Carolina Bank Holdings, Inc. Reports a 55.6% Increase in First Quarter EPS to $0.42

Carolina Bank Holdings, Inc. Reports a 55.6% Increase in First Quarter EPS to
$0.42

GREENSBORO, N.C., April 29, 2013 (GLOBE NEWSWIRE) -- Carolina Bank Holdings,
Inc. (Nasdaq:CLBH) today reported first quarter 2013 results with highlights
as follows:

First Quarter 2013 Financial Highlights

  oDiluted net income per common share increased 55.6% to $0.42 in the first
    quarter of 2013 from $0.27 in the first quarter of 2012.
  oNet income for the first quarter of 2013 was $1,718,000, an increase of
    39.9% from net income of $1,228,000 reported in the first quarter of 2012.
  oNet income available to common shareholders was $1,413,000 in the first
    quarter of 2013 compared to $926,000 in the first quarter of 2012.
  oThe net interest margin, computed on a fully taxable basis, decreased to
    3.94% in the first quarter of 2013 compared to 3.98% in the first quarter
    of 2012.
  oMortgage banking revenues increased 22.9% to $3,895,000 in the first
    quarter of 2013 from $3,169,000 in the first quarter of 2012.
  oCarolina Bank, the subsidiary of Carolina Bank Holdings, Inc., continued
    to maintain 'Well Capitalized' status, the highest regulatory capital
    measure. Capital ratios at March 31, 2013 for Carolina Bank improved to
    9.34% for Tier 1 leverage, 12.23% for Tier 1 risk-based, and 15.28% for
    total risk-based.
  oAverage non-interest-bearing demand deposits increased 34.0% in the first
    quarter of 2013 from the same quarter in 2012.
  oNet loan charge-offs declined to $105,000, or 0.09% of average loans
    (annualized), in the first quarter of 2013 from $762,000, or 0.64% of
    average loans (annualized), in the first quarter of 2012.
  oNon-performing assets to total assets decreased to 2.72% at March 31, 2013
    from 4.62% at March 31, 2012

"We continued our goal of building shareholder value in 2013 by increasing net
income and by strengthening our relationships with customers despite a
challenging lending environment," said President and Chief Executive Officer
Robert T. Braswell. "Average loans declined during the first quarter of 2013
due to irrational terms being offered by some of our competitors and
lackluster demand by borrowers, but we continued our focus on increasing our
commercial relationships as evidenced by a 34% increase in average
non-interest-bearing demand deposits in the first quarter of 2013 from the
first quarter of last year."

"We expanded our residential mortgage operation in Raleigh in the first
quarter of 2013 and are pleased to report that our residential mortgage
division experienced higher originations and increased profitability in the
first quarter of 2013 over the first quarter of 2012. The mortgage division
experienced slowing originations and lower profitability on a sequential
quarter basis due to reduced refinancing activity by borrowers."

"We are continuing our focus in reducing non-performing assets in 2013 and are
pleased that loan charge-offs and non-performing assets declined substantially
in 2013," said Braswell. "Our provision for loan losses declined to $400,000
in the first quarter of 2013 from $1,460,000 in the first quarter of 2012 due
to the improvement in the quality of our loan portfolio, reduced loan
charge-offs, and lower loan balances."

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.
Residential mortgage loan production offices are located in Burlington,
Hillsborough, and Raleigh 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.

Carolina Bank Holdings, Inc. and Subsidiary                                
Consolidated Balance Sheets                                               
                                                                         
                                        March 31,        December 31,     
                                         2013             2012
                                        (unaudited)                      
                                        (in thousands, except share data)  
Assets                                                                   
Cash and due from banks                  $6,613         $7,913         
Interest-bearing deposits with banks     72,243          7,186           
Securities available-for-sale, at fair   46,931          42,036           
value
Securities held-to-maturity              --              211              
Loans held for sale                      77,440          131,762          
Loans                                   431,754         461,728          
Less allowance for loan losses           (10,239)        (9,944)          
Net loans                               421,515         451,784          
Premises and equipment, net              17,551          17,732           
Other real estate owned                  7,555           5,940            
Bank-owned life insurance                10,858          10,765           
Other assets                             14,058          16,539           
Total assets                             $674,764       $691,868       
                                                                        
