Carolina Bank (CLBH) 8-K Carolina Bank Holdings, Inc. Announces Quarterly

Exhibit 99.1

Press Release Source: Carolina Bank Holdings, Inc.

Carolina Bank Holdings, Inc. Announces Quarterly

Earnings Increase

Friday July 22, 4:16 pm ET

GREENSBORO, N.C., July 22 /PRNewswire-FirstCall/ — Carolina Bank Holdings, Inc., (Nasdaq:CLBH -News) has announced a 16% increase in net earnings, to $402,000, comparing the quarter ending June 30, 2005 with the same quarter of 2004. For the first half of 2005, net earnings increased 32% over the first half of 2004, to $934,000. Basic and diluted earnings per share increased to $0.18 and $0.17 per share in the second quarter of 2005, a 20% and 13% increase, respectively, from the same quarter in 2004.

Robert T. Braswell, President and CEO, commented on the quarterly performance results by saying, “Once again we are pleased to report our company’s successful quarterly performance. Our company recorded a 32% increase in total assets to $324.5 million as compared to a year earlier, June 30, 2004. Total loans, net of reserves, increased 19 % to $229.0 million during this same time. Total deposits increased 34% to $270.2 million for the period ending June 30, 2005 compared to June 30, 2004.

“During the quarter, we experienced an increase in non-performing loans, which, in turn, caused us to increase our loan loss reserves. This conforms to the company’s standard practice of establishing loan loss reserves based on the risk associated with different types of loans and known and expected losses in the portfolio. The company has action plans in place to minimize loss potential for all non-performing loans which involve either rehabilitating or liquidating the credit. It is important to note that absent the necessity of an increase in loan loss reserves, the company’s earnings would have been all the greater,” Braswell stated.

During the past quarter, the company announced plans to enter the High Point market. Braswell is pleased about prospects for the new office, saying “High Point is a growing market for us, so we are looking forward to the completion of our new office there. We hope to have our new office fully functional by the summer of 2006.” The bank expects to finalize acquisition of property and commence construction very soon. The new location is in the Deep River Shopping Center, a site on Wendover Avenue midway between Greensboro and High Point.

The company operates Carolina Bank as a wholly owned subsidiary. The bank has three branches in Greensboro and one in Asheboro, N.C. Further information is available on the bank’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. Please see the attached table, “Selected Financial Information.” It is an integral part of this communication.

CAROLINA BANK HOLDINGS, INC.

Selected Financial Information

	2005
(in thousands, except per share)	Second Quarter			First Quarter
OPERATING INCOME SUMMARY
Interest income	$	4,365		$	4,176
Interest expense		1,960			1,765
Net interest income		2,405			2,411
Provision for loan losses		450			280
Non-interest inc. bfr securities/REO inc.		310			304
Securities/REO gains (losses), net		6			4
Non-interest expenses		1,654			1,634
Income before income taxes		617			805
Income taxes		215			273
Net income	$	402		$	532
PER COMMON SHARE *
Basic	$	0.18		$	0.24
Diluted		0.17			0.23
Book Value (on outstanding shares)		9.68			9.47
ASSET QUALITY
Allowance for loan losses	$	3,196		$	3,076
Loans on nonaccrual		4,410			3,039
Repossessed assets		652			691
Net loan chargeoffs (recoveries)		330			12
Allowance for loan losses to loans		1.38	%		1.36	%
Nonaccrual loans + repossessions to assets		1.56	%		1.19	%
AVERAGE BALANCES
Loans	$	234,975		$	228,085
Earning assets		304,047			302,690
Total assets		317,208			315,891
AT PERIOD END
Loans before allowance	$	232,180		$	225,793
Total assets		324,524			313,498
Deposits		270,229			259,922
Stockholders’ Equity		21,949			21,471
RATIOS ANNUALIZED
Net yield - avg interest earning assets		3.16	%		3.19	%
Return on average assets		0.51	%		0.67	%
Net charge-offs (annl) to average loans		0.56	%		0.02	%
Efficiency ratio (excl security/REO trans.)		0.61			0.60

Note: All quarterly information is unaudited.

* All Per 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

CAROLINA BANK HOLDINGS, INC.

