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News   Press Releases

Carolina Bank Holdings, Inc. Reports Results for the Second Quarter of 2016

FNLC | July 28, 2016

GREENSBORO, N.C., July 28, 2016 (GLOBE NEWSWIRE) -- Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported second quarter 2016 results with highlights as follows:

2nd Quarter 2016 Financial Highlights

  • Net income available to common shareholders, excluding merger expenses and related tax benefits, increased to $1,739,000, or $0.34 per diluted common share, in the second quarter of 2016 from $1,572,000, or $0.32 per diluted common share, in the second quarter of 2015. (1.)
  • Including merger expenses and related tax benefits, net income was $1,243,000, or $0.25 per diluted common share, in the second quarter of 2016.
  • Book value per common share increased to $12.71 at June 30, 2016 from $12.18 at December 31, 2015 and $11.72 at June 30, 2015.
  • Loans held for investment increased 4.8% during the second quarter of 2016 and are up 2.4% year-to-date.
  • Average non-interest bearing demand deposits increased 19.0% in the second quarter of 2016 from average non-interest bearing demand deposits in the second quarter of 2015.
  • Net interest margin on a fully-taxable basis increased to 3.73% in the second quarter of 2016 from 3.65% in the second quarter of 2015.
  • Nonperforming assets declined to $9.3 million, or 1.32% of assets, at June 30, 2016 from $17.1 million, or 2.5% of assets, at June 30, 2015. Net loan loss charge-offs were $351,000 and $1,694,000 in the second quarters of 2016 and 2015, respectively.
  • The Mortgage Division had net income of $285,000 in the second quarter of 2016 compared to net income of $649,000 in the second quarter of 2015.  
  • Carolina Bank Holdings, Inc. (Nasdaq:CLBH) entered into a definitive merger agreement with First Bancorp (Nasdaq:FBNC) on June 21, 2016. CLBH stockholders are scheduled to receive either 1.002 shares of FBNC common stock or $20 in cash for each share of CLBH common stock, subject to total consideration being 75% stock/25% cash.  Closing of the merger is contingent upon the receipt of required regulatory and shareholder approvals.

(1.) Net income available to common shareholders and diluted earnings per share, excluding merger expenses and related tax benefits, are not recognized under United States generally accepted accounting principles. These measures are calculated by excluding direct merger expenses, net of any reduction in income taxes, from net income.

Robert T. Braswell, President and CEO, commented, “I am pleased with our progress in building and improving our relationships with customers as evidenced by our growth in loans and non-interest bearing deposits during the second quarter. Excluding the impact of merger expenses, our net income in the second quarter of 2016, was the highest quarterly net income in three and a half years.”  

“We have also made substantial improvements in our credit quality over the past few years which eliminated the need to make a provision for loan losses during the first six months of 2016. We believe that our strong credit culture and commitment to exceptional customer service compliment the similar efforts at First Bank. We are looking forward to a smooth merger with First Bank late this year or early next year and already see many future benefits for our customers and shareholders,” 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. Residential mortgage loan production offices are located in Burlington, Chapel Hill, 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.

The information as of and for the quarter ended June 30, 2016 is unaudited.  This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance or determinations 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, completion of our pending merger and successful merger integration, 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           
          June 30,   December 31,  
            2016       2015    
          (unaudited)      
          (in thousands, except share data)  
  Assets          
  Cash and due from banks   $   6,869     $   6,559    
  Interest-bearing deposits with banks       45,352         69,233    
  Bank term deposits       18,847         16,604    
  Securities available-for-sale, at fair value       45,610         47,360    
  Securities held-to-maturity (fair values of $14,988 in 2016 and $15,226 in 2015)        14,370         14,954    
  Loans held for sale       57,432         39,583    
  Loans          476,783         465,804    
  Less allowance for loan losses       (5,618 )       (5,872 )  
      Net loans        471,165         459,932    
  Premises and equipment, net       18,618         19,007    
  Other real estate owned       4,212         4,592    
  Bank-owned life insurance       12,024         11,843    
  Other assets       11,996         11,131    
      Total assets   $   706,495     $   700,798    
                 
  Liabilities and Stockholders' Equity          
  Deposits          
    Non-interest bearing demand   $   140,717     $   125,189    
    NOW, money market and savings       337,313         349,815    
    Time       121,118         132,303    
      Total deposits       599,148         607,307    
                 
