Carolina Bank Holdings Inc. (CLBH, Financial) filed Quarterly Report for the period ended 2009-03-31.
CAROLINA BANK HOLDING specializes in lending to entrepreneur-owned businesses and professional associations. Carolina Bank offers an array of value-priced banking products and a seasoned professional corps of commercial bankers. A hallmark of the bank is fast responsive decision-making. Customers may access their accounts with a 24-hour telephone banking system and though the Internet. The bank provides customers free ATM access by rebating foreign ATM transaction costs. Carolina Bank Holdings Inc. has a market cap of $14.5 million; its shares were traded at around $4.25 with a P/E ratio of 7.7 and P/S ratio of 0.4. Carolina Bank Holdings Inc. had an annual average earning growth of 17% over the past 5 years.
Liabilities. Total deposits increased by $23.4 million, or 4.7%, from $498.1 million at December 31, 2008, to $521.4 million at March 31, 2009. NOW, money market and savings accounts increased $44.7 million while time deposits declined $19.6 million during the quarter. We plan to continue our efforts to gain deposits through quality service, convenient locations, and competitive pricing. Our continued branching activities are designed to enhance customer convenience and related deposit gathering activities as well as provide new sources for loans. While deposit growth is an ongoing goal, wholesale sources of funding such as Federal Home Loan Bank advances and repurchase borrowings, may be utilized where cost beneficial and when necessary to meet liquidity requirements. Federal Home Loan Bank advances declined $20.0 million during the first quarter to $36.8 million at March 31, 2009. We had approximately $28.3 million in out-of-market time deposits from other institutions and $47.0 million in brokered time deposits at March 31, 2009, an increase of $13.8 million in these two types of accounts from December 31, 2008.
General. Net income for first quarter of 2009 was $665,000 compared to $702,000 in the first quarter of 2008. Net income available to common stockholders for the three months ended March 31, 2009 and 2008, amounted to $411,000, or $0.12 per diluted share and $702,000, or $0.21 per diluted share, respectively. Net income available to common stockholders represents net income less preferred stock dividends and related discount accretion. The decrease in net income available to common shareholders was primarily due to a higher provision for loan losses as credit conditions deteriorated in our markets during the first quarter of 2009.
Non-interest income. Total non-interest income amounted to $2,402,000 for the three months ended March 31, 2009, as compared to $857,000 for the three months ended March 31, 2008. The increase in 2009 was primarily attributable to additional mortgage banking income of $1,235,000 which was mostly generated by the wholesale mortgage division. The wholesale mortgage division has expanded rapidly to keep up with strong home mortgage demand during this period of low interest rates. Gains on the sale of investments were $235,000 during the first quarter of 2009, and service charges and other non-interest income experienced growth in excess of 25% from the first quarter of 2008.
Our allowance for loan losses is composed of two parts, a specific portion related to non-performing and problem loans and a general section related to performing loans. The specific portion of our allowance for loan losses, which relates to non-performing loans, increased to $1,614,000 at March 31, 2009 from $840,000 at December 31, 2008 as the level of non-performing loans increased $6,546,000 during the quarter. The general section of our allowance for loan losses was $5,135,000 at March 31, 2009 and $4,920,000 at December 31, 2008. These reserves apply to performing loans and were determined by applying estimated loss ratios inherent in the loan portfolio, ranging from 0.40% on residential real estate loans to 10.00% on unsecured consumer revolving loans, to categories of performing loans at each period end. The general section also includes allowances for watch list loans which are still performing but carry a higher degree of risk because of declining credit factors.
In the normal course of business there are outstanding commitments for the extension of credit which are not reflected in the financial statements. At March 31, 2009 and December 31, 2008, pre-approved but unused lines of credit for loans totaled approximately $113,358,000 and $108,650,000, respectively. In addition, we had $10,095,000 and $7,289,000 in standby letters of credit at March 31, 2009 and December 31, 2008, respectively. These commitments represent no more than the normal lending risk that we commit to borrowers. If these commitments are drawn, we will obtain collateral if it is deemed necessary based on our credit evaluation of the counter-party. We believe these commitments can be funded through normal operations.