Selected Financial Information

	2004
(in thousands, except per share)	Fourth Quarter			Third Quarter			Second Quarter
OPERATING INCOME SUMMARY
Interest income	$	3,842		$	3,338		$	2,855
Interest expense		1,478			1,130			960
Net interest income		2,364			2,208			1,895
Provision for loan losses		220			236			133
Non-interest inc. bfr securities/REO inc.		331			286			351
Securities/REO gains (losses), net		—			—			—
Non-interest expenses		1,749			1,561			1,589
Income before income taxes		726			697			524
Income taxes		249			246			176
Net income	$	477		$	451		$	348
PER COMMON SHARE *
Basic	$	0.21		$	0.20		$	0.15
Diluted		0.21			0.20			0.15
Book Value (on outstanding shares)		9.37			9.23			8.83
ASSET QUALITY
Allowance for loan losses	$	2,808		$	2,628		$	2,436
Loans on nonaccrual		882			772			327
Repossessed assets		857			891			714
Net loan chargeoffs (recoveries)		40			44			13
Allowance for loan losses to loans		1.26	%		1.26	%		1.25	%
Nonaccrual loans + repossessions to assets		0.56	%		0.62	%		0.42	%
AVERAGE BALANCES
Loans	$	217,712		$	203,085		$	189,452
Earning assets		278,410			246,103			229,555
Total assets		292,474			259,840			242,497
AT PERIOD END
Loans before allowance	$	223,470		$	208,653		$	194,141
Total assets		311,537			267,237			245,002
Deposits		258,155			219,337			200,932
Stockholders’ Equity		21,110			20,779			19,876
RATIOS ANNUALIZED
Net yield - avg interest earning assets		3.40	%		3.59	%		3.30	%
Return on average assets		0.65	%		0.69	%		0.57	%
Net charge-offs (annl) to average loans		0.07	%		0.09	%		0.03	%
Efficiency ratio (excl security/REO trans.)		0.65			0.63			0.71

Note: All quarterly information is unaudited.

* All Per 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

CAROLINA BANK HOLDINGS, INC.

Selected Financial Information

	Years Ended
(in thousands, except per share)	2004			2003			2002
OPERATING INCOME SUMMARY
Interest income	$	12,775		$	9,844		$	9,085
Interest expense		4,460			3,583			4,151
Net interest income		8,315			6,261			4,934
Provision for loan losses		769			692			685
Non-interest inc. bfr securities/REO inc.		1,263			1,454			911
Securities/REO gains (losses), net		—			(100	)		(9	)
Non-interest expenses		6,336			5,199			4,238
Income before income taxes		2,473			1,724			913
Income taxes		840			574			312
Net income	$	1,633		$	1,150		$	601
PER COMMON SHARE *
Basic	$	0.73		$	0.52		$	0.47
Diluted		0.71			0.51			0.46
Book Value (on outstanding shares)		9.37			8.70			8.28
ASSET QUALITY
Allowance for loan losses	$	2,808		$	2,150		$	1,661
Loans on nonaccrual		882			228			37
Repossessed assets		857			126			648
Net loan chargeoffs (recoveries)		111			204			393
Allowance for loan losses to loans		1.26	%		1.25	%		1.25	%
Nonaccrual loans + repossessions to assets		0.56	%		0.16	%		0.36	%
AVERAGE BALANCES
Loans	$	197,384		$	151,733		$	121,446
Earning assets		242,095			189,513			155,420
Total assets		255,374			201,550			163,337
AT PERIOD END
Loans before allowance	$	223,470		$	172,575		$	133,045
Total assets		311,537			227,011			189,871
Deposits		258,155			183,569			154,878
Stockholders’ Equity		21,120			19,564			18,344
RATIOS ANNUALIZED
Net yield - avg interest earning assets		3.43	%		3.30	%		3.17	%
Return on average assets		0.64	%		0.57	%		0.37	%
Net charge-offs (annl) to average loans		0.06	%		0.13	%		0.32	%
Efficiency ratio (excl security/REO trans.)		0.66			0.67			0.73

Note: All quarterly information is unaudited.

* All Per 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

Source: Carolina Bank Holdings, Inc.