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Carolina Bank Holdings, Inc. Reports a 55.6% Increase in First Quarter EPS to $0.42

GREENSBORO, N.C., April 29, 2013 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported first quarter 2013 results with highlights as follows:

First Quarter 2013 Financial Highlights

  • Diluted net income per common share increased 55.6% to $0.42 in the first quarter of 2013 from $0.27 in the first quarter of 2012.
  • Net income for the first quarter of 2013 was $1,718,000, an increase of 39.9% from net income of $1,228,000 reported in the first quarter of 2012.
  • Net income available to common shareholders was $1,413,000 in the first quarter of 2013 compared to $926,000 in the first quarter of 2012.
  • The net interest margin, computed on a fully taxable basis, decreased to 3.94% in the first quarter of 2013 compared to 3.98% in the first quarter of 2012.
  • Mortgage banking revenues increased 22.9% to $3,895,000 in the first quarter of 2013 from $3,169,000 in the first quarter of 2012.
  • Carolina Bank, the subsidiary of Carolina Bank Holdings, Inc., continued to maintain 'Well Capitalized' status, the highest regulatory capital measure. Capital ratios at March 31, 2013 for Carolina Bank improved to 9.34% for Tier 1 leverage, 12.23% for Tier 1 risk-based, and 15.28% for total risk-based.
  • Average non-interest-bearing demand deposits increased 34.0% in the first quarter of 2013 from the same quarter in 2012.
  • Net loan charge-offs declined to $105,000, or 0.09% of average loans (annualized), in the first quarter of 2013 from $762,000, or 0.64% of average loans (annualized), in the first quarter of 2012.
  • Non-performing assets to total assets decreased to 2.72% at March 31, 2013 from 4.62% at March 31, 2012

"We continued our goal of building shareholder value in 2013 by increasing net income and by strengthening our relationships with customers despite a challenging lending environment," said President and Chief Executive Officer Robert T. Braswell. "Average loans declined during the first quarter of 2013 due to irrational terms being offered by some of our competitors and lackluster demand by borrowers, but we continued our focus on increasing our commercial relationships as evidenced by a 34% increase in average non-interest-bearing demand deposits in the first quarter of 2013 from the first quarter of last year."

"We expanded our residential mortgage operation in Raleigh in the first quarter of 2013 and are pleased to report that our residential mortgage division experienced higher originations and increased profitability in the first quarter of 2013 over the first quarter of 2012. The mortgage division experienced slowing originations and lower profitability on a sequential quarter basis due to reduced refinancing activity by borrowers."

"We are continuing our focus in reducing non-performing assets in 2013 and are pleased that loan charge-offs and non-performing assets declined substantially in 2013," said Braswell. "Our provision for loan losses declined to $400,000 in the first quarter of 2013 from $1,460,000 in the first quarter of 2012 due to the improvement in the quality of our loan portfolio, reduced loan charge-offs, and lower loan balances."

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, Hillsborough, and Raleigh 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
March 31,
2013
December 31,
2012
(unaudited)
(in thousands, except share data)
Assets
Cash and due from banks $ 6,613 $ 7,913
Interest-bearing deposits with banks 72,243 7,186
Securities available-for-sale, at fair value 46,931 42,036
Securities held-to-maturity -- 211
Loans held for sale 77,440 131,762
Loans 431,754 461,728
Less allowance for loan losses (10,239) (9,944)
Net loans 421,515 451,784
Premises and equipment, net 17,551 17,732
Other real estate owned 7,555 5,940
Bank-owned life insurance 10,858 10,765
Other assets 14,058 16,539
Total assets $ 674,764 $ 691,868
Liabilities and Stockholders' Equity
Deposits
Non-interest bearing demand $ 74,432 $ 73,032
NOW, money market and savings 338,133 343,740
Time 173,389 174,153
Total deposits 585,954 590,925
Advances from the Federal Home Loan Bank 2,958 15,982
Securities sold under agreements to repurchase 3,112 1,950
Subordinated debentures 19,582 19,563
Other liabilities and accrued expenses 7,769 9,586
Total liabilities 619,375 638,006
Stockholders' equity
Preferred stock, no par value, authorized 1,000,000 shares; issued and outstanding 16,000 shares 15,677 15,573
Common stock, $1 par value; authorized 20,000,000 shares; issued and outstanding 3,388,773 in 2013 and 3,387,045 in 2012 3,389 3,387
Common stock warrants 1,841 1,841
Additional paid-in capital 15,917 15,906
Retained earnings 16,822 15,408
Stock in directors' rabbi trust (1,128) (1,050)
Directors' deferred fees obligation 1,128 1,050
Accumulated other comprehensive income 1,743 1,747
Total stockholders' equity 55,389 53,862
Total liabilities and stockholders' equity $ 674,764 $ 691,868
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
Three Months
Ended March 31,
2013 2012
(in thousands, except per share data)
Interest income
Loans $ 6,719 $ 7,085
Investment securities, taxable 248 306
Investment securities, non taxable 106 107
Interest from deposits in banks 18 10
Total interest income 7,091 7,508
Interest expense
NOW, money market, savings 320 548
Time deposits 520 709
Other borrowed funds 188 202
Total interest expense 1,028 1,459
Net interest income 6,063 6,049
Provision for loan losses 400 1,460
Net interest income after provision for loan losses 5,663 4,589
Non-interest income
Service charges 252 283
Mortgage banking income 3,895 3,169
Gain on sale of investment securities available-for-sale 22 --
Other 145 167
Total non-interest income 4,314 3,619
Non-interest expense
Salaries and benefits 4,748 4,030
Occupancy and equipment 747 682
Foreclosed property expense 331 399
Professional fees 186 257
Outside data processing 259 206
FDIC insurance 169 215
Advertising and promotion 206 175
Stationery, printing and supplies 153 135
Other 583 411
Total non-interest expense 7,382 6,510
Income before income taxes 2,595 1,698
Income tax expense 877 470
Net income 1,718 1,228
Dividends and accretion on preferred stock 305 302
Net income available to common stockholders $ 1,413 $ 926
Net income per common share
Basic $ 0.42 $ 0.27
Diluted $ 0.42 $ 0.27
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
First Quarter 2013
(unaudited)
Quarterly Years Ended
($ in thousands except for share data) 1st Qtr
2013
4th Qtr
2012
3rd Qtr
2012
2nd Qtr
2012
1st Qtr
2012

