Carolina Bank Holdings, Inc. Reports EPS of $0.29 for the Third Quarter of 2015

GREENSBORO, N.C., Oct. 29, 2015 (GLOBE NEWSWIRE) — Carolina Bank Holdings, Inc. (NASDAQ:CLBH) today reported third quarter 2015 results with highlights as follows:

Third Quarter 2015 Financial Highlights

  • Net income of $1,436,000 in the third quarter of 2015 increased 41.9% from $1,012,000 in the third quarter of 2014. Net income for the nine months ended September 30, 2015 and September 30, 2014 was $4,731,000 and $2,027,000, respectively, an increase of 133.4% in the 2015 period.
  • Net income available to common shareholders increased 88.0% to $1,436,000 in the third quarter of 2015 from $764,000 in the third quarter of 2014. Net income available to common shareholders increased 227.4% to $4,390,000 in the nine months ended September 30, 2015 from $1,341,000 in the nine months ended September 30, 2014. Series A preferred stock of $11.0 million was retired in May of 2015 which eliminated scheduled preferred stock dividends of approximately $248,000 in the third quarter of 2015.
  • Diluted net income per common share was $0.29 in the third quarter of 2015 compared to $0.22 in the third quarter of 2014.
  • The number of common stock shares outstanding increased to 4,992,380 at September 30, 2015 from 3,434,680 at December 31, 2014, primarily due to convertible preferred stock issued on March 31, 2015 which was converted into 1,550,000 shares of common stock on May 22, 2015.
  • Average non-interest bearing demand deposits increased 23.7% in the third quarter of 2015 from the third quarter of 2014.
  • Non-performing assets were $14.0 million, or 2.04% of assets, at September 30, 2015 compared to $15.9 million, or 2.40% of assets, at September 30, 2014.
  • The Mortgage Division realized net income of $563,000 in the third quarter of 2015 compared to a loss of $160,000 in the third quarter of 2014.

Robert T. Braswell, President and CEO, commented, “I am pleased to report that our diluted earnings per share was $1.32 over the last four quarters and increased 31.8% to $0.29 in the third quarter of 2015 from the third quarter of 2014 . Mortgage banking has also experienced a turnaround in 2015 as our mortgage division recorded higher net income due to increased originations.”

“Our outstanding loans held for investment and non-interest bearing demand deposits grew during the third quarter. The growth of over 23.7% in our average non-interest bearing demand accounts in the past year validates that our emphasis on exceptional customer service has enhanced our relationships with customers,” said Braswell.

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, Forsyth and Randolph. The bank has eight full-service banking locations, three in Greensboro, one in Asheboro, one in High Point, one in Burlington, and two in Winston-Salem. Our Greensboro Friendly Center branch closed on July 31, 2015 due to an expiring lease in late 2015. Our second full-service office in Winston-Salem, opened in August of 2015. Residential mortgage loan production offices are located in Burlington, Chapel Hill, Pinehurst, and Sanford in addition to a wholesale residential mortgage operation in Greensboro. The Company’s stock is listed on the NASDAQ Global 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 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. 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    
   
  September 30, December 31,
  2015 2014
  (unaudited)  
  (in thousands, except share data)
Assets    
Cash and due from banks  $ 6,763  $ 7,942
Interest-bearing deposits with banks  47,197  38,232
Bank term deposits  14,106  14,106
Securities available-for-sale, at fair value  49,598  51,200
Securities held-to-maturity (fair values of $15,133 in 2015 and $15,945 in 2014)  14,718  15,644
Loans held for sale  50,762  39,780
Loans  465,889  472,189
Less allowance for loan losses  (7,567)  (6,520)
Net loans  458,322  465,669
Premises and equipment, net  19,135  18,311
Other real estate owned  5,073  5,610
Bank-owned life insurance  11,751  11,483
Other assets  11,549  11,286
Total assets  $ 688,974  $ 679,263
     
Liabilities and Stockholders’ Equity    
Deposits    
Non-interest bearing demand  $ 121,058  $ 106,163
NOW, money market and savings  341,461  344,919
Time  133,970  143,816
Total deposits  596,489  594,898
     
