Carolina Bank Holdings, Inc. (Nasdaq:CLBH) today reported third quarter 2016 results with highlights as follows:

Third Quarter 2016 Financial Highlights

  • Net income available to common shareholders increased to $1,564,000, or $0.31 per diluted common share, in the third quarter of 2016 from $1,436,000, or $0.29 per diluted common share in the third quarter of 2015. 
  • Book value per common share increased to $13.00 at September 30, 2016 from $12.18 at December 31, 2015 and $12.04 at September 30, 2015.
  • Loans held for investment increased 5.55% during the third quarter of 2016 and are up 8.03% year-to-date.
  • Average non-interest bearing demand deposits increased 23.33% in the third quarter of 2016 from average non-interest bearing demand deposits in third quarter of 2015.
  • The net interest margin on a fully taxable basis decreased to 3.60% in the third quarter of 2016 from 3.74% in the third quarter of 2015; however, net interest income on a fully taxable basis increased to $6,059,000 in the third quarter of 2016 from $5,976,000 in the third quarter of 2015 due to growth and improved asset quality.
  • Nonperforming assets declined to $8,306,000, or 1.17% of assets, at September 30, 2016 from $14,037,000, or 2.04% of assets, at September 30, 2015.
  • Net loan loss charge-offs were $108,000 for the first nine months of 2016 compared to $1,733,000 for the year ended December 31, 2015.
  • The Commercial/Retail Bank segment which excludes the mortgage division and the holding company had net income of $1,670,000 and $940,000 for the third quarters of 2016 and 2015, respectively. The increase in 2016 resulted from a lower provision for loan losses, lower operating expenses, and higher gains from the origination and sale of SBA loans.
  • 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.

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 third quarter. We have also gained momentum in originating and selling SBA loans during 2016 and have continued to improve our credit quality.”

We are excited about our proposed merger with First Bancorp who shares our philosophy of delivering unparalleled service and financial solutions. Our team has been busy with merger integration planning which is proceeding according to schedule. I encourage our shareholders to vote "for" the merger when proxy materials are delivered in November,” 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.

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.

Additional Information About the Proposed Merger with First Bancorp and Where to Find It

This material contained in this press release is not a substitute for the proxy statement/prospectus or any other documents which First Bancorp and Carolina Bank Holdings may send to their respective shareholders in connection with the proposed merger.  This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities.

In connection with the proposed transaction, First Bancorp has filed with the SEC a Registration Statement on Form S-4 that includes a proxy statement of Carolina Bank Holdings, Inc. and a prospectus of First Bancorp, as well as other relevant documents concerning the proposed transaction.  Investors and security holders are also urged to carefully review and consider each of First Bancorp’s and Carolina Bank Holdings’ public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The proxy statement/prospectus will be mailed to the shareholders of Carolina Bank Holdings on or about November 3, 2016. BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS, INVESTORS AND SHAREHOLDERS OF CAROLINA BANK HOLDINGS ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED MERGER AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders may obtain a free copy of the proxy statement/prospectus and other filings containing information about First Bancorp and Carolina Bank Holdings at the SEC’s website at www.sec.gov. Investors and security holders may also obtain free copies of the documents filed with the Securities and Exchange Commission by First Bancorp on its website at http://www.localfirstbank.com and by Carolina Bank Holdings, Inc. on its website at http://www.carolinabank.com.

First Bancorp, Carolina Bank Holdings, Inc. and certain of their respective directors and executive officers may, under the SEC’s rules, be deemed to be participants in the solicitation of proxies of shareholders of Carolina Bank Holdings, Inc. in connection with the proposed transaction. Information about the directors and executive officers of First Bancorp and their ownership of First Bancorp common stock is set forth in the proxy statement for First Bancorp’s 2016 Annual Meeting of Shareholders, as filed with the SEC on Schedule 14A on April 4, 2016. Information about the directors and executive officers of Carolina Bank Holdings and their ownership of Carolina Bank Holdings’ common stock is set forth in the proxy statement for Carolina Bank Holdings, Inc.’s 2016 Annual Meeting of Shareholders, as filed with the SEC on a Schedule 14A on April 5, 2016. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the proxy statement/prospectus regarding the proposed transaction when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.

