GREENSBORO, N.C., July 19, 2006 (PRIMEZONE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported a record second quarter; net income was $678,000, an increase of 68.7 percent over the $402,000 reported for the second quarter of 2005. Diluted earnings per share were $0.24 compared with $0.14 for the prior-year period, an increase of 71.4 percent. Per share results were restated to reflect the impact of the six-for-five stock split in the fourth quarter of 2005. Continued growth in earning assets and improved asset quality contributed to the strong quarter.
For the first six months of 2006, net income was $1,281,000 compared with $934,000 for the comparable 2005 period, an increase of 37.2 percent. Diluted earnings per share increased 39.4 percent over the 2005 period, from $0.33 to $0.46.
Robert T. Braswell, President and CEO of Carolina Bank Holdings, commented, "Performance this quarter and for the first half of 2006 is a reflection of our company's exceptional growth strategies and our commitment to performance excellence. We continue to benefit from robust growth in both high quality loans and low-cost deposits, and we have worked diligently to return non-performing assets to a level more in keeping with our historical experience."
Total revenue, consisting of net interest income and non-interest income, increased $705,000, or 25.9 percent, to $3.4 million for the second quarter of 2006 compared with $2.7 million for the second quarter of 2005. Net interest income grew $669,000, or 27.8 percent, to $3.1 million compared with $2.4 million for the year-ago quarter, reflecting an 18.7 percent increase in average earning assets and a 24 basis point improvement in the net interest margin to 3.39 percent. Mr. Braswell noted that the growth in earning assets and improvement in net interest margin over several quarters is a credit to the quality of our lenders and branch personnel who have successfully applied our customer-focused business model to build relationships."
Non-interest income for the second quarter increased $36,000, or 11.4 percent, to $352,000, primarily as the result of a $29,000, or 37.2 percent, increase in mortgage banking income.
Non-interest expense totaled $2.0 million for the second quarter of 2006, an increase of 22.8 percent over the $1.7 million reported for the second quarter of 2005. The increase reflects corporate growth over the past twelve months, including the third quarter 2005 opening of a loan production office in Burlington and ongoing construction of the High Point office, which is scheduled for completion in the fourth quarter of this year. The efficiency ratio for the second quarter of 2006 was 59.28 percent compared with 60.52 percent for the previous quarter, and 60.79 percent for the prior-year period.
Assets at June 31, 2006 totaled $390.0 million compared with $324.5 million twelve months ago, an increase of 20.2 percent. Loans held for investment grew $48.2 million, or 20.8 percent, during the past twelve months, reaching $280.4 million at period-end. Commercial real estate loans accounted for the majority of this growth; they increased $167.0 million, or 21.7 percent, over the past twelve months and now account for 59.4 percent of the loan portfolio.
Deposits increased $62.9 million, or 23.3 percent over the past year, reaching $333.2 million at June 30, 2006. Transaction and savings accounts (DDA, NOW, MMDA and Savings) grew $48.9 million, or 37.9 percent, over the past twelve months and now account for $178.0 million or 53.4 percent of total deposits. This compares with $129.0 million or 47.8 percent of deposits twelve months ago.
Asset quality has markedly improved. Mr. Braswell added, "Our efforts to reduce the level of problem loans is meeting with success. Since March 31, 2006, we reduced nonperforming assets by nearly $2 million, and by an additional $755,000 since the close of second quarter. We anticipate further reductions near-term." Nonperforming assets were $3.6 million or 0.92 percent of assets at June 30, 2006 compared with $5.6 million or 1.46 percent of assets at March 31, 2006, and $5.1 million or 1.57 percent of assets at June 30, 2005. Net charge-offs for the second quarter of 2006 were 0.74 percent compared with zero for the previous quarter, and 0.56 percent of average loans for the prior-year second quarter. The allowance for loan losses was 1.20 percent of total loans and leases at June 30, 2006, reflecting the improvement in asset quality
Shareholders' equity totaled $23.8 million at June 30, 2006, up $1.8 million from twelve months ago. Shares outstanding at March 31, 2006 were 2,721,384. Mr. Braswell concluded, "We are optimistic about opportunities for continued growth and improved performance in our markets. The Piedmont Triad is experiencing a rebound, and Carolina Bank continues to benefit."