Advances from the Federal Home Loan Bank  2,707  2,785
Securities sold under agreements to repurchase  48  176
Subordinated debentures  19,610  19,610
Other liabilities and accrued expenses  10,022  9,139
Total liabilities  628,876  626,608
     
Stockholders’ equity    
Preferred stock, no par value, authorized 1,000,000 shares; Series A shares issued and outstanding 0 in 2015 and 10,994 in 2014  —  10,994
Common stock, $1 par value; authorized 20,000,000 shares; issued and outstanding 4,992,380 in 2015 and 3,434,680 in 2014  4,992  3,435
Additional paid-in capital  28,936  16,339
Retained earnings  25,138  20,748
Stock in directors’ rabbi trust  (1,743)  (1,465)
Directors’ deferred fees obligation  1,743  1,465
Accumulated other comprehensive income  1,032  1,139
Total stockholders’ equity  60,098  52,655
Total liabilities and stockholders’ equity  $ 688,974  $ 679,263
         
         
Carolina Bank Holdings, Inc. and Subsidiary        
Consolidated Statements of Income (unaudited)        
  Three Months Nine Months
  Ended September 30,  Ended September 30, 
  2015 2014 2015 2014
  (in thousands, except per share data)
Interest income        
Loans  $ 6,062  $ 6,139  $ 18,079  $ 17,751
Investment securities, taxable  322  385  985  1,216
Investment securities, non taxable  116  131  363  409
Interest from deposits in banks  57  41  183  150
Total interest income  6,557  6,696  19,610  19,526
         
Interest expense        
NOW, money market, savings  237  240  713  716
Time deposits  277  396  876  1,221
Other borrowed funds  154  168  457  496
Total interest expense  668  804  2,046  2,433
         
Net interest income  5,889  5,892  17,564  17,093
Provision for loan losses  450  270  1,285  1,386
Net interest income after provision for loan losses  5,439  5,622  16,279  15,707
Non-interest income        
Service charges  304  320  919  940
Mortgage banking income  3,220  2,114  9,848  5,401
Gain on sale of investment securities available-for-sale  —  113  27  256
Other  117  55  258  95
Total non-interest income  3,641  2,602  11,052  6,692
         
Non-interest expense        
Salaries and benefits  4,533  4,522  13,433  12,373
Occupancy and equipment  783  767  2,318  2,321
Foreclosed property expense  67  11  91  174
Professional fees  474  403  1,377  1,407
Outside data processing  270  274  809  800
FDIC insurance  132  132  393  399
Advertising and promotion  225  222  578  716
Stationery, printing and supplies  149  148  447  426
Other  382  350  1,212  1,260
Total non-interest expense  7,015  6,829  20,658  19,876
         
Income before income taxes  2,065  1,395  6,673  2,523
Income tax expense   629  383  1,942  496
Net income   1,436  1,012  4,731  2,027
Dividends on preferred stock  —  248  341  686
Net income available to common stockholders  $ 1,436  $ 764  $ 4,390  $ 1,341
Net income per common share        
Basic  $ 0.29  $ 0.22  $ 1.05  $ 0.39
Diluted  $ 0.29  $ 0.22  $ 0.98  $ 0.39
     
     
Carolina Bank Holdings, Inc.    
Consolidated Financial Highlights     
Third Quarter 2015    
(unaudited)    
  Quarterly  Years Ended
  3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr    
($ in thousands except for share data) 2015 2015 2015 2014 2014 2014 2013
               
EARNINGS              
Net interest income $ 5,889 5,865 5,810 6,164 5,892  23,257  22,315
Provision for loan losses $ 450 535 300 50 270  1,436  3,450
NonInterest income $ 3,641 4,128 3,283 2,721 2,602  9,413  14,334
NonInterest expense $ 7,015 7,101 6,542 7,128 6,829  27,004  27,620
Net income $ 1,436 1,666 1,629 1,319 1,012  3,346  4,010
Net income available to common stockholders $ 1,436 1,572 1,382 1,072 764  2,413  2,928
Basic earnings per common share $ 0.29 0.38 0.40 0.31 0.22  0.70  0.86
Diluted earnings per common share $ 0.29 0.32 0.40 0.31 0.22  0.70  0.85
Average common shares outstanding 4,990,163 4,099,303 3,434,680 3,434,680 3,431,933  3,431,385 3,410,974
Average diluted common shares outstanding 5,000,352 4,988,938 3,451,902 3,434,680 3,432,130  3,433,603 3,426,764
               