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CAROLINA BANK HOLDING specializes in lending to entrepreneur-owned businesses and professional associations. Carolina Bank offers an array of value-priced banking products and a seasoned professional corps of commercial bankers. A hallmark of the bank is fast responsive decision-making. Customers may access their accounts with a 24-hour telephone banking system and though the Internet. The bank provides customers free ATM access by rebating foreign ATM transaction costs. Carolina Bank Holdings Inc. has a market cap of $14.5 million; its shares were traded at around $4.25 with a P/E ratio of 7.7 and P/S ratio of 0.4. Carolina Bank Holdings Inc. had an annual average earning growth of 17% over the past 5 years.
Highlight of Business Operations:
Assets. Our total assets increased by $17.2 million, or 2.8%, from $616.6 million at December 31, 2008, to $633.8 million at March 31, 2009. During the three month period ended March 31, 2009, cash and due from banks increased slightly and investment securities declined by 12.6%. Loans held for sale increased 60.7% during the quarter to $30.8 million at March 31, 2009 due to strong originations by our wholesale loan division. Loans held for investment increased by $12.8 million or 2.6% during the first quarter of 2009. We continue to experience good commercial and consumer loan demand in our primary lending markets, Guilford, Randolph, Alamance and Forsyth Counties, North Carolina. The rate of growth in loans held for investment slowed during the first quarter of 2009, primarily due to a more challenging credit environment.Liabilities. Total deposits increased by $23.4 million, or 4.7%, from $498.1 million at December 31, 2008, to $521.4 million at March 31, 2009. NOW, money market and savings accounts increased $44.7 million while time deposits declined $19.6 million during the quarter. We plan to continue our efforts to gain deposits through quality service, convenient locations, and competitive pricing. Our continued branching activities are designed to enhance customer convenience and related deposit gathering activities as well as provide new sources for loans. While deposit growth is an ongoing goal, wholesale sources of funding such as Federal Home Loan Bank advances and repurchase borrowings, may be utilized where cost beneficial and when necessary to meet liquidity requirements. Federal Home Loan Bank advances declined $20.0 million during the first quarter to $36.8 million at March 31, 2009. We had approximately $28.3 million in out-of-market time deposits from other institutions and $47.0 million in brokered time deposits at March 31, 2009, an increase of $13.8 million in these two types of accounts from December 31, 2008.
General. Net income for first quarter of 2009 was $665,000 compared to $702,000 in the first quarter of 2008. Net income available to common stockholders for the three months ended March 31, 2009 and 2008, amounted to $411,000, or $0.12 per diluted share and $702,000, or $0.21 per diluted share, respectively. Net income available to common stockholders represents net income less preferred stock dividends and related discount accretion. The decrease in net income available to common shareholders was primarily due to a higher provision for loan losses as credit conditions deteriorated in our markets during the first quarter of 2009.
Non-interest income. Total non-interest income amounted to $2,402,000 for the three months ended March 31, 2009, as compared to $857,000 for the three months ended March 31, 2008. The increase in 2009 was primarily attributable to additional mortgage banking income of $1,235,000 which was mostly generated by the wholesale mortgage division. The wholesale mortgage division has expanded rapidly to keep up with strong home mortgage demand during this period of low interest rates. Gains on the sale of investments were $235,000 during the first quarter of 2009, and service charges and other non-interest income experienced growth in excess of 25% from the first quarter of 2008.
Our allowance for loan losses is composed of two parts, a specific portion related to non-performing and problem loans and a general section related to performing loans. The specific portion of our allowance for loan losses, which relates to non-performing loans, increased to $1,614,000 at March 31, 2009 from $840,000 at December 31, 2008 as the level of non-performing loans increased $6,546,000 during the quarter. The general section of our allowance for loan losses was $5,135,000 at March 31, 2009 and $4,920,000 at December 31, 2008. These reserves apply to performing loans and were determined by applying estimated loss ratios inherent in the loan portfolio, ranging from 0.40% on residential real estate loans to 10.00% on unsecured consumer revolving loans, to categories of performing loans at each period end. The general section also includes allowances for watch list loans which are still performing but carry a higher degree of risk because of declining credit factors.
In the normal course of business there are outstanding commitments for the extension of credit which are not reflected in the financial statements. At March 31, 2009 and December 31, 2008, pre-approved but unused lines of credit for loans totaled approximately $113,358,000 and $108,650,000, respectively. In addition, we had $10,095,000 and $7,289,000 in standby letters of credit at March 31, 2009 and December 31, 2008, respectively. These commitments represent no more than the normal lending risk that we commit to borrowers. If these commitments are drawn, we will obtain collateral if it is deemed necessary based on our credit evaluation of the counter-party. We believe these commitments can be funded through normal operations.
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