updated 2/2/2011 5:17:27 PM ET 2011-02-02T22:17:27

GREENSBORO, N.C., Feb. 2, 2011 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported fourth quarter 2010 results with highlights as follows:

Fourth Quarter 2010 Financial Highlights

  • Net income available to common shareholders was $392,000 in the fourth quarter of 2010 compared to a net loss allocable to common shareholders of $1.80 million in the fourth quarter of 2009.
  • Diluted net income (loss) per common share was $0.12 and $(0.53) in the fourth quarter of 2010 and 2009, respectively.
  • Carolina Bank, the subsidiary of Carolina Bank Holdings, Inc., continued to maintain 'Well Capitalized' status, the highest regulatory capital measure. Capital ratios improved during the fourth quarter of 2010 due to retained net income and a reduction in assets.
  • Net interest income, computed on a fully taxable basis, reached an all time quarterly high of $6.25 million in the fourth quarter of 2010, up 11.4% from the fourth quarter of 2009.
  • The net interest margin, computed on a fully taxable basis, increased to a ten year high of 3.80% in the fourth quarter of 2010 compared to 3.41% in the fourth quarter of 2009.
  • Provision for loan losses decreased to $1.83 million in the fourth quarter of 2010 from $5.55 million in the same quarter of 2009. Asset impairments were $1.44 million and $0.12 million in the fourth quarters of 2010 and 2009, respectively.

Net loss allocable to common stockholders was $3.54 million, or ($1.04) per diluted common share, in 2010 compared to $1.45 million, or ($0.43) per diluted common share, in 2009. Robert T. Braswell, President and CEO of Carolina Bank Holdings, commented, "We are pleased with our return to profitability in the fourth quarter of 2010. Our record net interest income and record non-interest income from our mortgage division are commendable. Carolina Bank continues to be 'Well Capitalized' and strengthened its capital ratios from retained income and a planned reduction in assets during the fourth quarter."

Non-performing loans to total loans held for investment increased to 5.39% at December 31, 2010 from 5.20% at September 30, 2010. Non-performing assets to total assets increased to 5.55% at December 31, 2010 from 5.25% at September 30, 2010. Braswell commented, "Reducing the elevated level of non-performing assets is a top priority of our team in 2011. We hope that the economy will improve and help facilitate our plan of substantially reducing non-performing assets." The bank had net loan charge-offs of $12.86 million and $6.20 million in 2010 and 2009, respectively. The allowance for loan losses was 2.40% and 1.90% of loans held for investment at December 31, 2010 and 2009, respectively.

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, four in Greensboro, one in Asheboro, one in High Point, one in Burlington, and one in Winston-Salem, North Carolina. A mortgage loan production office was opened in Burlington in July 2010. 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    
At December 31, 2010 and 2009    
  December 31, 
  2010 2009
  (Unaudited)  
  (in thousands)
ASSETS    
Cash and due from banks  $ 5,116  $ 6,416
Short-term investments and interest-earning deposits  17,710  34,039
Total cash and cash equivalents  22,826  40,455
     
Securities available for sale, at fair value  46,103  52,924
Securities held-to-maturity, at amortized cost  563  770
     
Loans held for sale  53,961  29,388
Loans  514,029  530,606
Allowance for loan losses  (12,359)  (10,081)
Net loans  501,670  520,525
     
Premises and equipment, net  18,622  19,351
Other assets  32,956  33,639
     
Total assets  $ 676,701  $ 697,052
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
LIABILITIES    
Deposits:    
 Noninterest-bearing  $ 43,564  $ 39,261
 Interest-bearing  561,003  578,210
Total deposits  604,567  617,471
     
Short-term borrowings  432  683
Federal Home Loan Bank advances  3,165  7,783
Subordinated debentures  19,414  19,360
Other liabilities  4,841  3,807
Total liabilities  632,419  649,104
     
