EXHIBIT 99.1
Carolina Bank Holdings, Inc. Announces Record 2007 EPS of $.89; Total Assets Exceed $500 Million
GREENSBORO, N.C., Jan. 23, 2008 (PRIME NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported record 2007 earnings. Net income was $3.02 million, an increase of 7.6% over the $2.81 million reported in 2006. Diluted earnings per share were $0.89 in 2007 compared with $0.83 for 2006, an increase of 7.2%. Per share results were restated to reflect the impact of the six-for-five stock split in 2007. Performance reflects continued strong growth in loans and deposits and improvement in asset quality in the most recent quarter.
Asset growth remains strong. At December 31, 2007, Carolina Bank Holdings had total assets of $500.12 million, an increase of $88.52 million or 21.5% over the past year. Loans held for investment (HFI) increased $85.05 million, or 26.9%, over the prior year reaching $400.78 million and grew $28.19 million, or 7.6% during the 2007 fourth quarter. Deposits were up $58.16 million in 2007, or 16.1% to $418.57 million at December 31, 2007. Robert T. Braswell, President and CEO of Carolina Bank Holdings, commented, "The past two years finds us crossing milestones in growth, which we like to think of as a Customer Satisfaction gauge."
Net income was $686,000, or $0.20 per diluted share, for the fourth quarter of 2007 compared to $555,000, or $0.16 per diluted share, for the fourth quarter of 2006.
Mr. Braswell continued, "Our 2007 earnings growth, while positive, was hindered by an unexpected six fold increase in our FDIC insurance and by investments in new offices and people who will provide returns to our Company in future periods. Our superior growth, achieved throughout our footprint along with positive contributions from our new division, Carolina Wholesale Mortgage, were the keys to our success in 2007 and promise to drive profitable results in the future. We did not face any 'sub-prime losses' that have hampered national and money center banks."
Net interest income for 2007 increased $1.98 million from 2006, or 16.3% to $14.17 million, reflecting a 16.9% increase in average earning assets and no change in the net interest margin of 3.3%. Fourth quarter 2007 net interest income increased $440,000, or 14.2%, over the same period in 2006 as average earning assets rose 20.0% and the net interest margin decreased by 12 basis points to 3.08%. The 1% decline in the prime rate during the last four months of 2007 negatively impacted our net interest margin in late 2007 because of our asset sensitivity and due to an unusually competitive deposit interest rate market.
Non-interest income for 2007 was $1.73 million, a decrease of $44,000 or 2.5% from 2006. Excluding a 2006 gain of $183,000 on the sale of repossessed assets and a dividend distribution of $117,000 relating to an investment in a limited partnership investment company, as well as 2007 losses on repossessed assets of $14,000, non-interest income was $1.74 million in 2007 and $1.47 million in 2006. Non-interest income increased to $645,000 in the fourth quarter of 2007, up $310,000, or 92.5% from the fourth quarter of 2006. Our new wholesale mortgage division, formed in July 2007, was responsible for the $262,000 increase in mortgage banking income in the fourth quarter of 2007. The wholesale mortgage division was $0.012 accretive to earnings per share in 2007. Income is recognized when loans are originated, or on a trading basis, since a commitment to sell loans is generally consummated when a commitment to originate is made, thereby eliminating most of the market risk.
Non-interest expense increased to $9.93 million in 2007, an increase of 18.5% from 2006, and increased 12.6% to $2.70 million in the fourth quarter of 2007. The increase in expenses in 2007 related to our strong loan, deposit and fee income growth. New offices in High Point and Burlington, with Burlington being converted from a limited service office, and the new wholesale mortgage division accounted for much of the new expense in 2007. FDIC insurance expense increased $228,000 to $267,000 in 2007 due to new assessments to the banking industry in 2007 coupled with deposit growth.
Mr. Braswell added, "We have made progress returning our bank's asset quality to levels more in line with our historical experience. While non-performing assets increased at December 31, 2007 from a year ago, improvement occurred on a linked quarter basis." Non-performing assets were $4.54 million, or 0.91% of assets at December 31, 2007, compared with $2.43 million, or 0.59% of assets at December 31, 2006. The bank had net charge-offs of $528,000, or 0.15% of average loans in 2007 and $508,000, or 0.18% of average loans for 2006. The allowance for loan losses was 1.13% of loans held for investment at December 31, 2007.
Shareholders' equity totaled $29.64 million at December 31, 2007, up $3.71 million from twelve months ago. Shares outstanding at December 31, 2007 were 3,315,157.
