Carolina Bank Holdings, Inc. Reports Third Quarter Earnings Increased 124% to $1,819,000

Carolina Bank Holdings, Inc. Reports Third Quarter Earnings Increased 124% to
$1,819,000

GREENSBORO, N.C., Oct. 31, 2012 (GLOBE NEWSWIRE) -- Carolina Bank Holdings,
Inc. (Nasdaq:CLBH) today reported third quarter 2012 results with highlights
as follows:

Third Quarter 2012 Financial Highlights

  oNet income for the third quarter of 2012 was $1,819,000 compared to
    $812,000 in the third quarter of 2011.
  oDiluted net income per common share increased to $0.44 in the third
    quarter of 2012 from $0.15 in the third quarter of 2011.
  oNet income available to common shareholders was $1,505,000 in the third
    quarter of 2012 compared to $520,000 in the third quarter of 2011.
  oNet income available to common shareholders was $4,392,000 in the first
    nine months of 2012, or $1.30 per common share, compared to $494,000, or
    $0.15 per common share, in the first nine months of 2011.
  oThe net interest margin, computed on a fully taxable basis, decreased to
    3.71% in the third quarter of 2012 compared to 3.89% in the third quarter
    of 2011.
  oMortgage banking income gross revenues increased to $5,576,000 in the
    third quarter of 2012 from $2,964,000 in the third quarter of 2011.
  oCarolina Bank, the subsidiary of Carolina Bank Holdings, Inc., continued
    to maintain 'Well Capitalized' status, the highest regulatory capital
    measure. Capital ratios at September 30, 2012 for Carolina Bank improved
    to 9.00% for Tier 1 leverage, 11.14% for Tier 1 risk-based, and 14.09% for
    total risk-based.
  oAverage non-interest-bearing demand deposits increased 24.6% in the first
    nine months of 2012 from the first nine months in 2011.

Robert T. Braswell, President and CEO of Carolina Bank Holdings, Inc.
commented, "We are pleased to report strong net income and earnings per share
for the third quarter. Our financial results reflect improved credit quality
and strong results by our mortgage division. While the continued low interest
rate environment negatively impacted our net interest margin during the
quarter, our mortgage division experienced record originations and revenues
during the third quarter of 2012."

Non-performing loans to total loans held for investment decreased to 4.66% at
September 30, 2012 from 4.99% at September 30, 2011. Non-performing assets to
total assets decreased to 3.87% at September 30, 2012 from 5.06% at September
30, 2011. Both of these ratios improved from the previous quarter. Braswell
commented, "We continue to focus on improving asset quality and resolving
several long standing credit challenges."

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 and
mortgage loan production offices in Burlington, Raleigh, and Hillsborough. 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,
                                                   2012          2011
                                                   (unaudited)   
                                                   
Assets                                                           
Cash and due from banks                             $5,947      $5,664
Interest-bearing deposits with banks                32,074       7,647
Securities available-for-sale, at fair value        45,197        42,208
Securities held-to-maturity                         226           392
Loans held for sale                                 95,711        91,955
Loans                                               459,323       487,031
Less allowance for loan losses                      (10,725)      (11,793)
Net loans                                           448,598       475,238
Premises and equipment, net                         17,419        17,442
Other real estate owned                             4,751         6,728
Bank-owned life insurance                           10,670        10,385
Other assets                                        15,153        15,666
Total assets                                        $675,746    $673,325
                                                                
Liabilities and Stockholders' Equity                             
Deposits                                                         
Non-interest bearing demand                         $62,924     $57,475
NOW, money market and savings                       335,114       324,449
Time                                                190,634       214,715
Total deposits                                      588,672       596,639
                                                                
Advances from the Federal Home Loan Bank            3,006         3,075
Securities sold under agreements to repurchase      3,688         1,536
Subordinated debentures                             19,545        19,489
Other liabilities and accrued expenses              8,956         6,028
Total liabilities                                   623,867       626,767
                                                                
