Georgia-Carolina Bancshares Announces Increase in Third Quarter Net Income

AUGUSTA, Ga., Oct. 27 /PRNewswire-FirstCall/ -- Georgia-Carolina Bancshares, Inc. (OTC Bulletin Board: GECR), a bank holding company and parent company of First Bank of Georgia, reported today that net income increased 54.7% to $1,494,000 ($.43 per diluted common share) for the three months ended September 30, 2009, up from $966,000 ($.28 per diluted common share) for the three months ended September 30, 2008. Net income for the nine months ended September 30, 2009 increased $204,000 or 7.9% over the nine month period ended September 30, 2008. Book value per share of common stock increased to $12.19 at September 30, 2009.

Remer Y. Brinson III, President & CEO of the Company, stated, "We are pleased to report a substantial increase in our third quarter net income, when compared to the third quarter of 2008, and in net income for the nine months ended September 30, 2009, when compared to the same period in 2008. This increase in both quarterly and year-to-date net income has been achieved despite sizeable challenges in the local and national economy, increased allocations to our loan loss reserve and increased regulatory assessments."

"The increase in net income resulted in a return on average equity of 14.06% for the quarter ended September 30, 2009 compared to 10.08% for the third quarter last year. Net interest income for the quarter increased by $428,000 over last year as earning assets grew approximately $25 million in the past twelve months. In addition, increased originations in our mortgage division, gains from the sale of other real estate owned, and tight expense control further boosted our profitability," Brinson continued.

The increase in net income to $2.79 million for the nine months ended September 30, 2009, has been achieved despite FDIC assessments increasing by $504,000 and allocations to the loan loss reserve increasing by $1,184,000, when compared to the first nine months of 2008. "We are very pleased to have exceeded last year's performance in the face of these unprecedented expense increases," Brinson said.

"Asset quality remains a primary focus," Brinson stated. "Our loan loss reserve remains sound at 1.59% of loans, excluding loans held for sale. Also, we have reduced other real estate owned by over $2 million since the beginning of the year. Annualized charge-offs year to date have totaled 0.28% of loans, which is higher than historical levels, but below industry averages."

Total loans grew $24.6 million, or 9.0%, on an annualized basis, during the first nine months of 2009. Total deposits grew $19.6 million, or 6.9%, on an annualized basis, during the same period. "This growth in both loans and deposits during the first nine months of 2009 is a testament to the relative strength of our local economy and our community banking model," Brinson commented.

"In addition, we remain 'well-capitalized' by regulatory standards and all of our regulatory capital ratios improved during the quarter, all accomplished without electing to apply for capital funds through the U.S. Treasury Troubled Asset Relief Program (TARP)."

During the first quarter, First Bank of Georgia celebrated its 20 year anniversary of the opening of the Hill Street Office in Thomson, Georgia and the 10 year anniversary of entering the Augusta market with the opening of its Daniel Village Office. In October, the Bank also celebrated the 10 year anniversary of the opening of the West Town Office in Martinez.

Georgia-Carolina Bancshares' common stock is quoted on the OTC Bulletin Board under the symbol GECR. First Bank of Georgia conducts banking operations through offices in Augusta, Columbia County, and Thomson, Georgia and operates mortgage origination offices in Augusta and Savannah, Georgia and Jacksonville, Florida.

This press release may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which can generally be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," "anticipates," "plans" or similar expressions to identify forward-looking statements, and are made on the basis of management's plans and current analyses of the Company, its business and the industry as a whole. These forward-looking statements are subject to risks and uncertainties, including, but not limited to, economic and market conditions, competition, interest rate sensitivity and exposure to regulatory and legislative changes, and other risks and uncertainties described in the Company's periodic filings with the Securities and Exchange Commission.

Although we believe that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by the Company or any person that the future events, plans, or expectations contemplated by the Company will be achieved. The Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

                            GEORGIA-CAROLINA BANCSHARES, INC.

