Carolina Bank (CLBH) 8-K Carolina Bank Holdings Announces 25th Consecutive Quarterly Profit

Exhibit 99.1

For Immediate Release

July 13, 2004

Carolina Bank Holdings Announces 25^th Consecutive Quarterly Profit

(GREENSBORO, NC) Carolina Bank Holdings, Inc. (NASDAQ Small Cap Symbol “CLBH”) announced that it had posted its twenty-fifth consecutive quarterly profit for the period ending June 30, 2004. The performance record was announced by Robert T. Braswell, President and CEO. “The company continues to achieve record growth and profitability. We opened November 25, 1996. After just 15 months of operations, the company broke even; we have been profitable every on of the 71 months since that time,” he stated.

The driver of the company’s success continues to be the performance of its wholly owned subsidiary, Carolina Bank, headquartered in Greensboro, NC. The bank continues to experience solid, profitable growth. Comparing the quarter ending June 30, 2004, with the same period one year ago, the bank’s assets have increased 22 percent to $245 million, deposits increased 21 percent to $200.9 million and net loans increased 30 percent, to $191.7 million. Similarly, comparing the quarter ending June 30, 2004, with the same period one year ago, the bank’s net income has increased 39 percent, to $347,963 and Diluted Earnings per Share increased 36 percent to $0.15, adjusted for the 20 percent stock dividend, paid in April 2004.

“Our bank’s profitability is not at the mercy of the current weakness in the mortgage market, Braswell continued. “At our bank, mortgage fee income is a compliment to our banking operations, not a key to our success. Furthermore, fully 80 percent of our loans are tied to a floating rate index, principally the prime rate. Therefore, the recent increase in the prime rate should have a positive, not negative, impact on our performance because the income on loans will increase faster than the cost of our deposits.”

The company has recently strengthened its team of bankers with three new employee additions. Mr. David Griswold, Vice President has joined the Asheboro Office as a Commercial Lender. Ms. Pam Sparks now serves as Vice President and Branch Manager of the Friendly Office. Mr. Ross Geller will serve as Vice President and Branch Manager of the Jefferson Village Office.

Earlier in the year, Carolina Bank introduced added value enhancements to its three primary personal checking accounts, including discounts on shopping, entertainment, hearing, vision, and pharmacy along with $10,000 accidental death insurance during the past month. The enhancements are available to bank customers at no charge. The bank offers SmartPay, an Internet Bill Payment service free to qualified Carolina Bank customers.

Carolina Bank has three branches in Greensboro and one in Asheboro, N.C. Further information is available on the bank’s website,www.carolinabank.com

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.

# # #

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

It is an integral part of this communication.

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, INC.

Selected Financial Information

	2004						2003									Years Ended
(in thousands, except per share)	Second Quarter			First Quarter			Fourth Quarter			Third Quarter			Second Quarter			2003			2002			2001
OPERATING INCOME SUMMARY
Interest income	$	2,855		$	2,741		$	2,682		$	2,404		$	2,417		$	9,844		$	9,085		$	9,016
Interest expense		960			893			875			853			878			3,584			4,152			5,397
Net interest income		1,895			1,848			1,807			1,551			1,539			6,260			4,933			3,619
Provision for loan losses		133			180			225			95			135			692			685			391
Non-interest inc. bfr securities/REO inc.		351			295			319			432			326			1,454			911			557
Securities/REO gains (losses), net		—			—			(37	)		(25	)		(85	)		(100	)		20			129
Non-interest expenses		1,589			1,437			1,339			1,369			1,268			5,198			4,266			3,386
Income before income taxes		524			526			525			494			377			1,724			913			528
Income taxes		176			169			171			178			127			574			312			126
Net income	$	348		$	357		$	354		$	316		$	250		$	1,150		$	601		$	402
PER COMMON SHARE *
Basic	$	0.15		$	0.16		$	0.16		$	0.14		$	0.11		$	0.52		$	0.47		$	0.32
Diluted		0.15			0.15			0.15			0.14			0.11			0.51			0.46			0.32
Book Value (on outstanding shares)		8.83			8.92			8.70			8.49			8.47			8.70			8.28			7.74
ASSET QUALITY
Allowance for loan losses	$	2,436		$	2,316		$	2,150		$	2,023		$	1,942		$	2,150		$	1,661		$	1,369
Loans on nonaccrual		327			322			228			900			376			228			37			443
Repossesed assets		714			126			126			216			114			126			648			—
Net loan chargeoffs (recoveries)		13			14			99			14			97			204			393			209
Allowance for loan losses to loans		1.25	%		1.25	%		1.25	%		1.30	%		1.30	%		1.25	%		1.25	%		1.26	%
Nonaccrual lns+repossessions to assets		0.42	%		0.19	%		0.16	%		0.53	%		0.24	%		0.16	%		0.36	%		0.29	%
AVERAGE BALANCES
Loans	$	189,452		$	179,288		$	164,333		$	152,488		$	147,928		$	151,155		$	121,446		$	95,602
Earning assets		222,737			214,310			198,143			191,784			187,570			189,766			155,420			122,273
Total assets		242,497			226,685			211,955			203,986			196,909			201,354			163,337			129,022
AT PERIOD END
Loans before allowance	$	194,141		$	185,994		$	172,575		$	155,937		$	149,892		$	172,575		$	133,045		$	108,882
Total assets		245,002			239,302			226,911			212,126			201,375			226,911			189,871			151,515
Deposits		200,932			197,514			183,569			168,706			165,868			183,569			154,878			124,654
Stockholders' Equity		19,876			20,051			19,563			19,057			18,937			19,563			18,344			9,590
RATIOS ANNUALIZED
Net yield—avg interest earning assets		3.40	%		3.45	%		3.65	%		3.23	%		3.28	%		3.30	%		3.17	%		2.96	%
Return on average assets		0.57	%		0.63	%		0.67	%		0.62	%		0.51	%		0.57	%		0.37	%		0.31	%
Net charge-offs to average loans		0.03	%		0.03	%		0.24	%		0.04	%		0.26	%		0.13	%		0.32	%		0.22	%
Efficiency ratio (excl security/REO trans.)		0.71			0.67			0.63			0.69			0.68			0.67			0.73			0.81

Note: All quarterly information is unaudited.

* AllPer Common Share Information has been presented or restated to reflect the effect of the six-for-five stock split with a record date of April 20, 2004