Stockholders' equity                                             
Preferred stock, no par value, authorized 1,000,000
shares; issued and outstanding 16,000 shares in     15,471        15,177
2012 and 2011
Common stock, $1 par value; authorized 20,000,000
shares; issued and outstanding 3,387,045 in 2012    3,387         3,387
and 2011
Common stock warrants                               1,841         1,841
Additional paid-in capital                          15,897        15,870
Retained earnings                                   13,524        9,132
Stock in directors' rabbi trust                     (975)         (875)
Directors' deferred fees obligation                 975           875
Accumulated other comprehensive income              1,759         1,151
Total stockholders' equity                          51,879        46,558
Total liabilities and stockholders' equity          $675,746    $673,325
                                                                


Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
                                      Three Months        Nine Months
                                      Ended September 30, Ended September 30,
                                      2012      2011      2012      2011
                                      (in thousands, except per share data)
Interest income                                                   
Loans                                  $ 6,659  $ 7,153  $ 20,631 $ 21,202
Investment securities, taxable         303      333      922      1,094
Investment securities, non taxable     89       124      296      433
Interest from deposits in banks        37       22       68       70
Total interest income                  7,088    7,632    21,917   22,799
                                                                 
Interest expense                                                  
NOW, money market, savings             421      630      1,490    1,928
Time deposits                          620      822      1,993    2,654
Other borrowed funds                   199      189      598      564
Total interest expense                 1,240    1,641    4,081    5,146
                                                                 
Net interest income                    5,848    5,991    17,836   17,653
Provision for loan losses              600      1,800    2,060    5,150
Net interest income after provision    5,248    4,191    15,776   12,503
for loan losses
Non-interest income                                               
Service charges                        251      300      852      787
Mortgage banking income                5,576    2,964    13,392   6,668
Gain on sale of investment securities  --       28       --       239
available-for-sale
Loss on sale of other real estate      (312)    (217)    (266)    (164)
owned
Other                                  145      109      458      384
Total non-interest income              5,660    3,184    14,436   7,914
                                                                 
Non-interest expense                                              
Salaries and benefits                  4,628    3,450    13,062   9,607
Occupancy and equipment                670      627      2,029    1,823
Professional fees                      299      221      819      703
Outside data processing                220      227      641      627
FDIC insurance                         217      98       639      817
Advertising and promotion              166      180      546      410
Stationery, printing and supplies      162      169      464      442
Impairment of other real estate owned  588      576      1,194    1,999
Other real estate owned expense        218      274      643      883
Other                                  1,009    540      2,324    1,543
Total non-interest expense             8,177    6,362    22,361   18,854
                                                                 
Income before income taxes             2,731    1,013    7,851    1,563
Income tax expense                     912      201      2,536    197
Net income                             1,819    812      5,315    1,366
Dividends and accretion on preferred   314      292      923      872
stock
Net income available to common         $ 1,505  $520    $4,392  $494
stockholders
                                                                 
Net income per common share                                       
Basic                                  $0.44   $0.15   $1.30   $0.15
Diluted                                $0.44   $0.15   $1.30   $0.15

                                                                           
                                                                           
Carolina Bank Holdings, Inc.                                                
Consolidated Financial Highlights                                           
Third Quarter 2012                                                          
(unaudited)                                                                 
                Quarterly                                         Years Ended
                3rd Qtr   2nd Qtr   1st Qtr   4th Qtr   3rd Qtr.           
($ in thousands
except for share 2012      2012      2012      2011      2011      2011      2010
data)
                                                                      
EARNINGS                                                               
Net interest     $ 5,848   5,939     6,049     6,442     5,991     24,095   23,341
income
Provision for    $ 600     0         1,460     1,700     1,800     6,850    15,133
loan loss
NonInterest      $ 5,660   4,976     3,800     3,426     3,184     11,340   13,375
income
NonInterest      $ 8,177   7,493     6,691     6,777     6,362     25,631   26,061
expense
Net income       $ 1,819   2,268     1,228     1,031     812       2,397    (2,394)
Net income
available to     $ 1,505   1,961     926       729       520       1,223    (3,536)
common
stockholders
Basic earnings   $ 0.44    0.58      0.27      0.22      0.15      0.36     (1.04)
(loss) per share
Diluted earnings $ 0.44    0.58      0.27      0.22      0.15      0.36     (1.04)
(loss) per share
Average common
shares           3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045
outstanding
Average diluted
common shares    3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045
outstanding
                                                                      