                             Consolidated Balance Sheets
                                (dollars in thousands)

                                               September 30, December 31,
                                               ------------- ------------
                                                    2009         2008
                                                    ----         ----
    ASSETS

    Cash and due from banks                       $14,169       $9,954
    Federal funds sold                              1,675            -
    Securities available-for-sale                  47,157       57,594
    Loans, net of allowance for loan losses
     of $5,470 and 4284, respectively             339,538      332,009
    Loans, held for sale                           44,267       28,402
    Bank premises and fixed assets                  9,760       10,081
    Accrued interest receivable                     1,905        1,934
    Foreclosed real estate, net of allowance        5,142        7,217
    Deferred tax asset, net                         1,107          996
    Federal Home Loan Bank stock                    2,828        2,201
    Bank-owned life insurance                       8,738        8,402
    Other assets                                    1,495        2,038
                                                    -----        -----

          Total assets                           $477,781     $460,828
                                                 ========     ========

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Deposits
      Non-interest bearing                        $38,151      $34,121
      Interest-bearing:
        NOW accounts                               34,114       37,373
        Savings                                    55,026       55,426
        Money market accounts                      15,005        9,772
        Time deposits of $100,000, and over       176,474      170,878
        Other time deposits                        77,791       69,439
                                                   ------       ------
          Total deposits                          396,561      377,009

    Other liabilities, borrowings, and retail
     deposit agreements                            38,622       44,735
                                                   ------       ------

          Total liabilities                       435,183      421,744
                                                  -------      -------

    Shareholders' equity
      Preferred stock, par value $.001;
       1,000,000 shares authorized; none issued         -            -
      Common stock, par value $.001; 9,000,000
       shares authorized; shares issued and
       3,493,179 and 3,456,816 outstanding              4            4
      Additional paid-in-capital                   15,523       15,268
      Retained Earnings                            26,392       23,604
      Accumulated other comprehensive income          679          208
                                                      ---          ---
          Total shareholders' equity               42,598       39,084
                                                   ------       ------
          Total liabilities and shareholders'
           equity                                $477,781     $460,828
                                                 ========     ========



                          GEORGIA-CAROLINA BANCSHARES, INC.

                          Consolidated Statements of Income
                  (dollars in thousands, except per share amounts)

                                Three Months Ended   Nine Months Ended
                                    September 30,      September 30,
    Interest income                  2009   2008       2009    2008
                                     ----   ----       ----    ----
      Interest and fees on loans    $5,727 $5,668    $16,383 $17,839
      Interest on taxable
       securities                      452    673      1,519   2,101
      Interest on nontaxable
       securities                      103     84        311     232
      Interest on Federal funds
       sold and other interest           3     20          6      76
                                         -     --          -      --
        Total interest income        6,285  6,445     18,219  20,248
                                     -----  -----     ------  ------

    Interest expense
      Interest on time deposits of
       $100,000 or more              1,342  1,447      4,337   4,862
      Interest on other deposits       828  1,236      2,548   4,518
      Interest on funds purchased
       and other borrowings            229    304        745     811
                                       ---    ---        ---     ---
        Total interest expense       2,399  2,987      7,630  10,191
                                     -----  -----      -----  ------

        Net interest income          3,886  3,458     10,589  10,057

    Provision for loan losses          670    518      1,910     726
                                       ---    ---      -----     ---

        Net interest income after
         provision for loan losses   3,216  2,940      8,679   9,331
                                     -----  -----      -----   -----

    Noninterest income
      Service charges on deposits      392    363      1,090     987
      Other income/loss              1,325    658      2,342   1,138
      Gain on sale of mortgage
       loans                         2,506  1,820      7,150   5,557
                                     -----  -----      -----   -----
        Total noninterest income     4,223  2,841     10,582   7,682
                                     -----  -----     ------   -----

    Noninterest expense
      Salaries and employee
       benefits                      3,287  2,731      9,427   8,316
      Occupancy expenses               382    418      1,130   1,168
      Other expenses                 1,696  1,280      4,895   3,790
                                     -----  -----      -----   -----
        Total noninterest expense    5,365  4,429     15,452  13,274
                                     -----  -----     ------  ------

    Income before income taxes       2,074  1,352      3,809   3,739
                                     -----  -----      -----   -----

    Income tax expense                 580    386      1,021   1,155
                                       ---    ---      -----   -----

        Net income                  $1,494   $966     $2,788  $2,584
                                    ======   ====     ======  ======


    Net income per share of
     common stock
      Basic                          $0.43  $0.29      $0.80   $0.76
                                     =====  =====      =====   =====
      Diluted                        $0.43  $0.28      $0.80   $0.74
                                     =====  =====      =====   =====
    Dividends per share of common
     stock                              $-     $-         $-      $-
                                        ==     ==         ==      ==