STOCKHOLDERS' EQUITY    
Preferred stock, no par, authorized 1,000,000 shares; issued    
 and outstanding 16,000 shares in 2010 and 2009  14,811  14,473
Common stock, $1 par value, 20,000,000 shares authorized; issued     
 and outstanding -- 3,387,045 shares in 2010 and 2009  3,387  3,387
Common stock warrants  1,841  1,841
Additional paid-in capital  15,834  15,799
Retained earnings  7,910  11,445
Stock in directors' rabbi trust  (718)  (874)
Directors' deferred fees obligation  718  874
Accumulated other comprehensive income   499  1,003
Total stockholders' equity  44,282  47,948
     
Total liabilities and stockholders' equity  $ 676,701  $ 697,052
         
         
         
         
Carolina Bank Holdings, Inc. and Subsidiary        
Consolidated Statements of Operations        
For the three months and years ended December 31, 2010 and 2009        
(unaudited, except year ended 12/31/2009)        
  For the Three Months For the Years
  Ended December 31,  Ended December 31, 
  2010 2009 2010 2009
  (in thousands, except per share data)
Interest income        
Loans  $ 7,759  $ 7,843  $ 30,549  $ 29,982
Investment securities, taxable  362  489  1,637  2,141
Investment securities, non taxable  156  151  650  563
Interest from federal funds sold and other  18  13  78  35
Total interest income  8,295  8,496  32,914  32,721
         
Interest expense        
NOW, money market, savings  732  1,168  3,505  4,470
Time deposits  1,203  1,554  5,223  7,363
Other borrowed funds  190  236  845  1,183
Total interest expense  2,125  2,958  9,573  13,016
         
Net interest income  6,170  5,538  23,341  19,705
Provision for loan losses  1,825  5,552  15,133  10,520
Net interest income after 

provision for loan losses
 4,345  (14)  8,208  9,185
Non-interest income        
Service charges  228  224  910  1,021
Mortgage banking income  4,492  2,244  11,686  8,814
Gains (losses) on sale of investment securities  --  --  535  99
Repossessed asset gains (losses)  (34)  7  (273)  55
Other  24  160  517  561
Total non-interest income  4,710  2,635  13,375  10,550
         
Non-interest expense        
Salaries and benefits  3,595  2,619  12,232  10,102
Occupancy and equipment  629  598  2,490  2,350
Professional fees  479  390  1,418  1,285
Outside data processing  231  220  948  835
FDIC insurance  328  241  1,109  1,218
Advertising and promotion  155  150  699  585
Stationery, printing and supplies  158  158  557  581
Impairment of repossessed assets  1,438  --  3,350  816
Impairment of investment security  --  124  --  850
Repossessed asset expenses  361  150  1,027  585
Other  816  403  2,231  1,370
Total non-interest expense  8,190  5,053  26,061  20,577
         
Income (loss) before income taxes  865  (2,432)  (4,478)  (842)
Income tax expense (benefit)  186  (905)  (2,084)  (484)
Net income (loss)  679  (1,527)  (2,394)  (358)
Dividends and accretion on preferred stock  287  275  1,142  1,090
Net income (loss) available (allocable) to common stockholders  $ 392  $ (1,802)  $ (3,536)  $ (1,448)
         
         
Net income (loss) per common share        
Basic  $ 0.12  $ (0.53)  $ (1.04)  $ (0.43)
Diluted  $ 0.12  $ (0.53)  $ (1.04)  $ (0.43)
               
               
Carolina Bank Holdings, Inc.              
Consolidated Financial Highlights               
Fourth Quarter 2010              
(unaudited)              
  Quarterly  Years Ended
  4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr.    
($ in thousands except for share data) 2010 2010 2010 2010 2009 2010 2009
               
EARNINGS              
 Net interest income $ 6,170 5,981 5,670 5,520 5,538  23,341  19,705
 Provision for loan loss $ 1,825 6,620 4,700 1,988 5,552  15,133  10,520
 NonInterest income $ 4,710 4,030 2,502 2,133 2,635  13,375  10,550
 NonInterest expense $ 8,190 6,421 6,172 5,278 5,053  26,061  20,577
 Net income (loss)  $ 679 (1,804) (1,568) 299 (1,527)  (2,394)  (358)
 Net income (loss) available to common stockholders $ 392 (2,086) (1,856) 14 (1,802)  (3,536)  (1,448)
 Basic earnings (loss) per share $ 0.12 (0.62) (0.55) 0.01 (0.53)  (1.04)  (0.43)
 Diluted earnings (loss) per share $ 0.12 (0.62) (0.55) 0.01 (0.53)  (1.04)  (0.43)
 Average shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045  3,383,748
 Average diluted shares outstanding 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045  3,385,102
               