PERFORMANCE                                                            
RATIOS
Return on        0.89%     1.18%     0.56%     0.43%     0.31%     0.18%     -0.51%
average assets *
Return on
average common   16.75%    23.44%    11.58%    9.31%     6.80%     4.03%     -11.08%
equity *
Net interest
margin           3.71%     3.86%     3.98%     4.14%     3.89%     3.92%     3.63%
(fully-tax
equivalent) *
Efficiency ratio 70.78%    68.34%    67.57%    68.28%    68.89%    71.79%    70.38%
# full-time
equivalent       206       200       184       174       167      174       155
employees -
period end
                                                                      
CAPITAL                                                                
Equity to
period-end       7.68%     7.40%     7.18%     6.91%     6.90%     6.91%     6.54%
assets
Common tangible  5.40%     5.13%     4.89%     4.66%     4.63%     4.66%     4.36%
equity to assets
Tier 1 leverage
capital ratio -  9.00%     8.79%     8.35%     8.02%     8.15%     8.02%     7.59%
Bank
Tier 1
risk-based       11.14%    11.12%    9.92%     9.60%     9.64%     9.60%     9.00%
capital ratio -
Bank
Total risk-based
capital ratio -  14.09%    14.12%    12.83%    12.50%    12.53%    12.50%    11.82%
Bank
Book value per   $ 10.75  10.27    9.65     9.26     9.03     9.26      8.70
common share
                                                                      
ASSET QUALITY                                                          
Net charge-offs  $ 988     1,379     762       1,956     3,190    7,416    12,855
Net charge-offs
to average loans 0.86%     1.18%     0.64%     1.60%     2.58%     1.49%     2.43%
*
Allowance for    $ 10,725  11,112    12,491    11,793    12,049    11,793    12,359
loan losses
Allowance for
loan losses to   2.33%     2.42%     2.60%     2.42%     2.46%     2.42%     2.40%
loans held
invst.
Nonperforming    $ 21,387 21,771   23,187   22,915   24,429    22,915   27,713
loans
Performing
restructured     $ 11,192  12,207    15,728    18,502    18,167    18,502    4,791
loans
Other real       $ 4,751   6,384     7,708     6,728     8,972     6,728     9,848
estate owned
Nonperforming
loans to loans   4.66%     4.74%     4.82%     4.71%     4.99%     4.71%     5.39%
held for
investment
Nonperforming
assets to total  3.87%     4.16%     4.62%     4.40%     5.06%     4.40%     5.55%
assets
                                                                      
END OF PERIOD                                                          
BALANCES
Total assets     $ 675,746 677,476   668,009   673,325   661,784   673,325   676,701
Total loans held $ 459,323 459,144   480,888   487,031   489,782   487,031   514,029
for investment
Total deposits   $ 588,672 592,103   588,500   596,639   585,184   596,639   604,567
Stockholders'    $ 51,879  50,143    47,943    46,558    45,696    46,558    44,282
equity
                                                                      
AVERAGE BALANCES                                                       
Total assets     $ 675,569 670,339   663,932   670,436   664,373   668,753   695,847
Total earning    $ 631,347 624,183   616,101   623,176   617,852   621,889   650,926
assets
Total loans held $ 459,800 466,412   479,121   489,915   494,669   498,683   529,415
for investment
Total
interest-bearing $ 527,545 528,463   529,405   537,287   534,140   542,402   578,815
deposits
Common
stockholders'    $ 35,750  33,649    32,159    31,052    30,328    30,337    31,924
equity
                                                                      
* 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.
         T. Allen Liles, EVP and CFO
         Telephone: 336-286-8746
         Email: a.liles@carolinabank.com
 
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