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

Fourth Quarter and Annual 2016 Financial Highlights

  • Net income increased to $1,204,000, or $0.24 per diluted common share, in the fourth quarter of 2016 from $1,036,000, or $0.21 per diluted common share in the fourth quarter of 2015. 
  • Net income available to common shareholders decreased to $5,112,000, or $1.01 per diluted common share for the year ended December 31, 2016 from $5,426,000 or $1.17 per diluted common share in 2015.
  • Merger expenses of $819,000 in 2016 resulted in an after-tax reduction in net income of $718,000, or $0.14 per common share.
  • Book value per common share increased to $13.13 at December 31, 2016 from $12.18 at December 31, 2015.
  • Loans held for investment increased 0.75% during the fourth quarter of 2016 and 8.85% for the full year ended December 31, 2016.
  • Average non-interest bearing demand deposits increased 17.58% and 19.29% in the fourth quarter of 2016 and full year of 2016 from the same periods in 2015, respectively.
  • The net interest margin on a fully taxable basis decreased to 3.68% in the fourth quarter of 2016 and 3.66% for the full year of 2016 from 3.79% in the fourth quarter of 2015 and 3.73% for the full year of 2015; however net interest income on a fully taxable basis increased in both the fourth quarter and full year of 2016 from the same periods in 2015.
  • Nonperforming assets declined to $7,396,000, or 1.05% of assets, at December 31, 2016 from $7,702,000, or 1.10% of assets, at December 31, 2015.
  • Net loan loss charge-offs were $184,000 in 2016 compared to $1,733,000 in 2015.
  • The Commercial/Retail Bank segment which excludes the mortgage division and the holding company realized net income of $6,010,000 in 2016 compared to $4,487,000 in 2015. The increase in 2016 resulted from higher net interest income, a lower provision for loan losses, lower operating expenses, and higher gains from the origination and sale of SBA loans.
  • Carolina Bank Holdings, Inc. entered into a definitive merger agreement with First Bancorp (Nasdaq:FBNC) on June 21, 2016. CLBH stockholders are expected 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 8.85% growth in loans held for investment during 2016 and 19.29% increase in average non-interest-bearing deposits during 2016. We continued to improve our credit quality as evidenced by lower non-performing and classified assets and by a sharp reduction in loan charge-offs in 2016.”

“We are excited about our proposed merger with First Bancorp who shares our philosophy of delivering unparalleled service and financial solutions. As previously reported, our shareholders voted overwhelmingly for the merger at our special meeting of shareholders in December 2016. We are currently awaiting final regulatory approval and hope to close the merger in the first quarter of 2017,” 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.

Caution Regarding Forward-Looking Statements

This press release, in particular statements regarding the proposed transaction between Carolina Bank Holdings, Inc. and First Bancorp, the expected timetable for completing the transaction, and any other statements about Carolina Bank Holdings, Inc. or First Bancorp managements’ future expectations, beliefs, goals, plans or prospects, includes forward-looking statements that are based on certain beliefs and assumptions and reflect the current expectations of Carolina Bank Holdings, Inc., First Bancorp, and their respective management. Statements that are predictive in nature, that depend on or relate to future events or conditions, or that include words such as “believes,” “anticipates,” “expects,” “continues,” “predict,” “potential,” “contemplates,” “may,” “will,” “likely,” “could,” “should,” “estimates,” “intends,” “plans” and other similar expressions are forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Forward-looking statements involve known and unknown risks, assumptions and uncertainties that may cause actual results in future periods to differ materially from those projected or contemplated in the forward-looking statements, and you should not place undue reliance on these statements. Some of the factors that could cause actual results to differ materially from current expectations are: the ability to consummate the proposed transaction; any conditions imposed on the parties in connection with the consummation of the proposed transaction; the occurrence of any event, change or other circumstances that could give rise to the termination of the agreement relating to the proposed transaction; Carolina Bank Holdings, Inc.’s ability to maintain relationships with employees and third parties following announcement of the proposed transaction; the ability of the parties to satisfy the conditions to the closing of the proposed transaction; the risk that the proposed transaction may not be completed in the time frame expected by the parties or at all; and the risks that are described from time to time in Carolina Bank Holdings Inc.’s reports filed with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and on general industry and economic conditions. Carolina Bank Holdings, Inc. disclaims any intention or obligation to update or revise any 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. BEFORE MAKING ANY 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.

