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Carolina Bank Holdings, Inc. Reports Record Net Income of $7.5 Million in 2012; EPS of $1.85 in 2012 Increases 413% From 2011

GREENSBORO, N.C., Jan. 31, 2013 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported record 2012 net income with highlights as follows:

Fourth Quarter and 2012 Financial Highlights

  • Net income was $7,502,000 in 2012, up 213.0% from $2,397,000 in 2011. Net income increased 112.1% in the fourth quarter of 2012 to $2,187,000 from $1,031,000 in the fourth quarter of 2011.
  • Net income available to common shareholders was $6,276,000 in 2012, an increase of 413.2% from $1,223,000 in 2011. Net income available to common shareholders increased 158.4% to $1,884,000 in the fourth quarter of 2012 from $729,000 in the fourth quarter of 2011.
  • Diluted net income per common share increased 413.9% to $1.85 in 2012 from $0.36 in 2011. Diluted net income per common share rose 150% to $0.55 in the fourth quarter of 2012 from $0.22 in the fourth quarter of 2011.
  • The net interest margin, computed on a fully taxable basis, decreased to 4.01% in the fourth quarter of 2012 compared to 4.14% in the fourth quarter of 2011.
  • Residential mortgage loan originations rose to a record $1.23 billion in 2012 from $784 million in 2011.
  • Carolina Bank, the subsidiary of Carolina Bank Holdings, Inc., continued to maintain 'Well Capitalized' status, the highest regulatory capital measure. Capital ratios at December 31, 2012 for Carolina Bank improved to 9.23% for Tier 1 leverage, 11.27% for Tier 1 risk-based, and 14.18% for Total risk-based.
  • Non-interest bearing demand deposits increased 27.1% in 2012 to $73,032,000 at December 31, 2012.
  • Non-performing assets to total assets declined to 2.75% at December 31, 2012 from 4.40% at December 31, 2011.
  • CLBH stock increased 200% to $7.35 at December 31, 2012 from $2.45 at December 31, 2011.

Robert T. Braswell, President and CEO of Carolina Bank Holdings, Inc. commented, "We are pleased to report record profitability in 2012. Our outstanding financial performance resulted from improved credit quality, stable interest rate margins, and strong results by our mortgage division. Our stock price, which increased 200% during 2012, was one of the best performers in our industry and reflects our outstanding results."

Non-performing assets to total assets decreased to 2.75% at December 31, 2012 from 4.40% at December 31, 2011. Braswell commented, "We continue to maintain a steady focus on improving asset quality and have seen a substantial improvement in credit quality over the past two years. Unlike some of our peers, who have taken massive losses on large problem asset sales with accompanying capital raises, we have maximized shareholder value and avoided shareholder dilution by our steady focus and hard work approach to an industry wide problem."

Braswell further commented, "Our mortgage division originated a record $1.2 billion in residential mortgage loans in 2012 and has been a major contributor to our financial results. Our decision to start a residential mortgage operation in 2007, which was a contrarian strategy at the time, has proven to be a wise move. The mortgage division has expanded over the past few years as origination activity increased during this period of super low interest rates."

