Carolina Bank (CLBH) 8-K Carolina Bank Holdings announces third quarter results

EXHIBIT 99.1

PRESS RELEASE

FOR IMMEDIATE RELEASE

For additional information please contact:

Carolina Bank

Mr. Robert T. Braswell, President and CEO

P. O. Box 10209, Greensboro, North Carolina 27404

Telephone: 336-286-8740 – Email: b.braswell@carolinabank.com

Carolina Bank Holdings announces third quarter results

Greensboro, NC, October 14, 2003 – Robert T. Braswell, President and Chief Executive Officer of Carolina Bank Holdings, Inc (CLBH) announced operating results for the quarter ending September 30, 2003.

Commenting on the company’s performance Braswell stated, “In terms of total assets and net income, this was our best quarter ever. The company’s outstanding results were supported by continued strong loan and non-interest income growth. In addition, our Asheboro office made meaningful contributions to our growth in both loans and deposits, providing solid support of our decision to open an office in Randolph county.”

Comparing the quarter ending 9/30/02 to the quarter ending 9/30/03, total assets increased 24 percent to $ 212.1 million; net loans increased 21 percent to $153.9 million; and deposits increased 16 percent to $168.7. Net income for the third quarter 2003, before securities gains, increased 97 percent to $316,146.

In December 2002, the company issued 805,000 shares of new stock; prior to the end of the third quarter 2003, certain bank staff and former company board member redeemed company stock options. The effect of these events diluted earnings per share for the third quarter of 2003. Therefore, company earnings per share did not increase as significantly as did net income.

Carolina Bank Holdings, Inc had 1,041,410 shares outstanding at September 30, 2002 and 1,869,075 shares outstanding at September 30, 2003. Consequently, diluted earnings per share increased only six percent from the third quarter 2002 to the third quarter 2003. Earnings per share for the third quarter of 2003 was $.17 per share.

Carolina Bank Holdings, Inc. operates Carolina Bank, Greensboro, NC as a wholly owned subsidiary. The Bank has four branch offices, three in Greensboro at Friendly Shopping Center, Lawndale Drive and New Garden Road and one branch in Asheboro, North Carolina.

This press release contains forward-looking statements regarding future events. These statements are just 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.

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Please see the attached table, “Selected Financial Information.”

It is an integral part of this communication

CAROLINA BANK HOLDINGS, INC.

Selected Financial Information

	2003									2002						Years Ended
(in thousands, except per share)	Third Quarter			Second Quarter			First Quarter			Fourth Quarter			Third Quarter			2002			2001			2000
OPERATING INCOME SUMMARY
Interest income	$	2,404		$	2,417		$	2,341		$	2,376		$	2,319		$	9,085		$	9,016		$	8,002
Interest expense		853			878			977			1,021			1,054			4,152			5,397			4,464
Net interest income		1,551			1,539			1,364			1,355			1,265			4,933			3,619			3,538
Provision for loan losses		95			135			237			190			175			685			391			332
Non-interest inc. bfr securities/REO inc.		432			326			371			335			268			911			557			280
Securities/REO gains (losses), net		(25	)		(85	)		53			—			20			20			129			—
Non-interest expenses		1,369			1,268			1,222			1,169			1,079			4,266			3,386			2,642
Income before income taxes		494			377			329			331			299			913			528			844
Income taxes		178			127			99			91			125			312			126			302
Net income	$	316		$	250		$	230		$	240		$	174		$	601		$	402		$	542
PER COMMON SHARE
Basic	$	0.17		$	0.13		$	0.12		$	0.20		$	0.17		$	0.56		$	0.39		$	0.53
Diluted		0.17			0.13			0.12			0.20			0.16			0.55			0.39			0.53
Book Value (on outstanding shares)		10.19			10.16			10.05			9.93			9.88			9.93			9.29			8.88
ASSET QUALITY
Allowance for loan losses	$	2,023		$	1,942		$	1,904		$	1,661		$	1,626		$	1,661		$	1,369		$	1,187
Non-performing loans		899			376			1,384			37			395			37			443			254
Repossesed assets		216			114			199			648			478			648			—			—
Net loan chargeoffs (recoveries)		14			97			(6	)		155			80			393			209			51
Allowance for loan losses to loans		1.30	%		1.30	%		1.33	%		1.25	%		1.26	%		1.25	%		1.26	%		1.40	%
Non-performing assets to total assets		0.53	%		0.24	%		0.81	%		0.36	%		0.51	%		0.36	%		0.29	%		0.23	%
AVERAGE BALANCES
Loans	$	152,488		$	147,928		$	141,065		$	130,888		$	126,628		$	121,446		$	95,602		$	71,497
Earning assets		191,784			187,570			181,565			168,176			161,663			155,420			122,273			90,743
Total assets		203,986			196,909			192,565			176,790			169,685			163,337			129,022			95,350
AT PERIOD END
Loans before allowance	$	155,937		$	149,892		$	143,374		$	133,045		$	128,775		$	133,045		$	108,882		$	84,815
Total assets		212,126			201,375			194,931			189,871			170,935			189,871			151,515			112,498
Deposits		168,706			165,868			161,743			154,878			145,564			154,878			124,654			97,331
Stockholders’ Equity		19,057			18,937			18,549			18,344			10,287			18,344			9,590			9,168
RATIOS ANNUALIZED
Net yield—avg interest earning assets		3.23	%		3.28	%		3.00	%		3.22	%		3.13	%		3.17	%		2.96	%		3.90	%
Return on average assets		0.62	%		0.51	%		0.48	%		0.54	%		0.41	%		0.37	%		0.31	%		0.57	%
Net charge-offs to average loans		0.04	%		0.26	%		-0.02	%		0.47	%		0.25	%		0.32	%		0.22	%		0.07	%
Efficiency ratio (excl security/REO trans.)		0.69			0.68			0.70			0.69			0.70			0.73			0.81			0.69

Note: Quarterly information is unaudited.