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 three counties: Guilford, Alamance and Randolph. The bank has six full-service banking locations, three in Greensboro, one in Asheboro, one in High Point, and one in Burlington, North Carolina. The bank is building a new corporate headquarters in downtown Greensboro, with expected occupancy in late 2008. The Company's stock is listed on the NASDAQ Capital 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 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
At December 31, 2007 and 2006
December 31,
2007 2006
unaudited
-------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 4,967 $ 4,762
Short-term investments and interest-earning
deposits 55 221
Federal funds sold -- --
-------------------
Total cash and cash equivalents 5,022 4,983
Securities available for sale, at fair value 59,304 71,054
Securities held-to-maturity, at amortized cost 3,133 3,637
Loans held for trading, at fair value 11,869 --
Loans held for investment 400,784 315,732
Allowance for loan losses (4,532) (3,898)
-------------------
Net loans 408,121 311,834
Premises and equipment, net 13,792 10,078
Other assets 10,744 10,006
-------------------
Total assets $ 500,116 $ 411,592
===================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 30,491 $ 26,984
Interest-bearing 388,082 333,431
-------------------
Total deposits 418,573 360,415
Short-term borrowings 6,102 3,605
Federal Home Loan Bank advances 31,581 8,908
Junior subordinated debentures 10,310 10,310
Other liabilities 3,910 2,425
-------------------
Total liabilities 470,476 385,663
STOCKHOLDERS' EQUITY
Common stock, $1 par value;
20,000,000 shares authorized;
issued and outstanding 3,315,157
in 2007 and 3,266,866 in 2006 3,315 2,722
Additional paid-in capital 15,379 15,597
Retained earnings 10,875 7,851
Stock in director rabbi trust (524) (453)
Directors deferred fees obligation 524 453
Accumulated other comprehensive (loss) 71 (241)
-------------------
Total stockholders' equity 29,640 25,929
-------------------
Total liabilities and stockholders' equity $ 500,116 $ 411,592
===================
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three months and years ended December 31, 2007 and 2006
(unaudited)
For the
Three Months Ended For the Year Ended
December 31, December 31,
------------------ -------------------
2007 2006 2007 2006
---------------------------------------------- -------------------
(in thousands, except per share data)
Interest income:
Loans $ 7,612 $ 6,324 $ 29,172 $ 23,175
Securities - taxable 734 906 3,160 3,236
Securities -
non-taxable 78 -- 140 --
Interest from
federal funds sold 1 38 187 414
Other interest
income 2 3 32 33
-------------------- --------------------
Total interest income 8,427 7,271 32,691 26,858
Interest expense:
Deposits 4,386 3,803 16,893 12,990
FHLB advances and
other 191 173 861 935
Junior subordinated
debentures 308 194 766 744
-------------------- --------------------
Total interest expense 4,885 4,170 18,520 14,669
-------------------- --------------------
Net interest income 3,542 3,101 14,171 12,189
Provision for loan
losses 420 310 1,162 1,196
-------------------- --------------------
Net interest income
after provision
for loan losses 3,122 2,791 13,009 10,993
Noninterest income:
Service charges 204 190 748 684
Mortgage banking
income 343 81 543 352
Repossessed asset
gains (losses) (13) -- (14) 183
Other 111 64 452 554
-------------------- --------------------
Total noninterest income 645 335 1,729 1,773
Noninterest expense:
Salaries and
benefits 1,380 1,080 5,344 4,268
Occupancy and
equipment 372 289 1,330 1,099
Professional fees 295 265 806 827
Outside data
processing 163 141 607 575
Advertising and
promotion 118 140 473 472
Stationery, printing
and supplies 129 112 469 373
Impairment of
non-marketable
securities -- -- 100 --
Other 238 366 798 767
-------------------- --------------------
Total noninterest
expense 2,695 2,393 9,927 8,381
-------------------- --------------------
Income before income
taxes 1,072 733 4,811 4,385
Income taxes expense 386 178 1,787 1,574
-------------------- --------------------
Net income $ 686 $ 555 $ 3,024 $ 2,811
==================== ====================
Basic earnings per
common share $ 0.21 $ 0.17 $ 0.92 $ 0.86
Diluted earnings per
common share $ 0.20 $ 0.16 $ 0.89 $ 0.83
Average common
shares outstanding 3,313,724 3,266,866 3,280,315 3,265,557
Average common shares
and dilutive
potential common
shares outstanding 3,394,797 3,408,367 3,402,711 3,383,070
Total Shares
outstanding at end
of period 3,315,157 3,266,866 3,315,157 3,266,866
All per share information has been presented or restated to reflect
the effect of the six-for-five stock split in 2007.
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Fourth Quarter 2007
(unaudited)
Quarterly
------------------------------------------------------
4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr.