2012

2011
EARNINGS
Net interest income $ 6,063 6,351 5,848 5,939 6,049 24,187 24,095
Provision for loan loss $ 400 300 600 -- 1,460 2,360 6,850
NonInterest income $ 4,314 5,655 5,568 4,806 3,619 19,650 11,182
NonInterest expense $ 7,382 8,323 8,085 7,323 6,510 30,243 25,473
Net income $ 1,718 2,187 1,819 2,268 1,228 7,502 2,397
Net income available to common stockholders $ 1,413 1,884 1,505 1,961 926 6,276 1,223
Basic earnings per share $ 0.42 0.56 0.44 0.58 0.27 1.85 0.36
Diluted earnings per share $ 0.42 0.55 0.44 0.58 0.27 1.85 0.36
Average common shares outstanding 3,387,813 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045
Average diluted common shares outstanding 3,398,070 3,420,396 3,387,045 3,387,045 3,387,045 3,395,383 3,387,045
PERFORMANCE RATIOS
Return on average assets * 0.84% 1.11% 0.89% 1.18% 0.56% 0.93% 0.18%
Return on average common equity * 14.68% 19.99% 16.75% 23.44% 11.58% 18.05% 4.03%
Net interest margin (fully-tax equivalent) * 3.94% 4.01% 3.71% 3.86% 3.98% 3.89% 3.92%
Efficiency ratio 70.78% 69.02% 70.55% 67.84% 66.97% 68.68% 71.66%
# full-time equivalent employees - period end 215 208 206 200 184 208 174
CAPITAL
Equity to period-end assets 8.21% 7.79% 7.68% 7.40% 7.18% 7.79% 6.91%
Common tangible equity to assets 5.89% 5.53% 5.39% 5.13% 4.89% 5.53% 4.66%
Tier 1 leverage capital ratio - Bank 9.34% 9.23% 9.00% 8.79% 8.35% 9.23% 8.02%
Tier 1 risk-based capital ratio - Bank 12.23% 11.27% 11.14% 11.12% 9.92% 11.27% 9.60%
Total risk-based capital ratio - Bank 15.28% 14.18% 14.09% 14.12% 12.83% 14.18% 12.50%
Book value per common share $ 11.72 11.30 10.75 10.27 9.65 11.30 9.26
ASSET QUALITY
Net charge-offs $ 105 1,080 988 1,379 762 4,209 7,416
Net charge-offs to average loans * 0.09% 0.95% 0.86% 1.18% 0.64% 0.90% 1.49%
Allowance for loan losses $ 10,239 9,944 10,725 11,112 12,491 9,944 11,793
Allowance for loan losses to loans held invst. 2.37% 2.15% 2.33% 2.42% 2.60% 2.15% 2.42%
Nonperforming loans $ 10,806 13,067 21,387 21,771 23,187 13,067 22,915
Performing restructured loans $ 14,391 13,822 11,192 12,207 15,728 13,822 18,502
Other real estate owned $ 7,555 5,940 4,751 6,384 7,708 5,940 6,728
Nonperforming loans to loans held for investment 2.50% 2.83% 4.66% 4.74% 4.82% 2.83% 4.71%
Nonperforming assets to total assets 2.72% 2.75% 3.87% 4.16% 4.62% 2.75% 4.40%
END OF PERIOD BALANCES
Total assets $ 674,764 691,868 675,746 677,476 668,009 691,868 673,325
Total loans held for investment $ 431,754 461,728 459,323 459,144 480,888 461,728 487,031
Total deposits $ 585,954 590,925 588,672 592,103 588,500 590,925 596,639
Stockholders' equity $ 55,389 53,862 51,879 50,143 47,943 53,862 46,558
AVERAGE BALANCES
Total assets $ 678,373 675,573 675,569 670,339 663,932 671,376 668,753
Total earning assets $ 629,687 635,170 631,347 624,183 616,101 626,736 621,889
Total loans held for investment $ 449,704 456,738 459,800 466,412 479,121 465,478 498,683
Total interest-bearing deposits $ 512,562 519,595 527,545 528,463 529,405 526,237 542,402
Common stockholders' equity $ 39,044 37,487 35,750 33,649 32,159 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.