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 and mortgage loan production offices in Burlington, Raleigh, and Hillsborough. 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
December 31,
2012 2011*
(unaudited)
(in thousands except share and per share data)
Assets
Cash and due from banks $ 7,913 $ 5,664
Interest-bearing deposits with banks 7,186 7,647
Securities available-for-sale, at fair value 42,036 42,208
Securities held-to-maturity 211 392
Loans held for sale 131,762 91,955
Loans 461,728 487,031
Less allowance for loan losses (9,944) (11,793)
Net loans 451,784 475,238
Premises and equipment, net 17,732 17,442
Other real estate owned 5,940 6,728
Bank-owned life insurance 10,765 10,385
Other assets 16,539 15,666
Total assets $ 691,868 $ 673,325
Liabilities and Stockholders' Equity
Deposits
Non-interest bearing demand $ 73,032 $ 57,475
NOW, money market and savings 343,740 324,449
Time 174,153 214,715
Total deposits 590,925 596,639
Advances from the Federal Home Loan Bank 15,982 3,075
Securities sold under agreements to repurchase 1,950 1,536
Subordinated debentures 19,563 19,489
Other liabilities and accrued expenses 9,586 6,028
Total liabilities 638,006 626,767
Stockholders' equity
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding 16,000 shares in 2012 and 2011 15,573 15,177
Common stock, $1 par value; authorized 20,000,000 shares; issued and outstanding 3,387,045 in 2012 and 2011 3,387 3,387
Common stock warrants 1,841 1,841
Additional paid-in capital 15,906 15,870
Retained earnings 15,408 9,132
Stock in directors' rabbi trust (1,050) (875)
Directors' deferred fees obligation 1,050 875
Accumulated other comprehensive income 1,747 1,151
Total stockholders' equity 53,862 46,558
Total liabilities and stockholders' equity $ 691,868 $ 673,325
* Derived from audited consolidated financial statements.
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
Three Months Years Ended
Ended December 31, December 31,
2012 2011 2012 2011
(in thousands, except per share data)
Interest income
Loans $ 7,072 $ 7,541 $ 27,703 $ 28,743
Investment securities, taxable 273 325 1,195 1,419
Investment securities, non taxable 106 118 402 551
Interest from deposits in banks 25 7 93 77
Total interest income 7,476 7,991 29,393 30,790
Interest expense
NOW, money market, savings 345 598 1,835 2,526
Time deposits 576 757 2,569 3,411
Other borrowed funds 204 194 802 758
Total interest expense 1,125 1,549 5,206 6,695
Net interest income 6,351 6,442 24,187 24,095
Provision for loan losses 300 1,700 2,360 6,850
Net interest income after provision for loan losses 6,051 4,742 21,827 17,245
Non-interest income
Service charges 274 199 1,126 986
Mortgage banking income 5,546 3,260 18,938 9,928
Gain on sale of investment securities available-for-sale 37 -- 37 239
Gain (loss) on sale of other real estate owned 64 (152) (202) (316)
Other 149 119 607 503
Total non-interest income 6,070 3,426 20,506 11,340
Non-interest expense
Salaries and benefits 5,023 3,522 18,085 13,129
Occupancy and equipment 664 696 2,693 2,519
Professional fees 461 226 1,280 929
Outside data processing 246 166 887 793
FDIC insurance 211 209 850 1,026
Advertising and promotion 251 321 797 731
Stationery, printing and supplies 176 172 640 614
Impairment of other real estate owned 272 443 1,466 2,442
Other real estate owned expense 382 223 1,025 1,106
Other 1,052 799 3,376 2,342
Total non-interest expense 8,738 6,777 31,099 25,631
Income before income taxes 3,383 1,391 11,234 2,954
Income tax expense 1,196 360 3,732 557
Net income 2,187 1,031 7,502 2,397
Dividends and accretion on preferred stock 303 302 1,226 1,174
Net income available to common stockholders $ 1,884 $ 729 $ 6,276 $ 1,223
Net income per common share
Basic $ 0.56 $ 0.22 $ 1.85 $ 0.36
Diluted $ 0.55 $ 0.22 $ 1.85 $ 0.36
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Fourth Quarter 2012
(unaudited)
Quarterly Years Ended
4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr
($ in thousands except for share data) 2012 2012 2012 2012 2011 2012 2011
EARNINGS
Net interest income $ 6,351 5,848 5,939 6,049 6,442 24,187 24,095
Provision for loan loss $ 300 600 0 1,460 1,700 2,360 6,850
NonInterest income $ 6,070 5,660 4,976 3,800 3,426 20,506 11,340
NonInterest expense $ 8,738 8,177 7,493 6,691 6,777 31,099 25,631
Net income $ 2,187 1,819 2,268 1,228 1,031 7,502 2,397
Net income available to common stockholders $ 1,884 1,505 1,961 926 729 6,276 1,223
Basic earnings per share $ 0.56 0.44 0.58 0.27 0.22 1.85 0.36
Diluted earnings per share $ 0.55 0.44 0.58 0.27 0.22 1.85 0.36
Average common shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045
Average diluted common shares outstanding 3,420,396 3,387,045 3,387,045 3,387,045 3,387,045 3,395,383 3,387,045
PERFORMANCE RATIOS
Return on average assets * 1.11% 0.89% 1.18% 0.56% 0.43% 0.93% 0.18%
Return on average common equity * 19.99% 16.75% 23.44% 11.58% 9.31% 18.05% 4.03%
Net interest margin (fully-tax equivalent) * 4.01% 3.71% 3.86% 3.98% 4.14% 3.89% 3.92%
Efficiency ratio 70.06% 70.78% 68.34% 67.57% 68.28% 69.28% 71.79%
# full-time equivalent employees - period end 208 206 200 184 174 208 174
CAPITAL
Equity to period-end assets 7.79% 7.68% 7.40% 7.18% 6.91% 7.79% 6.91%
Common tangible equity to assets 5.53% 5.40% 5.13% 4.89% 4.66% 5.53% 4.66%
Tier 1 leverage capital ratio - Bank 9.23% 9.00% 8.79% 8.35% 8.02% 9.23% 8.02%
Tier 1 risk-based capital ratio - Bank 11.27% 11.14% 11.12% 9.92% 9.60% 11.27% 9.60%
Total risk-based capital ratio - Bank 14.18% 14.09% 14.12% 12.83% 12.50% 14.18% 12.50%
Book value per common share $ 11.30 10.75 10.27 9.65 9.26 11.30 9.26
ASSET QUALITY
Net charge-offs $ 1,080 988 1,379 762 1,956 4,209 7,416
Net charge-offs to average loans * 0.95% 0.86% 1.18% 0.64% 1.60% 0.90% 1.49%
Allowance for loan losses $ 9,944 10,725 11,112 12,491 11,793 9,944 11,793
Allowance for loan losses to loans held invst. 2.15% 2.33% 2.42% 2.60% 2.42% 2.15% 2.42%
Nonperforming loans $ 13,068 21,387 21,771 23,187 22,915 13,068 22,915
Performing restructured loans $ 13,822 11,192 12,207 15,728 18,502 13,822 18,502
Other real estate owned $ 5,940 4,751 6,384 7,708 6,728 5,940 6,728
Nonperforming loans to loans held for investment 2.83% 4.66% 4.74% 4.82% 4.71% 2.83% 4.71%
Nonperforming assets to total assets 2.75% 3.87% 4.16% 4.62% 4.40% 2.75% 4.40%
END OF PERIOD BALANCES
Total assets $ 691,868 675,746 677,476 668,009 673,325 691,868 673,325
Total loans held for investment $ 461,728 459,323 459,144 480,888 487,031 461,728 487,031
Total deposits $ 590,925 588,672 592,103 588,500 596,639 590,925 596,639
Stockholders' equity $ 53,862 51,879 50,143 47,943 46,558 53,862 46,558
AVERAGE BALANCES
Total assets $ 675,573 675,569 670,339 663,932 670,436 671,376 668,753
Total earning assets $ 635,170 631,347 624,183 616,101 623,176 626,736 621,889
Total loans held for investment $ 456,738 459,800 466,412 479,121 489,915 465,478 498,683
Total interest-bearing deposits $ 519,595 527,545 528,463 529,405 537,287 526,237 542,402
Common stockholders' equity $ 37,487 35,750 33,649 32,159 31,052 34,778 30,337
* 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.