan losses - 450 - 1,285
Net interest income after provision for loan losses 5,900 5,439 17,700 16,279
Non-interest income
Service charges 318 304 916 919
Mortgage banking income 2,533 3,220 7,115 9,848
Gain on sale of SBA loans 261 67 498 120
Other 70 50 211 165
Total non-interest income 3,182 3,641 8,740 11,052
Non-interest expense
Salaries and benefits 4,536 4,533 13,216 13,433
Occupancy and equipment 722 783 2,170 2,318
Professional fees 457 474 1,379 1,377
Outside data processing 280 270 831 809
FDIC insurance 109 132 310 393
Advertising and promotion 244 225 734 578
Stationery, printing and supplies 142 149 433 447
Merger expense 154 - 739 -
Other 279 449 1,195 1,303
Total non-interest expense 6,923 7,015 21,007 20,658
Income before income taxes 2,159 2,065 5,433 6,673
Income tax expense 595 629 1,525 1,942
Net income 1,564 1,436 3,908 4,731
Dividends and accretion on preferred stock - - - 341
Net income available to common stockholders $ 1,564 $ 1,436 $ 3,908 $ 4,390
Net income per common share
Basic $ 0.31 $ 0.29 $ 0.78 $ 1.05
Diluted $ 0.31 $ 0.29 $ 0.77 $ 0.98




Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Third Quarter 2016
(unaudited)
Quarterly Years Ended
3rd Qtr2nd Qtr1st Qtr4th Qtr3rd Qtr
($ in thousands except for share and per share data) 2016 2016 2016 2015 2015 2015 2014
EARNINGS
Net interest income$ 5,900 6,029 5,771 6,081 5,889 23,645 23,257
Provision for loan losses$ - - - (200) 450 1,085 1,436
NonInterest income$ 3,182 3,269 2,289 2,591 3,641 13,643 9,413
NonInterest expense$ 6,923 7,454 6,630 7,276 7,015 27,934 27,004
Net income$ 1,564 1,243 1,101 1,036 1,436 5,767 3,346
Net income available to common stockholders$ 1,564 1,243 1,101 1,036 1,436 5,426 2,413
Basic earnings per common share$ 0.31 0.25 0.22 0.21 0.29 1.24 0.70
Diluted earnings per common share$ 0.31 0.25 0.22 0.21 0.29 1.17 0.70
Average common shares outstanding 5,044,646 5,038,723 5,036,150 5,008,301 4,990,163 4,389,086 3,431,385
Average diluted common shares outstanding 5,048,705 5,042,626 5,041,038 5,019,056 5,000,352 4,620,411 3,433,603
PERFORMANCE RATIOS
Return on average assets * 0.87% 0.71% 0.63% 0.59% 0.83% 0.84% 0.50%
Return on average common equity ** * 9.59% 7.89% 7.14% 6.79% 9.59% 9.96% 6.05%
Net interest margin (fully-tax equivalent) * 3.60% 3.73% 3.61% 3.79% 3.74% 3.73% 3.80%
Efficiency ratio (excluding merger expenses) 73.22% 72.89% 80.98% 83.05% 72.94% 74.18% 81.78%
Efficiency ratio (excluding mortgage div/merger X) 64.39% 67.83% 71.95% 75.06% 73.29% 71.72% 71.73%
# full-time equivalent employees - period end 177 187 190 192 190 192 189
CAPITAL
Equity to period-end assets 9.25% 9.08% 8.88% 8.72% 8.72% 8.72% 7.75%
Common tangible equity to assets 9.25% 9.08% 8.88% 8.72% 8.72% 8.72% 6.13%
Tier 1 leverage capital ratio - Bank 10.10% 9.94% 9.74% 9.71% 9.65% 9.71% 9.11%
Tier 1 risk-based capital ratio - Bank 12.35% 12.20% 12.62% 12.09% 11.66% 12.09% 11.42%
Total risk-based capital ratio - Bank 13.98% 13.82% 14.40% 13.81% 13.90% 13.81% 13.67%
Book value per common share$ 13.00 12.71 12.45 12.18 12.04 12.18 12.13
ASSET QUALITY
Net loan charge-offs (recoveries)$ (146) 351 (97) 1,495 (1,321) 1,733 2,579
Net charge-offs (recoveries) to average loans * -0.12% 0.30% -0.08% 1.29% -1.15% 0.37% 0.56%
Allowance for loan losses$ 5,764 5,618 5,969 5,872 7,567 5,872 6,520
Allowance for loan losses to loans held invst. 1.15% 1.18% 1.31% 1.26% 1.62% 1.26% 1.38%
Nonperforming loans$ 4,392 5,101 3,519 3,110 8,964 3,110 6,458
Performing restructured loans$ 9,375 9,486 12,078 9,687 9,317 9,687 9,774
Other real estate owned$ 3,914 4,212 4,587 4,592 5,073 4,592 5,610
Nonperforming loans to loans held for investment 0.87% 1.07% 0.77% 0.67% 1.92% 0.67% 1.37%
Nonperforming assets to total assets 1.17% 1.32% 1.15% 1.10% 2.04% 1.10% 1.78%
END OF PERIOD BALANCES
Total assets$ 708,890 706,495 705,704 700,798 688,974 700,798 679,263
Total loans held for investment$ 503,226 476,783 455,139 465,804 465,889 465,804 472,189
Total deposits$ 601,483 599,148 601,073 607,307 596,489 607,307 594,898
Stockholders' equity$ 65,566 64,120 62,687 61,139 60,098 61,139 52,655
AVERAGE BALANCES
Total assets$ 712,919 706,633 702,473 692,522 684,917 689,842 664,812
Total earning assets$ 669,231 663,082 657,915 646,158 633,304 643,031 620,996
Total loans held for investment$ 494,502 470,021 466,301 463,285 459,538 465,163 462,870
Total non interest-bearing demand deposits$ 146,848 141,092 129,367 125,279 119,074 118,355 94,618
Common stockholders' equity$ 64,855 63,349 61,979 60,522 59,384 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.