EXHIBIT 99.1
Carolina Bank Holdings, Inc. Announces Improved Asset Quality and Strong Growth
GREENSBORO, N.C., July 16, 2008 (PRIME NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) announced lower non-performing assets of $2.1 million, or 0.37% of assets, at June 30, 2008, a significant drop from $4.3 million, or 0.82% of assets, at March 31, 2008. Non-performing assets were 0.48% of assets at June 30, 2007. Annualized net loan charge-offs to average loans held for investment were 0.13% and 0.09% for the first six months of 2008 and 2007, respectively. Robert T. Braswell, President and CEO, commented, "It is refreshing to see our asset quality improving in this difficult banking environment. These results speak volumes for our team of experienced bankers and for the diligent efforts of our credit administration staff. We are also fortunate to be operating in the Piedmont Triad of North Carolina which has experienced a resurgence of new businesses activity."
The Company experienced strong growth as assets, loans, and deposits increased 8.2%, 9.8%, and 5.2%, respectively, during the second quarter of 2008. Assets were $567.1 million at June 30, 2008 compared to $442.0 million at June 30, 2007, an increase of 28.3%. Loans held for investment totaled $456.8 million at June 30, 3008, an increase of 30.6% over the same quarter of 2007. Braswell stated that, "We continue to see good growth in our markets as evidenced by the increase of over $40 million in our loans held for investment during the latest quarter. Strong, quality, asset growth was the primary driver of our recent decision to raise capital through a stock offering. Due to the unreceptive equities markets for secondary bank issues, we have suspended our secondary stock offering, and may continue with the offering in some form in the future. Due to the accounting rules related to suspending an equity offering, we expensed approximately $126,000 in offering expenses in the second quarter of 2008. To suppleme nt our capital, in addition to the potential secondary stock offering, we are looking at other capital alternatives, including subordinated debt and trust preferred securities, which we believe will be available to us under reasonable conditions."
Net income for the second quarter of 2008 was $608,000, or $0.18 per diluted share, compared to $837,000, or $0.25 per diluted share, for the second quarter of 2007. The provision for loan losses was $620,000 in the second quarter of 2008, an increase of $405,000 from the year ago second quarter due to strong loan growth. Net interest income increased slightly to $3.7 million in the second quarter of 2008 from the year ago quarter and was up 4.1% from the first quarter of 2008. The net interest margin (fully-taxable equivalent) decreased to 2.91% in the latest quarter from 2.94% in the first quarter of 2008 and 3.53% in the second quarter of 2007. Our net interest margin declined in 2008 because the prime rate decreased by 325 basis points over the past ten months, combined with our asset sensitivity, and due to a very competitive market for deposits.
Non-interest income increased to $1.4 million in the second quarter of 2008, up $1.1 million from the second quarter of 2007. Our new wholesale mortgage division was responsible for most of the increase as mortgage banking income was up $768,000 from a year ago. A gain of $227,000 from the sale of stock in a correspondent bank was also recorded in the second quarter of 2008.
Non-interest expense increased to $3.6 million in the second quarter of 2008 from $2.5 million in the second quarter of 2007. Excluding $437,000 of new expenses from our wholesale mortgage division, $126,000 in expenses related to the secondary offering, and $120,000 in additional expenses related to increased FDIC premiums, non-interest expense increased 17.1% in the second quarter of 2008 from the second quarter of 2007. The added expenses in 2008 supported our growth and included a new office in Burlington which opened in the third quarter of 2007 and a loan production office in Winston-Salem which opened in the first quarter of 2008.
Net income for the six months ended June 30, 2008 was $1.3 million, or $0.38 per diluted share, compared to $1.5 million, or $0.45 per diluted share, for the same period in 2007.