  Carolina Bank Holdings, Inc. and Subsidiary          
  Consolidated Balance Sheets          
          September 30,   December 31,  
            2016       2015    
          (unaudited)      
        (in thousands, except share data)
  Assets          
  Cash and due from banks   $   4,807     $   6,559    
  Interest-bearing deposits with banks       47,658         69,233    
  Bank term deposits       15,139         16,604    
  Securities available-for-sale, at fair value       41,458         47,360    
  Securities held-to-maturity (fair values of $14,557 in 2016 and $15,226 in 2015)     14,031         14,954    
  Loans held for sale       42,616         39,583    
  Loans         503,226         465,804    
  Less allowance for loan losses       (5,764 )       (5,872 )  
      Net loans       497,462         459,932    
  Premises and equipment, net       18,389         19,007    
  Other real estate owned       3,914         4,592    
  Bank-owned life insurance       12,118         11,843    
  Other assets       11,298         11,131    
      Total assets   $   708,890     $   700,798    
                 
  Liabilities and Stockholders' Equity          
  Deposits          
    Non-interest bearing demand   $   143,057     $   125,189    
    NOW, money market and savings       355,364         349,815    
    Time       103,062         132,303    
      Total deposits       601,483         607,307    
                 
  Advances from the Federal Home Loan Bank       12,100         2,681    
  Securities sold under agreements to repurchase       -         47    
  Subordinated debentures       19,610         19,610    
  Other liabilities and accrued expenses       10,131         10,014    
      Total liabilities       643,324         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 5,045,358 in 2016 and 5,021,330 in 2015       5,045         5,021    
    Additional paid-in capital       29,471         29,234    
    Retained earnings       30,082         26,174    
    Stock in directors' rabbi trust       (2,089 )       (1,831 )  
    Directors' deferred fees obligation       2,089         1,831    
    Accumulated other comprehensive income       968         710    
      Total stockholders’ equity       65,566         61,139    
      Total liabilities and stockholders’ equity   $   708,890     $   700,798    

 

  Carolina Bank Holdings, Inc. and Subsidiary                
  Consolidated Statements of Income (unaudited)                
          Three Months   Nine Months
          Ended September 30,   Ended September 30,
            2016       2015       2016       2015  
        (in thousands, except per share data)
  Interest income                
    Loans   $   6,063     $   6,062     $   18,046     $   18,079  
    Investment securities, taxable       306         322         1,023         985  
    Investment securities, non taxable       116         116         349         363  
    Interest from deposits in banks       112         57         406         183  
      Total interest income       6,597         6,557         19,824         19,610  
                       
  Interest expense                
    NOW, money market, savings       234         237         700         713  
    Time deposits       223         277         731         876  
    Other borrowed funds       240         154         693         457  
      Total interest expense       697         668         2,124         2,046  
                       
  Net interest income       5,900         5,889         17,700         17,564  
  Provision for loan losses       -         450         -         1,285  
  Net interest income after provision for loan losses     5,900         5,439         17,700         16,279  
  Non-interest income                
    Service charges       318         304         916         919  
    Mortgage banking income       2,533         3,220         7,115         9,848  
    Gain on sale of SBA loans       261         67         498         120  
    Other       70         50         211         165  
      Total non-interest income       3,182         3,641         8,740         11,052  
                       
  Non-interest expense                
    Salaries and benefits       4,536         4,533         13,216         13,433  
    Occupancy and equipment       722         783         2,170         2,318  
    Professional fees       457         474         1,379         1,377  
    Outside data processing       280         270         831         809  
    FDIC insurance       109         132         310         393  
    Advertising and promotion       244         225         734         578  
    Stationery, printing and supplies       142         149         433         447  
    Merger expense       154         -         739         -  
    Other       279         449         1,195         1,303  
      Total non-interest expense       6,923         7,015         21,007         20,658  
                       
  Income before income taxes       2,159         2,065         5,433         6,673  
  Income tax expense       595         629         1,525         1,942  
  Net income       1,564         1,436         3,908         4,731  
  Dividends and accretion on preferred stock       -         -         -         341  
  Net income available to common stockholders   $   1,564     $   1,436     $   3,908     $   4,390  
  Net income per common share                
    Basic   $   0.31     $   0.29     $   0.78     $   1.05  
    Diluted   $   0.31     $   0.29     $   0.77     $   0.98  

 

Carolina Bank Holdings, Inc.        
Consolidated Financial Highlights         
Third  Quarter 2016        
(unaudited)        
    Quarterly   Years Ended  
    3rd Qtr 2nd Qtr 1st Qtr 4th Qtr 3rd Qtr          
($ in thousands except for share and per share data)     2016     2016     2016     2015     2015       2015       2014    
                       