2007 2007 2007 2007 2006
------------------------------------------------------
($ in thousands
except for
share data)
EARNINGS
Net interest
income $ 3,542 3,627 3,705 3,297 3,101
Provision for
loan loss $ 420 272 215 255 310
NonInterest
income $ 645 386 340 358 335
NonInterest
expense $ 2,695 2,459 2,491 2,282 2,393
Net income $ 686 800 837 701 555
Basic
earnings
per share $ 0.21 0.24 0.26 0.21 0.17
Diluted
earnings
per share $ 0.20 0.24 0.25 0.21 0.16
Average
shares
outstanding 3,313,724 3,273,806 3,266,866 3,266,866 3,266,866
Average
diluted
shares
outstanding 3,394,797 3,392,116 3,408,938 3,412,313 3,408,367
PERFORMANCE RATIOS
Return on
average assets * 0.57% 0.70% 0.76% 0.66% 0.56%
Return on
average
common equity * 9.45% 11.55% 12.39% 10.65% 8.68%
Net interest
margin
(fully-tax
equivalent) * 3.08% 3.31% 3.53% 3.28% 3.20%
Efficiency ratio 64.37% 61.28% 59.11% 62.44% 62.22%
# full-time
equivalent
employees -
period end 89 86 77 74 69
CAPITAL
Equity to
ending assets 5.93% 6.08% 6.13% 6.11% 6.30%
Tier 1 leverage
capital ratio n/a n/a n/a n/a 8.76%
Tier 1 risk-based
capital ratio n/a n/a n/a n/a 9.97%
Total risk-based
capital ratio n/a n/a n/a n/a 11.45%
Book value
per share $ 8.94 8.68 8.30 8.20 7.94
ASSET
QUALITY
Net charge-
offs $ 364 21 2 141 18
Net charge-
offs to
average
loans* 0.36% 0.02% 0.00% 0.17% 0.02%
Allowance for
loan losses $ 4,532 4,476 4,225 4,012 3,898
Allowance for
loan losses
to loans
held invst. 1.13% 1.19% 1.21% 1.21% 1.23%
Nonperforming
loans $ 3,538 4,443 2,139 2,385 2,388
Restructured
loans $ 0 0 0 45 45
Other real
estate owned $ 1,001 190 0 0 0
Nonperforming
loans to
loans held for
investment 0.88% 1.19% 0.61% 0.73% 0.77%
Nonperforming
assets to
total assets 0.91% 0.99% 0.48% 0.55% 0.59%
END OF PERIOD
BALANCES
Total assets $ 500,116 468,327 441,975 438,675 411,592
Total earning
assets $ 475,145 444,498 421,759 415,904 390,644
Total loans
held for
investment $ 400,784 374,602 349,782 332,112 315,732
Total
deposits $ 418,573 409,094 387,108 391,936 360,415
Stockholders'
equity $ 29,640 28,487 27,108 26,788 25,929
AVERAGE
BALANCES
Total assets $ 484,039 458,152 437,731 424,839 398,427
Total earning
assets $ 464,675 440,045 419,834 401,683 387,233
Total loans $ 399,223 363,801 345,115 326,161 306,272
Total
interest-
bearing
deposits $ 379,562 371,395 355,810 340,430 318,398
Stockholders'
equity $ 29,048 27,706 27,011 26,324 25,579
Year Ended
------------------------
2007 2006
---------- ---------
($ in thousands except for share data)
EARNINGS
Net interest income $ 14,171 12,189
Provision for loan loss $ 1,162 1,196
NonInterest income $ 1,729 1,773
NonInterest expense $ 9,927 8,381
Net income $ 3,024 2,811
Basic earnings per share $ 0.92 0.86
Diluted earnings
per share $ 0.89 0.83
Average shares outstanding 3,280,315 3,265,557
Average diluted shares outstanding 3,402,711 3,383,070
PERFORMANCE RATIOS
Return on average assets * 0.67% 0.73%
Return on average common equity * 10.99% 11.63%
Net interest margin (fully-tax
equivalent) * 3.30% 3.30%
Efficiency ratio 62.00% 59.48%
# full-time equivalent employees - period
end 89 69
CAPITAL
Equity to ending assets 5.93% 6.30%
Tier 1 leverage capital ratio n/a 8.76%
Tier 1 risk-based capital ratio n/a 9.97%
Total risk-based capital ratio n/a 11.45%
Book value per share $ 8.94 7.94
ASSET QUALITY
Net charge-offs $ 528 508
Net charge-offs to average loans * 0.15% 0.18%
Allowance for loan losses $ 4,532 3,898
Allowance for loan losses to loans
held invst. 1.13% 1.23%
Nonperforming loans $ 3,538 2,388
Restructured loans $ 0 45
Other real estate owned $ 1,001 0
Nonperforming loans to loans held for
investment 0.88% 0.77%
Nonperforming assets to total assets 0.91% 0.59%
END OF PERIOD BALANCES
Total assets $ 500,116 411,592
Total earning assets $ 474,145 390,644
Total loans held for investment $ 400,784 315,732
Total deposits $ 418,573 360,415
Stockholders' equity $ 29,640 25,929
AVERAGE BALANCES
Total assets $ 451,190 384,252
Total earning assets $ 431,559 369,298
Total loans $ 358,575 286,644
Total interest-bearing deposits $ 361,799 300,897
Stockholders' equity $ 27,522 24,165
* annualized for all periods presented
All per share information has been presented or restated
to reflect the effect of the six-for-five stock split
in the second quarter of 2007.
CONTACT: Carolina Bank Holdings, Inc.
Robert T. Braswell, President and CEO
336-286-8761
b.braswell@carolinabank.com