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, Randolph, and Forsyth. The bank has six full-service banking locations, three in Greensboro, one in Asheboro, one in High Point, and one in Burlington and a loan production office in Winston-Salem. The bank is building a new corporate headquarters in downtown Greensboro, with expected occupancy in the third quarter of 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 actual events or results to differ materially. These risks and uncertainties include risks of supporting and managing our growth, substantial changes in financial markets, changes in interest rates, changes in real estate values and the real estate market, loss of deposits and loan demand to other financial institutions, and regulatory changes. 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
At June 30, 2008 and 2007 and December 31, 2007
(unaudited)
June 30, Dec. 31,
2008 2007 2007
-------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 7,033 $ 4,306 $ 4,967
Short-term investments and
interest-earning deposits 346 39 55
Federal funds sold -- 2,113 --
-------------------- ---------
Total cash and cash equivalents 7,379 6,458 5,022
Securities available for sale, at
fair value 58,853 66,429 59,304
Securities held-to-maturity, at
amortized cost 1,199 3,396 3,133
Loans held for sale 15,630 -- 11,869
Loans 456,841 349,782 400,784
Allowance for loan losses (5,102) (4,225) (4,532)
-------------------- ---------
Net loans 451,739 345,557 408,121
Premises and equipment, net 17,579 10,645 13,792
Other assets 14,740 9,490 10,744
-------------------- ---------
Total assets $ 567,119 $ 441,975 $ 500,116
==================== =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 30,302 $ 31,191 $ 30,491
Interest-bearing 430,038 355,917 388,082
-------------------- ---------
Total deposits 460,340 387,108 418,573
Short-term borrowings 11,616 3,093 6,102
Federal Home Loan Bank advances 50,207 11,595 31,581
Junior subordinated debentures 10,310 10,310 10,310
Other liabilities 3,923 2,761 3,910
-------------------- ---------
Total liabilities 536,396 414,867 470,476
STOCKHOLDERS' EQUITY
Common stock and paid-in-capital,
no par value, 20,000,000 shares
authorized; issued and
outstanding - 3,342,966 shares
at June 30, 2008, 3,266,896 shares
at June 30, 2007, and 3,315,157
shares at December 31, 2007 3,343 3,267 3,315
Additional paid-in capital 15,515 15,053 15,379
Retained earnings 12,017 9,389 10,875
Stock in director rabbi trust (644) (464) (524)
Directors deferred fees obligation 644 464 524
Accumulated other comprehensive
income (loss) (152) (601) 71
-------------------- ---------
Total stockholders' equity 30,723 27,108 29,640
-------------------- ---------
Total liabilities and
stockholders' equity $ 567,119 $ 441,975 $ 500,116
==================== =========
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three and six months ended June 30, 2008 and 2007
(unaudited)
For the Three Months For the Six Months
Ended Ended
June 30, June 30,
---------------------- ----------------------
2008 2007 2008 2007
------------------- ---------------------- ----------------------
(in thousands, except per share data)
Interest income:
Loans $ 6,947 $ 7,323 $ 14,265 $ 14,034
Investment
securities
- taxable 684 804 1,424 1,639
Investment
securities
- non taxable 89 19 171 19
Interest from
federal funds sold 8 66 20 125
Other interest
income -- 1 1 7
---------------------- ----------------------
Total interest
income 7,728 8,213 15,881 15,824
Interest expense:
Deposits 3,614 4,166 7,687 8,081
FHLB advances and
other 277 151 629 362
Junior
subordinated
debentures 126 191 289 379
---------------------- ----------------------
Total interest
expense 4,017 4,508 8,605 8,822
---------------------- ----------------------
Net interest income 3,711 3,705 7,276 7,002
Provision for loan
losses 620 215 855 470
---------------------- ----------------------
Net interest income
after provision for
loan losses 3,091 3,490 6,421 6,532
Noninterest income:
Service charges 209 181 406 353
Mortgage banking
income 827 59 1,402 124
Securities gains
(losses), net 227 -- 227 --
Other 158 100 243 221
---------------------- ----------------------
Total noninterest
income 1,421 340 2,278 698
Noninterest expense:
Salaries and
benefits 1,926 1,264 3,681 2,563
Occupancy and
equipment 420 303 799 607
Professional fees 394 184 683 371
Outside data
processing 164 136 338 300
Advertising and
promotion 183 126 298 242
Stationery, printing
and supplies 159 110 267 226
Impairment charge -- 100 -- 100
Other 354 268 627 364
---------------------- ----------------------
Total noninterest
expense 3,600 2,491 6,693 4,773
---------------------- ----------------------
Income before income
taxes 912 1,339 2,006 2,457
Income taxes expense 304 502 696 919
---------------------- ----------------------
Net income $ 608 $ 837 $ 1,310 $ 1,538
====================== ======================
Basic earnings per
common share $ 0.18 $ 0.26 $ 0.39 $ 0.47
Diluted earnings per
common share $ 0.18 $ 0.25 $ 0.38 $ 0.45
Average common
shares
outstanding 3,342,966 3,266,866 3,342,014 3,266,866
Average common
shares and dilutive
potential common
shares
outstanding 3,397,474 3,408,938 3,406,252 3,410,626
Total Shares
outstanding at end
of period 3,342,966 3,266,896 3,342,966 3,266,896
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
Second Quarter 2008
(unaudited)
Quarterly
--------------------------------------------------
($ in thousands
except for 2nd Qtr. 1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr.