  Advances from the Federal Home Loan Bank       12,627         2,681    
  Securities sold under agreements to repurchase       47         47    
  Subordinated debentures       19,610         19,610    
  Other liabilities and accrued expenses       10,943         10,014    
      Total liabilities       642,375         639,659    
                 
  Stockholders' equity          
    Preferred stock, no par value, authorized 1,000,000 shares;          
      Series A preferred stock  - none issued and outstanding        -         -    
      Series B convertible preferred stock  - none issued and outstanding        -         -    
    Common stock, $1 par value; authorized 20,000,000 shares; issued          
      and outstanding 5,043,108 in 2016 and 5,021,330 in 2015       5,043         5,021    
    Additional paid-in capital       29,448         29,234    
    Retained earnings        28,518         26,174    
    Stock in directors' rabbi trust       (2,015 )       (1,831 )  
    Directors' deferred fees obligation       2,015         1,831    
    Accumulated other comprehensive income        1,111         710    
      Total stockholders’ equity       64,120         61,139    
      Total liabilities and stockholders’ equity   $   706,495     $   700,798    
                 

 

  Carolina Bank Holdings, Inc. and Subsidiary                  
  Consolidated Statements of Income (unaudited)                  
          Three Months   Six Months  
          Ended June 30,    Ended June 30,   
            2016       2015       2016       2015    
          (in thousands, except per share data)          
  Interest income                  
    Loans   $   6,153     $   6,025     $   11,983     $   12,017    
    Investment securities, taxable       325         325         717         663    
    Investment securities, non taxable       115         125         233         247    
    Interest from deposits in banks       140         65         294         126    
      Total interest income       6,733         6,540         13,227         13,053    
                         
  Interest expense                  
    NOW, money market, savings       227         237         466         476    
    Time deposits       246         287         508         599    
    Other borrowed funds       231         151         453         303    
      Total interest expense       704         675         1,427         1,378    
                         
  Net interest income       6,029         5,865         11,800         11,675    
  Provision for loan losses       -         535         -         835    
  Net interest income after provision for loan losses       6,029         5,330         11,800         10,840    
  Non-interest income                  
    Service charges       307         312         598         615    
    Mortgage banking income       2,879         3,721         4,582         6,628    
    Gain on sale of SBA loans       -         53         237         53    
    Other       83         42         141         115    
      Total non-interest income       3,269         4,128         5,558         7,411    
                         
  Non-interest expense                  
    Salaries and benefits       4,443         4,582         8,680         8,900    
    Occupancy and equipment       699         759         1,448         1,535    
    Foreclosed property expense        43         155         88         24    
    Professional fees       507         454         922         903    
    Outside data processing       277         265         551         539    
    FDIC insurance       108         130         201         261    
    Advertising and promotion       213         160         490         353    
    Stationery, printing and supplies       160         147         291         298    
    Merger expense       585         -         585         -    
    Other       419         449         828         830    
      Total non-interest expense       7,454         7,101         14,084         13,643    
                         
  Income before income taxes       1,844         2,357         3,274         4,608    
  Income tax expense        601         691         930         1,313    
  Net income        1,243         1,666         2,344         3,295    
  Dividends and accretion on preferred stock       -         94         -         341    
  Net income available to common stockholders   $   1,243     $   1,572     $   2,344     $   2,954    
  Net income per common share                  
    Basic   $   0.25     $   0.38     $   0.47     $   0.78    
    Diluted   $   0.25     $   0.32     $   0.46     $   0.70    
                         

 

Carolina Bank Holdings, Inc.        
Consolidated Financial Highlights         
Second  Quarter 2016        
(unaudited)        
    Quarterly    Years Ended  
    2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr          
($ in thousands except for share data)     2016     2016     2015     2015     2015       2015       2014    
                       
EARNINGS                      
Net interest income $   6,029     5,771     6,081     5,889     5,865       23,645       23,257    
Provision for loan losses $   -     -     (200 )   450     535       1,085       1,436    
NonInterest income $   3,269     2,289     2,591     3,641     4,128       13,643       9,413    
NonInterest expense $   7,454     6,630     7,276     7,015     7,101       27,934       27,004    
Net income $   1,243     1,101     1,036     1,436     1,666       5,767       3,346    
Net income available to common stockholders $   1,243     1,101     1,036     1,436     1,572       5,426       2,413    
Basic earnings per common share $   0.25     0.22     0.21     0.29     0.38       1.24       0.70    
Diluted earnings per common share $   0.25     0.22     0.21     0.29     0.32       1.17       0.70    
Average common shares outstanding     5,038,723     5,036,150     5,008,301     4,990,163     4,099,303       4,389,086       3,431,385    
Average diluted common shares outstanding     5,042,626     5,041,038     5,019,056     5,000,352     4,988,938       4,620,411       3,433,603    
                       