About the Company
Carolina Bank Holdings, Inc., the holding company for Carolina Bank, operates five full- service branches in North Carolina: three in Greensboro, one in Asheboro, and a newly established office in Burlington. Further information is available on the Company's web site: www.carolinabank.com.
The Carolina Bank Holdings, Inc. logo is available at http://www.primezone.com/newsroom/prs/?pkgid=2257
Forward-Looking Statements
This press release contains forward-looking statements regarding future events. These statements are only predictions and are subject to risks and uncertainties that could cause the actual events or results to differ materially. These risks and uncertainties include risks of managing our growth, substantial changes in financial markets, regulatory changes, changes in interest rates, loss of deposits and loan demand to other financial institutions, and changes in real estate values and the real estate market. Additional information concerning factors that could cause actual results to be materially different from those in the forward-looking statements is contained in the Company's filings with the Securities and Exchange Commission.
Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
Second Quarter 2006
(unaudited)
Quarterly
-----------------------------------------------------
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr
2006 2006 2005 2005 2005
-----------------------------------------------------
($ in thousands except for share data)
EARNINGS
Net interest
income $ 3,074 2,864 2,836 2,576 2,405
Provision for
loan loss $ 285 370 331 245 450
NonInterest
income $ 352 426 327 279 316
NonInterest
expense $ 2,031 1,991 1,963 1,695 1,654
Net income $ 678 603 555 548 402
Basic earnings
per share $ 0.25 0.22 0.20 0.20 0.15
Diluted
earnings per
share $ 0.24 0.22 0.20 0.20 0.14
Average shares
outstanding 2,720,584 2,720,496 2,720,491 2,720,336 2,719,750
Average
diluted
shares
outstanding 2,809,911 2,804,564 2,794,686 2,796,181 2,797,046
PERFORMANCE
RATIOS
Return on
average
assets(a) 0.71% 0.66% 0.64% 0.68% 0.51%
Return on
average common
equity(a) 11.53% 10.46% 9.85% 9.85% 7.42%
Net interest
margin (fully-
tax
equivalent)(a) 3.40% 3.26% 3.41% 3.32% 3.15%
Efficiency
ratio 59.28% 60.52% 62.06% 59.37% 60.79%
No. full-time
equivalent
employees
- period end 62 59 59 57 53
CAPITAL
Equity to
ending assets 6.10% 6.14% 6.24% 6.78% 6.76%
Tier 1 leverage
capital ratio n/a 8.65% 8.98% 9.39% 9.32%
Tier 1 risk-
based capital
ratio n/a 10.17% 10.36% 11.17% 10.97%
Total risk-
based capital
ratio n/a 11.32% 12.17% 13.14% 13.11%
Book value per
share $ 8.74 8.57 8.38 8.25 8.06
ASSET QUALITY
Net charge-
offs $ 513 (2) 65 497 330
Net charge-
offs to
average
loans(a) 0.74% 0.00% 0.10% 0.83% 0.56%
Allowance for
loan losses $ 3,354 3,582 3,210 2,944 3,196
Allowance for
loan losses
to total loans 1.20% 1.30% 1.22% 1.23% 1.38%
Nonperforming
loans $ 3,140 5,430 2,834 3,252 4,410
Restructured
loans $ 0 0 2,474 2,574 48
Other real
estate owned $ 453 111 111 37 652
Nonperforming
loans to total
loans 1.12% 1.97% 2.02% 2.43% 1.92%
Nonperforming
assets to
total assets 0.92% 1.46% 1.48% 1.77% 1.57%
END OF PERIOD
BALANCES
Total assets $ 389,978 379,692 365,170 331,359 324,524
Total earning
assets $ 367,246 357,423 344,522 309,913 300,386
Total loans $ 280,366 275,866 262,609 239,294 232,180
Total deposits $ 333,148 323,399 306,334 276,893 270,229
Stockholders'
equity $ 23,795 23,313 22,787 22,453 21,949
AVERAGE BALANCES
Total assets $ 383,008 366,335 346,434 323,461 317,878
Total earning
assets $ 361,521 351,541 332,575 310,297 305,297
Total loans $ 277,142 274,728 256,904 239,340 235,144
Total interest-
bearing
deposits $ 296,385 281,328 262,342 243,509 240,503
Stockholders'
equity $ 23,526 23,070 22,532 22,265 21,676
Year-To-Date
----------------------
2006 2005
--------- ---------
EARNINGS
Net interest income 5,938 4,916
Provision for loan loss 655 730
NonInterest income 778 624
NonInterest expense 4,022 3,288