  Carolina Bank Holdings, Inc. and Subsidiary          
  Consolidated Balance Sheets           
          December 31,   December 31,  
          2016   2015  
           (unaudited)           
        (in thousands, except share data)
  Assets          
  Cash and due from banks   $ 4,913     $ 6,559    
  Interest-bearing deposits with banks     67,732       69,233    
  Bank term deposits     11,305       16,604    
  Securities available-for-sale, at fair value     37,491       47,360    
  Securities held-to-maturity (fair values of $13,774 in 2016 and $15,226 in 2015)   13,715       14,954    
  Loans held for sale     22,877       39,583    
  Loans       507,013       465,804    
  Less allowance for loan losses     (5,688 )     (5,872 )  
      Net loans     501,325       459,932    
  Premises and equipment, net     18,181       19,007    
  Other real estate owned     3,655       4,592    
  Bank-owned life insurance     12,212       11,843    
  Other assets     11,924       11,131    
      Total assets   $ 705,330     $ 700,798    
                 
  Liabilities and Stockholders' Equity          
  Deposits          
    Non-interest bearing demand   $ 140,329     $ 125,189    
    NOW, money market and savings     359,150       349,815    
    Time     98,632       132,303    
      Total deposits     598,111       607,307    
                 
  Advances from the Federal Home Loan Bank     12,073       2,681    
  Securities sold under agreements to repurchase     -       47    
  Subordinated debentures     19,610       19,610    
  Other liabilities and accrued expenses     9,221       10,014    
      Total liabilities     639,015       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 5,052,500 in 2016 and 5,021,330 in 2015     5,052       5,021    
    Additional paid-in capital     29,577       29,234    
    Retained earnings     31,286       26,174    
    Stock in directors' rabbi trust     (2,156 )     (1,831 )  
    Directors' deferred fees obligation     2,156       1,831    
    Accumulated other comprehensive income     400       710    
      Total stockholders’ equity     66,315       61,139    
      Total liabilities and stockholders’ equity   $ 705,330     $ 700,798    
                 

 

Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
 
    Three Months      Years Ended
    Ended December 31,     December 31,
    2016    2015     2016   2015
                             
  (in thousands, except per share data)
Interest income                            
Loans   $ 6,176   $ 6,235     $ 24,222   $ 24,314  
Investment securities, taxable     281     325       1,304     1,310  
Investment securities, non taxable     106     116       455     479  
Interest from deposits in banks     124     84       530     267  
Total interest income     6,687     6,760       26,511     26,370  
                             
Interest expense                            
NOW, money market, savings     239     240       939     953  
Time deposits     193     266       924     1,142  
Other borrowed funds     246     173       939     630  
Total interest expense     678     679       2,802     2,725  
                             
Net interest income     6,009     6,081       23,709     23,645  
Provision for loan losses     -     (200 )     -     1,085  
Net interest income after provision for loan losses     6,009     6,281       23,709     22,560  
Non-interest income                            
Service charges     314     313       1,230     1,232  
Mortgage banking income     1,995     2,206       9,110     12,054  
Gain on sale of SBA loans     -     14       498     134  
Other     84     58       295     223  
Total non-interest income     2,393     2,591       11,133     13,643  
                             
Non-interest expense                            
Salaries and benefits     4,439     4,351       17,655     17,784  
Occupancy and equipment     654     787       2,824     3,105  
Professional fees     336     761       1,715     2,138  
Outside data processing     328     270       1,159     1,079  
FDIC insurance     79     105       389     498  
Advertising and promotion     158     354       892     932  
Stationery, printing and supplies     127     135       560     582  
Merger expense     80     -       819     -  
Other     490     513       1,685     1,816  
Total non-interest expense     6,691     7,276       27,698     27,934  
                             
Income before income taxes     1,711     1,596       7,144     8,269  
Income tax expense     507     560       2,032     2,502  
Net income     1,204     1,036       5,112     5,767  
Dividends and accretion on preferred stock     -     -       -     341  
Net income available to common stockholders   $ 1,204   $ 1,036     $ 5,112   $ 5,426  
Net income per common share                            
Basic   $ 0.24   $ 0.21     $ 1.01   $ 1.24  
Diluted   $ 0.24   $ 0.21     $ 1.01   $ 1.17  
                             
Carolina Bank Holdings, Inc.      
Consolidated Financial Highlights       
Fourth  Quarter 2016      
(unaudited)      
      Quarterly    Years Ended
      4th Qtr 3rd Qtr 2nd Qtr 1st Qtr 4th Qtr        
($ in thousands except for share and per share data)     2016 2016 2016 2016 2015   2016   2015
                       