PERFORMANCE RATIOS                      
Return on average assets *     0.71 %   0.63 %   0.59 %   0.83 %   0.96 %     0.84 %     0.50 %  
Return on average common equity **  *     7.89 %   7.14 %   6.79 %   9.59 %   11.38 %     9.96 %     6.05 %  
Net interest margin (fully-tax equivalent) *     3.73 %   3.61 %   3.79 %   3.74 %   3.65 %     3.73 %     3.80 %  
Efficiency ratio (excluding merger expenses)     72.89 %   80.98 %   83.05 %   72.94 %   70.38 %     74.18 %     81.78 %  
Efficiency ratio (excluding mortgage div/merger X)     67.93 %   71.95 %   75.06 %   73.29 %   69.79 %     71.72 %     71.73 %  
# full-time equivalent employees - period end     187     190     192     190     192       192       189    
                       
CAPITAL                      
Equity to period-end assets     9.08 %   8.88 %   8.72 %   8.72 %   8.55 %     8.72 %     7.75 %  
Common tangible equity to assets     9.08 %   8.88 %   8.72 %   8.72 %   8.55 %     8.72 %     6.13 %  
Tier 1 leverage capital ratio - Bank     9.94 %   9.74 %   9.71 %   9.65 %   9.24 %     9.71 %     9.11 %  
Tier 1 risk-based capital ratio - Bank     12.20 %   12.62 %   12.09 %   11.66 %   11.23 %     12.09 %     11.42 %  
Total risk-based capital ratio - Bank     13.82 %   14.40 %   13.81 %   13.90 %   13.21 %     13.81 %     13.67 %  
Book value per common share $   12.71     12.45     12.18     12.04     11.72       12.18       12.13    
                       
ASSET QUALITY                      
Net loan charge-offs (recoveries) $   351     (97 )   1,495     (1,321 )   1,694       1,733       2,579    
Net charge-offs (recoveries) to average loans *     0.30 %   -0.08 %   1.29 %   -1.15 %   1.45 %     0.37 %     0.56 %  
Allowance for loan losses $   5,618     5,969     5,872     7,567     5,795       5,872       6,520    
Allowance for loan losses to loans held invst.     1.18 %   1.31 %   1.26 %   1.62 %   1.26 %     1.26 %     1.38 %  
Nonperforming loans $   5,101     3,519     3,110     8,964     11,716       3,110       6,458    
Performing restructured loans $   9,486     12,078     9,687     9,317     9,450       9,687       9,774    
Other real estate owned $   4,212     4,587     4,592     5,073     5,352       4,592       5,610    
Nonperforming loans to loans held for investment         1.07 %   0.77 %   0.67 %   1.92 %   2.54 %     0.67 %     1.37 %  
Nonperforming assets to total assets     1.32 %   1.15 %   1.10 %   2.04 %   2.50 %     1.10 %     1.78 %  
                       
END OF PERIOD BALANCES                      
Total assets $   706,495     705,704     700,798     688,974     683,685       700,798       679,263    
Total loans held for investment $   476,783     455,139     465,804     465,889     461,000       465,804       472,189    
Total deposits $   599,148     601,073     607,307     596,489     592,719       607,307       594,898    
Stockholders' equity $   64,120     62,687     61,139     60,098     58,460       61,139       52,655    
                       
AVERAGE BALANCES                      
Total assets $   706,633     702,473     692,522     684,917     699,101       689,842       664,812    
Total earning assets $   663,082     657,915     646,158     633,304     654,317       643,031       620,996    
Total loans held for investment $   470,021     466,301     463,285     459,538     465,914       465,163       462,870    
Total non interest-bearing demand deposits $   141,092     129,367     125,279     119,074     118,577       118,355       94,618    
Common stockholders' equity $   63,349     61,979     60,522     59,384     55,414       54,479       39,904    
                       
* annualized for all periods presented                      
**return on average common equity is computed using net income available to common stockholders          
            
FOR ADDITIONAL INFORMATION, PLEASE CONTACT: Carolina Bank Holdings, Inc. T. Allen Liles, EVP and CFO Telephone: 336-286-8746 Email: a.liles@carolinabank.com

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