share data) 2008 2008 2007 2007 2007
--------------------------------------------------
EARNINGS
Net interest
income $ 3,711 3,565 3,542 3,627 3,705
Provision for
loan loss $ 620 235 420 272 215
NonInterest
income $ 1,421 857 645 386 340
NonInterest
expense $ 3,600 3,093 2,695 2,459 2,491
Net income $ 608 702 686 800 837
Basic
earnings
per share $ 0.18 0.21 0.21 0.24 0.26
Diluted
earnings
per share $ 0.18 0.21 0.20 0.24 0.25
Average
shares
outstanding 3,342,966 3,341,061 3,313,724 3,273,806 3,266,866
Average
diluted
shares
outstanding 3,397,474 3,415,029 3,394,797 3,392,116 3,408,938
PERFORMANCE
RATIOS
Return on
average
assets * 0.45% 0.55% 0.57% 0.70% 0.76%
Return on
average
common
equity * 7.90% 9.29% 9.45% 11.55% 12.39%
Net interest
margin
(fully-tax
equivalent) * 2.91% 2.94% 3.08% 3.31% 3.53%
Efficiency
ratio 69.63% 69.40% 63.89% 61.00% 61.58%
# full-time
equivalent
employees -
period end 101 96 89 86 77
CAPITAL
Equity to
ending
assets 5.42% 5.82% 5.93% 6.08% 6.13%
Tier 1
leverage
capital
ratio n/a 7.84% 8.14% n/a n/a
Tier 1 risk-
based
capital
ratio n/a 8.72% 8.94% n/a n/a
Total risk-
based
capital
ratio n/a 9.74% 10.00% n/a n/a
Book value
per share $ 9.19 9.13 8.94 8.68 8.30
ASSET QUALITY
Net charge-
offs $ 218 67 364 21 2
Net charge-
offs to
average
loans * 0.20% 0.06% 0.36% 0.02% 0.00%
Allowance for
loan losses $ 5,102 4,700 4,532 4,476 4,225
Allowance for
loan losses
to loans
held invst 1.12% 1.13% 1.13% 1.19% 1.21%
Nonperforming
loans $ 1,601 3,715 3,538 4,443 2,139
Restructured
loans $ 0 0 0 0 0
Other real
estate owned $ 511 592 1,001 190 0
Nonperforming
loans to
loans held
for
investment 0.35% 0.89% 0.88% 1.19% 0.61%
Nonperforming
assets to
total assets 0.37% 0.82% 0.91% 0.99% 0.48%
END OF PERIOD
BALANCES
Total assets $ 567,119 524,203 500,116 468,327 441,975
Total earning
assets $ 532,869 494,359 474,145 444,498 421,759
Total loans
held for
investment $ 456,841 416,121 400,784 374,602 349,782
Total
deposits $ 460,340 437,699 418,573 409,094 387,108
Stockholders'
equity $ 30,723 30,533 29,640 28,487 27,108
AVERAGE
BALANCES
Total assets $ 544,808 513,580 484,039 458,152 437,731
Total earning
assets $ 516,152 490,678 464,675 440,045 419,834
Total loans
held for
investment $ 436,610 412,521 399,223 363,801 345,115
Total
interest-
bearing
deposits $ 411,423 401,975 379,562 371,395 355,810
Stockholders'
equity $ 30,869 30,319 29,048 27,706 27,011
Year Ended
------------------------
($ in thousands except for share data) 2007 2006
---------- ----------
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 * 10.98% 11.63%
Net interest margin (fully-tax
equivalent) * 3.30% 3.30%
Efficiency ratio 62.20% 60.03%
# full-time equivalent employees - period
end 89 69
CAPITAL
Equity to ending assets 5.93% 6.30%
Tier 1 leverage capital ratio 8.14% 8.76%
Tier 1 risk-based capital ratio 8.94% 9.97%
Total risk-based capital ratio 10.00% 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 $ 451,130 384,252
Total earning assets $ 431,926 369,298
Total loans held for investment $ 358,575 286,644
Total interest-bearing deposits $ 361,800 300,897
Stockholders' equity $ 27,541 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 2007.
CONTACT: Carolina Bank Holdings, Inc.
Robert T. Braswell, President and CEO
(336) 286-8761
b.braswell@carolinabank.com