EARNINGS                      
Net interest income   $ 6,009   5,900   6,029   5,771   6,081     23,709     23,645  
Provision for loan losses   $ -   -   -   -   (200 )   -     1,085  
Non-interest income   $ 2,393   3,182   3,269   2,289   2,591     11,133     13,643  
Non-interest expense   $ 6,691   6,923   7,454   6,630   7,276     27,698     27,934  
Net income   $ 1,204   1,564   1,243   1,101   1,036     5,112     5,767  
Net income available to common stockholders   $ 1,204   1,564   1,243   1,101   1,036     5,112     5,426  
Basic earnings per common share   $ 0.24   0.31   0.25   0.22   0.21     1.01     1.24  
Diluted earnings per common share   $ 0.24   0.31   0.25   0.22   0.21     1.01     1.17  
Average common shares outstanding     5,047,581   5,044,646   5,038,723   5,036,150   5,008,301     5,041,799     4,389,086  
Average diluted common shares outstanding     5,049,301   5,048,705   5,042,626   5,041,038   5,019,056     5,045,437     4,620,411  
                       
PERFORMANCE RATIOS                      
Return on average assets *     0.67 % 0.87 % 0.71 % 0.63 % 0.59 %   0.72 %   0.84 %
Return on average common equity  *     7.26 % 9.59 % 7.89 % 7.14 % 6.79 %   7.98 %   9.73 %
Net interest margin (fully-tax equivalent) *     3.68 % 3.60 % 3.73 % 3.61 % 3.79 %   3.66 %   3.73 %
Efficiency ratio (excluding merger expenses)     77.18 % 73.22 % 72.89 % 80.98 % 83.05 %   75.88 %   74.18 %
Efficiency ratio (excluding mortgage div/merger X)     67.65 % 64.39 % 67.83 % 71.95 % 75.06 %   67.92 %   71.72 %
# full-time equivalent employees - period end     165   177   187   190   192     165     192  
                       
CAPITAL                      
Equity to period-end assets     9.40 % 9.25 % 9.08 % 8.88 % 8.72 %   9.40 %   8.72 %
Common tangible equity to assets     9.40 % 9.25 % 9.08 % 8.88 % 8.72 %   9.40 %   8.72 %
Tier 1 leverage capital ratio - Bank     10.30 % 10.10 % 9.94 % 9.74 % 9.71 %   10.30 %   9.71 %
Tier 1 risk-based capital ratio - Bank     12.80 % 12.35 % 12.20 % 12.62 % 12.09 %   12.80 %   12.09 %
Total risk-based capital ratio - Bank     14.12 % 13.98 % 13.82 % 14.40 % 13.81 %   14.12 %   13.81 %
Book value per common share   $ 13.13   13.00   12.71   12.45   12.18     13.13     12.18  
                       
ASSET QUALITY                      
Net loan charge-offs (recoveries)   $ 76   (146 ) 351   (97 ) 1,495     184     1,733  
Net charge-offs (recoveries) to average loans *     0.06 % -0.12 % 0.30 % -0.08 % 1.29 %   0.04 %   0.37 %
Allowance for loan losses   $ 5,688   5,764   5,618   5,969   5,872     5,688     5,872  
Allowance for loan losses to loans held invst.     1.12 % 1.15 % 1.18 % 1.31 % 1.26 %   1.12 %   1.26 %
Nonperforming loans   $ 3,741   4,392   5,101   3,519   3,110     3,741     3,110  
Performing restructured loans   $ 9,424   9,375   9,486   12,078   9,687     9,424     9,687  
Other real estate owned   $ 3,655   3,914   4,212   4,587   4,592     3,655     4,592  
Nonperforming loans to loans held for investment     0.74 % 0.87 % 1.07 % 0.77 % 0.67 %   0.74 %   0.67 %
Nonperforming assets to total assets     1.05 % 1.17 % 1.32 % 1.15 % 1.10 %   1.05 %   1.10 %
                       
END OF PERIOD BALANCES                      
Total assets   $ 705,330   708,890   706,495   705,704   700,798     705,330     700,798  
Total loans held for investment   $ 507,013   503,226   476,783   455,139   465,804     507,013     465,804  
Total deposits   $ 598,111   601,483   599,148   601,073   607,307     598,111     607,307  
Stockholders' equity   $ 66,315   65,566   64,120   62,687   61,139     66,315     61,139  
                       
AVERAGE BALANCES                      
Total assets   $ 711,969   712,919   706,633   702,473   692,522     708,520     689,842  
Total earning assets   $ 666,488   669,231   663,082   657,915   646,158     664,200     643,031  
Total loans held for investment   $ 503,185   494,502   470,021   466,301   463,285     483,586     465,163  
Total non interest-bearing demand deposits   $ 147,303   146,848   141,092   129,367   125,279     141,185     118,355  
Common stockholders' equity   $ 66,018   64,855   63,349   61,979   60,522     64,058     54,479  
                       
* annualized for all periods presented                      
                        
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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