Net income 1,281 934
Basic earnings per share 0.47 0.34
Diluted earnings per share 0.46 0.33
Average shares outstanding 2,720,540 2,713,319
Average diluted shares outstanding 2,809,867 2,796,341
PERFORMANCE RATIOS
Return on average assets(a) 0.68% 0.59%
Return on average common equity(a) 9.29% 8.71%
Net interest margin (fully-tax
equivalent)(a) 3.28% 3.24%
Efficiency ratio 59.89% 59.35%
No. full-time equivalent employees
- period end 59 53
CAPITAL
Equity to ending assets 6.10% 6.76%
Tier 1 leverage capital ratio n/a 9.32%
Tier 1 risk-based capital ratio n/a 10.97%
Total risk-based capital ratio n/a 13.11%
Book value per share 8.74 8.06
ASSET QUALITY
Net charge-offs 511 342
Net charge-offs to average loans (a) 0.37% 0.30%
Allowance for loan losses 3,354 3,196
Allowance for loan losses to total loans 1.20% 1.38%
Nonperforming loans 3,140 4,410
Restructured loans 0 48
Other real estate owned 453 652
Nonperforming loans to total loans 1.12% 1.92%
Nonperforming assets to total assets 0.92% 1.57%
END OF PERIOD BALANCES
Total assets 389,978 324,524
Total earning assets 367,246 300,386
Total loans 280,366 232,180
Total deposits 333,148 270,229
Stockholders' equity 23,795 21,949
AVERAGE BALANCES
Total assets 374,672 316,785
Total earning assets 356,531 303,053
Total loans 275,935 231,615
Total interest-bearing deposits 288,857 226,262
Stockholders' equity 23,298 21,438
(a) annualized for all periods presented
All per share information has been presented or restated to reflect
the effect of the six-for-five stock splits in 2005.
n/a = not available
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Operations
For the three and six months ended June 30, 2006 and 2005
(unaudited)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2006 2005 2006 2005
---------------------- --------------------- ---------------------
(in thousands, except per share data)
Interest income:
Loans $ 5,615 $ 3,770 $ 10,827 $ 7,357
Securities - taxable 781 501 1,456 962
Interest from
federal funds sold 163 85 251 212
Other interest income 3 9 19 10
--------------------- ---------------------
Total interest
income 6,562 4,365 12,553 8,541
Interest expense:
Deposits 1,482 1,654 5,755 3,156
FHLB advances and
other 1,570 168 507 317
Junior subordinated
debentures 436 138 353 252
--------------------- ---------------------
Total interest
expense 3,488 1,960 6,615 3,725
--------------------- ---------------------
Net interest income 3,074 2,405 5,938 4,816
Provision for loan
losses 285 450 655 730
--------------------- ---------------------
Net interest income
after provision
for loan losses 2,789 1,955 5,283 4,086
Noninterest income:
Service charges 152 157 311 303
Mortgage banking income 107 78 170 136
Other 93 81 297 185
--------------------- ---------------------
Total noninterest
income 352 316 778 624
Noninterest expense:
Salaries and benefits 1,070 798 2,142 1,667
Occupancy and equipment 259 219 524 437
Professional fees 190 202 392 388
Outside data processing 144 129 295 259
Advertising and
promotion 133 95 205 157
Stationery, printing
and supplies 95 81 181 148
Other 140 130 283 232
--------------------- ---------------------
Total noninterest
expense 2,031 1,654 4,022 3,288
--------------------- ---------------------
Income before
income taxes 1,110 617 2,039 1,422
Income taxes expense 432 215 758 488
--------------------- ---------------------
Net income $ 678 $ 402 $ 1,281 $ 934
===================== =====================
Basic earnings per
common share $ 0.25 $ 0.15 $ 0.47 $ 0.34
Diluted earnings
per common share $ 0.24 $ 0.14 $ 0.46 $ 0.33
Average common
shares outstanding 2,720,584 2,719,750 2,720,540 2,713,318
Average common
shares and dilutive
potential common
shares outstanding 2,809,823 2,797,046 2,809,867 2,763,341
Total Shares
outstanding at
end of period 2,721,384 2,719,750 2,721,384 2,719,750
All per share information has been presented or restated to reflect
the effect of the six-for-five stock splits in 2005.
Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Balance Sheets
At June 30, 2006 and 2005, and December 31, 2006
(unaudited)
June 30, December 31,
2006 2005 2005
---------------------------------------------------------------------
(in thousands)
ASSETS
Cash and due from banks $ 4,398 $ 6,289 $ 4,470
Short-term investments and
interest-earning deposits 1,298 75 12,770
Federal funds sold 12,506 15,789 3,519
-------------------- --------
Total cash and cash equivalents 18,202 22,153 20,759
Securities available for
sale, at fair value 72,360 52,480 64,461
Securities held-to-maturity,
at amortized cost 3,856 4,272 3,997
Loans 280,366 232,180 262,609
Allowance for loan losses (3,354) (3,196) (3,210)
-------------------- --------
Net loans 277,012 228,984 259,399
Premises and equipment, net 8,399 7,746 7,728
Other assets 10,149 8,889 8,826
-------------------- --------
Total assets $389,978 $324,524 $365,170
==================== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing $ 29,533 $ 25,297 $ 27,168
Interest-bearing 303,615 244,932 279,166
-------------------- --------
Total deposits 333,148 270,229 306,334
Short-term borrowings 2,703 1,779 2844
Federal Home Loan Bank advances 18,265 18,335 21,300
Junior subordinated debentures 10,310 10,310 10,310
Other liabilities 1,757 1,922 1595
-------------------- --------
Total liabilities 366,183 302,575 342,383
STOCKHOLDERS' EQUITY
Common stock and paid-in-capital,
no par value, 20,000,000 shares
authorized; issued and outstanding
- 2,721,384 and 2,266,458 shares
at June 30, 2006 and 2005;
2,720,496 at December 31, 2005 2,721 2,266 2,720
Additional paid-in capital 15,588 16,022 15,580
Retained earnings 6,321 3,938 5,040
Stock in directors rabbi trust (390) (278) (333)
Directors deferred fees obligation 390 278 333
Accumulated other comprehensive loss (835) (277) (553)
-------------------- --------
Total stockholders' equity 23,795 21,949 22,787
-------------------- --------
Total liabilities and
stockholders' equity $389,978 $324,524 $365,170
==================== ========
Carolina Bank Holdings, Inc. and Subsidiary
Analysis of Loans
At June 30, 2006 and 2005, and December 31, 2005 and 2004
June 30, 2006 June 30, 2005
Amount Percent Amount Percent
----------------- -----------------
Loans Secured by
Real Estate:
Construction and
Land Development $ 58,502 20.87% $ 37,878 16.31%
1-4 Family Residential
Properties 59,763 21.32% 46,031 19.83%
Multifamily Residential
Properties 8,230 2.94% 8,847 3.81%
Nonfarm Nonresidential
Properties 100,306 35.78% 90,497 38.97%
-------- ------ -------- ------
Total Loans Secured by
Real Estate 226,801 80.91% 183,253 78.92%
Commercial and
Industrial Loans 48,152 17.17% 42,921 18.49%
Consumer 3,438 1.23% 4,888 2.11%
All Other Loans 1,975 0.70% 1,118 0.05%
-------- ------ -------- ------
Total Loans $280,366 100.00% $232,180 100.00%
======== ====== ======== ======
--------------------------------------
At December 31,
--------------------------------------
2005 2004
----------------- -----------------
Amount Percent Amount Percent
----------------- -----------------
(Dollars in thousands)
Loans Secured by
Real Estate:
Construction and
Land Development $ 52,666 20.05% $ 36,386 16.28%
1-4 Family Residential
Properties 49,794 18.96% 44,325 19.83%
Multifamily Residential
Properties 9,967 3.80% 14,164 6.34%
Nonfarm Nonresidential
Properties 96,710 36.83% 78,909 35.31%
-------- ------ -------- ------
Total Loans Secured by
Real Estate 209,137 79.64% 173,784 77.76%
Commercial and Industrial
Loans 47,144 17.95% 43,132 19.30%
Consumer 3,989 1.52% 4,955 2.22%
All Other Loans 2,339 0.89% 1,599 0.71%
-------- ------ -------- ------
Total Loans $262,609 100.00% $223,470 100.00%
======== ====== ======== ======