Liabilities and Stockholders' Equity                                     
Deposits                                                                 
Non-interest bearing demand              $74,432        $73,032        
NOW, money market and savings            338,133         343,740          
Time                                     173,389         174,153          
Total deposits                           585,954         590,925          
                                                                        
Advances from the Federal Home Loan Bank 2,958           15,982           
Securities sold under agreements to      3,112           1,950            
repurchase
Subordinated debentures                  19,582          19,563           
Other liabilities and accrued expenses   7,769           9,586            
Total liabilities                        619,375         638,006          
                                                                        
Stockholders' equity                                                     
Preferred stock, no par value,
authorized 1,000,000 shares; issued and  15,677          15,573           
outstanding 16,000 shares
Common stock, $1 par value; authorized
20,000,000 shares; issued and            3,389           3,387            
outstanding 3,388,773 in 2013 and
3,387,045 in 2012
Common stock warrants                    1,841           1,841            
Additional paid-in capital               15,917          15,906           
Retained earnings                       16,822          15,408           
Stock in directors' rabbi trust          (1,128)         (1,050)          
Directors' deferred fees obligation      1,128           1,050            
Accumulated other comprehensive income  1,743           1,747            
Total stockholders' equity               55,389          53,862           
Total liabilities and stockholders'      $674,764       $691,868       
equity



Carolina Bank Holdings, Inc. and Subsidiary
Consolidated Statements of Income (unaudited)
                                        
                                        Three Months
                                         Ended March31,
                                        2013               2012
                                        (in thousands, except per share data)
Interest income                                            
Loans                                    $6,719           $7,085
Investment securities, taxable           248               306
Investment securities, non taxable       106               107
Interest from deposits in banks          18                10
Total interest income                    7,091             7,508
                                                          
Interest expense                                           
NOW, money market, savings               320               548
Time deposits                            520               709
Other borrowed funds                     188               202
Total interest expense                   1,028             1,459
                                                          
Net interest income                      6,063             6,049
Provision for loan losses                400               1,460
Net interest income after provision for  5,663             4,589
loan losses
Non-interest income                                        
Service charges                          252               283
Mortgage banking income                  3,895             3,169
Gain on sale of investment securities    22                --
available-for-sale
Other                                    145               167
Total non-interest income                4,314             3,619
                                                          
Non-interest expense                                       
Salaries and benefits                    4,748             4,030
Occupancy and equipment                  747               682
Foreclosed property expense              331               399
Professional fees                        186               257
Outside data processing                  259               206
FDIC insurance                           169               215
Advertising and promotion                206               175
Stationery, printing and supplies        153               135
Other                                    583               411
Total non-interest expense               7,382              6,510
                                                          
Income before income taxes               2,595             1,698
Income tax expense                      877               470
Net income                              1,718             1,228
Dividends and accretion on preferred     305               302
stock
Net income available to common           $1,413           $926
stockholders
Net income per common share                                
Basic                                    $0.42            $0.27
Diluted                                  $0.42            $0.27



Carolina Bank Holdings, Inc.
Consolidated Financial Highlights
First Quarter 2013
(unaudited)
                Quarterly                                         Years Ended
($ in thousands  1st Qtr    4th Qtr   3rd Qtr   2nd Qtr   1st Qtr
except for share 2013       2012      2012      2012      2012      2012      2011
data)
                                                                       