PERFORMANCE RATIOS              
 Return on average assets * 0.22% -1.19% -1.06% 0.01% -1.03% -0.51% -0.22%
 Return on average common equity * 5.24% -26.45% -22.54% 0.17% -20.42% -11.08% -4.21%
 Net interest margin (fully-tax equivalent) * 3.80% 3.70% 3.50% 3.54% 3.41% 3.63% 3.20%
 Efficiency ratio 74.73% 63.64% 74.80% 68.24% 61.30% 70.38% 67.42%
 # full-time equivalent employees - period end  155  153  147  143  140  155  140
               
CAPITAL              
 Equity to ending assets 6.54% 6.36% 6.58% 6.83% 6.88% 6.54% 6.88%
 Common tangible equity to assets 4.36% 4.25% 4.50% 4.77% 4.80% 4.36% 4.80%
 Tier 1 leverage capital ratio - Bank 7.59% 7.43% 7.23% 7.54% 7.45% 7.59% 7.45%
 Tier 1 risk-based capital ratio - Bank 9.00% 8.73% 8.55% 8.59% 8.50% 9.00% 8.50%
 Total risk-based capital ratio - Bank 11.82% 11.52% 11.34% 11.34% 11.24% 11.82% 11.24%
 Book value per common share $8.70 8.79 9.37 9.91 9.88 8.70 9.88
               
ASSET QUALITY              
 Net charge-offs (recoveries) $1,096  5,261  5,126  1,372  2,509  12,855  6,199
 Net charge-offs to average loans * 0.84% 4.02% 3.80% 1.03% 1.88% 2.43% 1.19%
 Allowance for loan losses $ 12,359 11,629 10,270 10,697 10,081 12,359 10,081
 Allowance for loan losses to loans held invst. 2.40% 2.24% 1.93% 2.00% 1.90% 2.40% 1.90%
 Nonperforming loans $ 27,713 26,972 24,721 19,636 14,163 27,713 14,163
 Performing restructured loans $8,396 700  --   --   --  8,396  --
 Repossessed assets $9,863 9,763 7,792 11,507 13,964 9,863 13,964
 Nonperforming loans to loans held for investment 5.39% 5.20% 4.63% 3.68% 2.67% 5.39% 2.67%
 Nonperforming assets to total assets 5.55% 5.25% 4.62% 4.42% 4.04% 5.55% 4.04%
               
END OF PERIOD BALANCES              
 Total assets $ 676,701 700,234 704,340 704,085 697,052 676,701 697,052
 Total loans held for investment $ 514,029 519,177 533,486 534,045 530,606 514,029 530,606
 Total deposits $ 604,567 626,060 626,527 625,730 617,471 604,567 617,471
 Stockholders' equity $ 44,282 44,507 46,359 48,112 47,948 44,282 47,948
               
AVERAGE BALANCES              
 Total assets $ 693,279 698,106 700,598 691,406 694,529 695,847 665,555
 Total earning assets $ 653,276 650,068 658,491 641,861 651,733 650,926 624,031
 Total loans held for investment  $ 521,462 523,714 539,554 532,928 533,143 529,415 522,965
 Total interest-bearing deposits  $ 574,181 580,084 584,031 576,968 573,595 578,815 528,158
 Common stockholders' equity $ 29,702 31,295 33,034 33,666 35,008 31,924 34,385
               
* annualized for all periods presented              
return on average assets and on average common equity are computed using net income (loss) available to common stockholders            
CONTACT:  Carolina Bank Holdings, Inc. 
          Robert T. Braswell, President and CEO 
          336-286-8740
          b.braswell@carolinabank.com

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