EARNINGS                      
  Net interest income $   5,900     6,029     5,771     6,081     5,889         23,645         23,257    
  Provision for loan losses $     -        -        -      (200 )   450         1,085         1,436    
  NonInterest income $   3,182     3,269     2,289     2,591     3,641         13,643         9,413    
  NonInterest expense $   6,923     7,454     6,630     7,276     7,015         27,934         27,004    
  Net income $   1,564     1,243     1,101     1,036     1,436         5,767         3,346    
  Net income available to common stockholders $   1,564     1,243     1,101     1,036     1,436         5,426         2,413    
  Basic earnings per common share $   0.31     0.25     0.22     0.21     0.29         1.24         0.70    
  Diluted earnings per common share $   0.31     0.25     0.22     0.21     0.29         1.17         0.70    
  Average common shares outstanding     5,044,646     5,038,723     5,036,150     5,008,301     4,990,163         4,389,086         3,431,385    
  Average diluted common shares outstanding     5,048,705     5,042,626     5,041,038     5,019,056     5,000,352         4,620,411         3,433,603    
                       
PERFORMANCE RATIOS                      
  Return on average assets *     0.87 %   0.71 %   0.63 %   0.59 %   0.83 %     0.84 %     0.50 %  
  Return on average common equity **  *     9.59 %   7.89 %   7.14 %   6.79 %   9.59 %     9.96 %     6.05 %  
  Net interest margin (fully-tax equivalent) *     3.60 %   3.73 %   3.61 %   3.79 %   3.74 %     3.73 %     3.80 %  
  Efficiency ratio (excluding merger expenses)     73.22 %   72.89 %   80.98 %   83.05 %   72.94 %     74.18 %     81.78 %  
  Efficiency ratio (excluding mortgage div/merger X)   64.39 %   67.83 %   71.95 %   75.06 %   73.29 %     71.72 %     71.73 %  
  # full-time equivalent employees - period end     177     187     190     192     190       192       189    
                       
CAPITAL                      
  Equity to period-end assets     9.25 %   9.08 %   8.88 %   8.72 %   8.72 %     8.72 %     7.75 %  
  Common tangible equity to assets     9.25 %   9.08 %   8.88 %   8.72 %   8.72 %     8.72 %     6.13 %  
  Tier 1 leverage capital ratio - Bank     10.10 %   9.94 %   9.74 %   9.71 %   9.65 %     9.71 %     9.11 %  
  Tier 1 risk-based capital ratio - Bank     12.35 %   12.20 %   12.62 %   12.09 %   11.66 %     12.09 %     11.42 %  
  Total risk-based capital ratio - Bank     13.98 %   13.82 %   14.40 %   13.81 %   13.90 %     13.81 %     13.67 %  
  Book value per common share $     13.00       12.71       12.45       12.18       12.04         12.18         12.13    
                       
ASSET QUALITY                      
  Net loan charge-offs (recoveries) $   (146 )   351     (97 )   1,495     (1,321 )       1,733         2,579    
  Net charge-offs (recoveries) to average loans *     -0.12 %   0.30 %   -0.08 %   1.29 %   -1.15 %     0.37 %     0.56 %  
  Allowance for loan losses $   5,764     5,618     5,969     5,872     7,567       5,872       6,520    
  Allowance for loan losses to loans held invst.     1.15 %   1.18 %   1.31 %   1.26 %   1.62 %     1.26 %     1.38 %  
  Nonperforming loans $     4,392       5,101       3,519       3,110       8,964         3,110         6,458    
  Performing restructured loans $   9,375     9,486     12,078     9,687     9,317       9,687       9,774    
  Other real estate owned $   3,914     4,212     4,587     4,592     5,073       4,592       5,610    
  Nonperforming loans to loans held for investment     0.87 %   1.07 %   0.77 %   0.67 %   1.92 %     0.67 %     1.37 %  
  Nonperforming assets to total assets     1.17 %   1.32 %   1.15 %   1.10 %   2.04 %     1.10 %     1.78 %  
                       
END OF PERIOD BALANCES                      
  Total assets $   708,890     706,495     705,704     700,798     688,974       700,798       679,263    
  Total loans held for investment $   503,226     476,783     455,139     465,804     465,889       465,804       472,189    
  Total deposits $   601,483     599,148     601,073     607,307     596,489       607,307       594,898    
  Stockholders' equity $   65,566     64,120     62,687     61,139     60,098       61,139       52,655    
                       
AVERAGE BALANCES                      
  Total assets $   712,919     706,633     702,473     692,522     684,917         689,842         664,812    
  Total earning assets $   669,231     663,082     657,915     646,158     633,304         643,031         620,996    
  Total loans held for investment $   494,502     470,021     466,301     463,285     459,538         465,163         462,870    
  Total non interest-bearing demand deposits $     146,848       141,092       129,367       125,279       119,074         118,355         94,618    
  Common stockholders' equity $   64,855     63,349     61,979     60,522     59,384         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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