EARNINGS                                                                
Net interest     $6,063   6,351     5,848     5,939     6,049     24,187   24,095
income
Provision for    $400     300       600       --       1,460     2,360    6,850
loan loss
NonInterest      $4,314   5,655     5,568     4,806     3,619     19,650   11,182
income
NonInterest      $7,382   8,323     8,085     7,323     6,510     30,243   25,473
expense
Net income       $1,718   2,187     1,819     2,268     1,228     7,502    2,397
Net income
available to     $1,413   1,884     1,505     1,961     926       6,276    1,223
common
stockholders
Basic earnings   $0.42    0.56      0.44      0.58      0.27      1.85     0.36
per share
Diluted earnings $0.42    0.55      0.44      0.58      0.27      1.85     0.36
per share
Average common
shares           3,387,813  3,387,045 3,387,045 3,387,045 3,387,045 3,387,045 3,387,045
outstanding
Average diluted
common shares    3,398,070  3,420,396 3,387,045 3,387,045 3,387,045 3,395,383 3,387,045
outstanding
                                                                       
PERFORMANCE                                                             
RATIOS
Return on        0.84%      1.11%     0.89%     1.18%     0.56%     0.93%     0.18%
average assets *
Return on
average common   14.68%     19.99%    16.75%    23.44%    11.58%    18.05%    4.03%
equity *
Net interest
margin           3.94%      4.01%     3.71%     3.86%     3.98%     3.89%     3.92%
(fully-tax
equivalent) *
Efficiency ratio 70.78%     69.02%    70.55%    67.84%    66.97%    68.68%    71.66%
# full-time
equivalent       215        208       206       200       184       208       174
employees -
period end
                                                                       
CAPITAL                                                                 
Equity to
period-end       8.21%      7.79%     7.68%     7.40%     7.18%     7.79%     6.91%
assets
Common tangible  5.89%      5.53%     5.39%     5.13%     4.89%     5.53%     4.66%
equity to assets
Tier 1 leverage
capital ratio -  9.34%      9.23%     9.00%     8.79%     8.35%     9.23%     8.02%
Bank
Tier 1
risk-based       12.23%     11.27%    11.14%    11.12%    9.92%     11.27%    9.60%
capital ratio -
Bank
Total risk-based
capital ratio -  15.28%     14.18%    14.09%    14.12%    12.83%    14.18%    12.50%
Bank
Book value per   $11.72   11.30    10.75    10.27    9.65     11.30    9.26
common share
                                                                       
ASSET QUALITY                                                           
Net charge-offs  $105     1,080     988       1,379     762       4,209    7,416
Net charge-offs
to average loans 0.09%      0.95%     0.86%     1.18%     0.64%     0.90%     1.49%
*
Allowance for    $10,239  9,944     10,725    11,112    12,491    9,944     11,793
loan losses
Allowance for
loan losses to   2.37%      2.15%     2.33%     2.42%     2.60%     2.15%     2.42%
loans held
invst.
Nonperforming    $10,806  13,067   21,387   21,771   23,187   13,067   22,915
loans
Performing
restructured     $14,391  13,822    11,192    12,207    15,728    13,822    18,502
loans
Other real       $7,555   5,940     4,751     6,384     7,708     5,940     6,728
estate owned
Nonperforming
loans to loans   2.50%      2.83%     4.66%     4.74%     4.82%     2.83%     4.71%
held for
investment
Nonperforming
assets to total  2.72%      2.75%     3.87%     4.16%     4.62%     2.75%     4.40%
assets
                                                                       
END OF PERIOD                                                           
BALANCES
Total assets     $674,764 691,868   675,746   677,476   668,009   691,868   673,325
Total loans held $431,754 461,728   459,323   459,144   480,888   461,728   487,031
for investment
Total deposits   $585,954 590,925   588,672   592,103   588,500   590,925   596,639
Stockholders'    $55,389  53,862    51,879    50,143    47,943    53,862    46,558
equity
                                                                       
AVERAGE BALANCES                                                        
Total assets     $678,373 675,573   675,569   670,339   663,932   671,376   668,753
Total earning    $629,687 635,170   631,347   624,183   616,101   626,736   621,889
assets
Total loans held $449,704 456,738   459,800   466,412   479,121   465,478   498,683
for investment
Total
interest-bearing $512,562 519,595   527,545   528,463   529,405   526,237   542,402
deposits
Common
stockholders'    $39,044  37,487    35,750    33,649    32,159    34,778    30,337
equity
                                                                       
* annualized for all periods presented
 return on average assets and on average common equity are computed using net income
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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