PERFORMANCE RATIOS              
Return on average assets * 0.83% 0.96% 0.97% 0.78% 0.60% 0.50% 0.60%
Return on average common equity ** 9.59% 11.38% 13.24% 10.36% 7.56% 6.05% 7.52%
Net interest margin (fully-tax equivalent) * 3.74% 3.65% 3.75% 3.95% 3.81% 3.80% 3.59%
Efficiency ratio 72.94% 70.38% 71.21% 79.39% 79.48% 81.78% 74.88%
Efficiency ratio (excluding mortgage division) 73.29% 69.79% 68.63% 73.94% 68.81% 71.73% 69.63%
# full-time equivalent employees – period end 190 192 191 189 193 189 191
               
CAPITAL              
Equity to period-end assets 8.72% 8.55% 9.60% 7.75% 7.68% 7.75% 7.50%
Common tangible equity to assets 8.72% 8.55% 6.07% 6.13% 6.03% 6.13% 5.83%
Tier 1 leverage capital ratio – Bank 9.65% 9.24% 9.20% 9.11% 9.03% 9.11% 8.86%
Tier 1 risk-based capital ratio – Bank 11.66% 11.23% 11.25% 11.42% 11.05% 11.42% 11.19%
Total risk-based capital ratio – Bank 13.90% 13.21% 13.50% 13.67% 13.61% 13.67% 13.85%
Book value per common share  $ 12.04  11.72  11.48  12.13  11.75  12.13  11.26
               
ASSET QUALITY              
Net loan charge-offs (recoveries) $ (1,321) 1,694 (134) 76 927  2,579  5,731
Net charge-offs (recoveries) to average loans * -1.15% 1.45% -0.11% 0.06% 0.80% 0.56% 1.33%
Allowance for loan losses $ 7,567 5,795 6,954 6,520 6,546 6,520 7,663
Allowance for loan losses to loans held invst. 1.62% 1.26% 1.49% 1.38% 1.39% 1.38% 1.73%
Nonperforming loans  $ 8,964  11,716  6,362  6,458  10,348  6,458  16,731
Performing restructured loans $ 9,317 9,450 9,548 9,774 9,883 9,774 10,381
Other real estate owned $ 5,073 5,352 5,116 5,610 5,587 5,610 2,329
Nonperforming loans to loans held for investment 1.92% 2.54% 1.36% 1.37% 2.20% 1.37% 3.77%
Nonperforming assets to total assets 2.04% 2.50% 1.62% 1.78% 2.40% 1.78% 2.88%
               
END OF PERIOD BALANCES              
Total assets $ 688,974 683,685 710,672 679,263 669,029 679,263 661,807
Total loans held for investment $ 465,889 461,000 467,232 472,189 470,782 472,189 444,087
Total deposits $ 596,489 592,719 609,417 594,898 586,940 594,898 579,097
Stockholders’ equity $ 60,098 58,460 68,238 52,655 51,352 52,655 49,604
               
AVERAGE BALANCES              
Total assets $ 684,917 699,101 682,777 675,159 669,168  664,812 671,529
Total earning assets $ 633,304 654,317 638,368 629,331 623,761  620,996 627,492
Total loans held for investment $ 459,538 465,914 472,073 475,106 466,268  462,870 432,471
Total non interest-bearing demand deposits  $ 119,074  118,577  110,318  104,241  96,248  94,618 82,343
Common stockholders’ equity $ 59,384 55,414 42,341 41,065 40,069  39,904 38,927
               
*annualized for all periods presented
**return on average common equity is computed using net income available to common stockholders
CONTACT: Carolina Bank Holdings, Inc.
         T. Allen Liles, EVP and CFO
         Telephone: 336-286-8746
         Email: a.liles@carolinabank.com