<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB
                                   -----------

                        ANNUAL REPORT UNDER SECTION 13 OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                     FOR FISCAL YEAR ENDED DECEMBER 31, 2001

                        Commission File Number: 000-31877


                          CAROLINA BANK HOLDINGS, INC.
                          ----------------------------
             (Exact Name of Registrant as specified in its charter)

                                 NORTH CAROLINA
                                 --------------
                            (State of Incorporation)

                                   56-2215437
                                   ----------
                      (I.R.S. Employer Identification No.)

                               2604 Lawndale Drive
                        GREENSBORO, NORTH CAROLINA 27408
                        --------------------------------
                          (Address of Principal Office)

                                 (336) 288-1898
                                 --------------
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(g) of the Act:

                          COMMON STOCK, $1.00 PAR VALUE

Check whether the Registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES  X    NO
                                                                       ---

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B not contained in this form, and no disclosure will be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. ____

The Registrant's revenues for the year ended December 31, 2001 were $9,701,595.

The aggregate market value of the voting stock held by non-affiliates of the
Registrant at December 31, 2001 was approximately $7,541,672.

The number of shares of the Registrant's Common Stock outstanding on December
31, 2001 was 1,032,438.

<PAGE>

                      Documents Incorporated by Reference:

         1.       Proxy Statement for the 2002 Annual Meeting of Shareholders
                  (Parts II and III).

Transitional Small Business Disclosure Format                 Yes ____ No  X
                                                                          ---


                        FORM 10-KSB CROSS-REFERENCE INDEX

                                                     Form
PART I                                               10-KSB   Proxy Statement
                                                     ------   ---------------

Item 1  -  Business                                    3
Item 2  -  Properties                                  7
Item 3  -  Legal Proceedings                           8
Item 4  -  Submission of Matters to a Vote
           of Security Holders                         8

PART II

Item 5  -  Market Price and Dividends on the
           Registrant's Common Equity and
           Other Shareholder Matters                   8
Item 6  -  Management's Discussion & Analysis                         13
Item 7  -  Financial Statements                                       27
Item 8  -  Changes in and Disagreements with
           Accountants on Financial Disclosure         9

PART III

Item 9   - Directors, Executive Officers, Promoters
           and Control Persons                                        3-5 & 7
Item 10  - Executive Compensation                                     8-10
Item 11  - Security Ownership of Certain Beneficial
           Owners and Management                                      3
Item 12  - Certain Relationships and Related
           Transactions                                               10
Item 13  - Exhibits and Reports on Form 8-K            9

                                       2

<PAGE>

                                     PART I

ITEM 1:  BUSINESS

General

Carolina Bank Holdings, Inc. (the "Registrant") was incorporated under the laws
of the State of North Carolina on August 19, 2000, at the direction of the Board
of Directors of Carolina Bank (the "Bank"), for the purpose of serving as the
bank holding company of the Bank. The Bank issued all of its capital stock to
the Registrant, thereby making the Registrant its sole shareholder and bank
holding company.

The Bank is a North Carolina chartered bank, which was officially formed by
charter conversion effective October 1, 1997. The Bank's main banking office is
located at 2604 Lawndale Drive, Greensboro, North Carolina.

At December 31, 2001, the Registrant and the Bank had 35 full-time employees.

Business of the Registrant and the Bank

The Registrant's only function is the ownership of all of the issued and
outstanding stock of the Bank and ownership of all of the issued and outstanding
common securities of CBHI Capital Trust I, a Delaware business trust formed in
2001 for the purpose of selling $3,000,000 of trust preferred securities. The
Registrant does not engage in any separate lines of business. The Bank engages
in a general banking business in Guilford County, North Carolina. Its operations
are primarily commercially oriented and directed to individuals and small to
medium-sized businesses located in its market area and its deposits and loans
are derived primarily from customers in its geographical market. The Bank
provides most traditional commercial and consumer banking services, including
personal and commercial checking and savings accounts, money market accounts,
certificates of deposit, individual retirement accounts and related business and
individual banking services. The Bank's lending activities are concentrated in
commercial lending but also include commercial loans to small-to-medium sized
businesses located primarily in its market area for various purposes, and
various consumer-type loans to individuals, including installment loans, credit
card products, mortgage loans and equity lines of credit. The Bank does not
provide the services of a trust department.

Primary Market Area

The Bank's primary service area consists of the City of Greensboro, North
Carolina and the area immediately surrounding Greensboro, all of which is
located in Guilford County, North Carolina (the "PSA").

Competition

Commercial banking in the PSA and in North Carolina as a whole is extremely
competitive with state laws permitting state-wide branching. The Bank competes
directly for deposits in the PSA with other commercial banks, savings banks,
credit unions, agencies issuing United States government securities and all
other organizations and institutions engaged in money market transactions. In
its lending activities, the Bank competes with all other financial institutions
as well as consumer finance companies, mortgage companies and other lenders
engaged in the

                                       3

<PAGE>

business of extending credit. In Guilford County, some of the largest banks in
North Carolina operate full service offices as well as several community
financial institutions.

Interest rates, both on loans and deposits, and prices of services are
significant competitive factors among financial institutions generally. Office
location, office hours, customer service, community reputation and continuity of
personnel are also important competitive factors. Many of the Bank's competitors
have greater resources, broader geographic markets and higher lending limits,
and can offer more products and better afford and make more effective use of
media advertising, support services and electronic technology than the Bank. The
Bank depends on its reputation as a community bank in its local market, direct
customer contact, its ability to make credit and other business decisions
locally, and personalized service to counter these competitive disadvantages.

Employees

The Bank currently employs 35 full-time equivalent employees. Registrant does
not have any officers or employees who are not also officers or employees of the
Bank. None of the Registrant's employees are covered by a collective bargaining
agreement. The Registrant believes its relations with its employees to be good.

Regulation

Registrant is extensively regulated under both federal and state law. Generally,
these laws and regulations are intended to protect depositors and borrowers, not
shareholders. To the extent that the following information describes statutory
and regulatory provisions, it is qualified in its entirety by reference to the
particular statutory and regulatory provisions. Any change in applicable law or
regulation may have a material effect on the business of the Registrant.

                          The Bank Holding Company Act

The Registrant is a bank holding company within the meaning of the Bank Holding
Company Act of 1956, as amended (the "Bank Holding Company Act"), and is
required to register as such with the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board" or "FRB"). A bank holding company is
required to file with the FRB annual reports and other information regarding its
business operations and those of its subsidiaries. It is also subject to
examination by the Federal Reserve Board and is required to obtain Federal
Reserve Board approval prior to acquiring, directly or indirectly, more than 5%
of the voting stock of such bank, unless it already owns a majority of the
voting stock of such bank. Furthermore, a bank holding company must engage, with
limited exceptions, in the business of banking or managing or controlling banks
or furnishing services to or performing services for its subsidiary banks. One
of the exceptions to this prohibition is the ownership of shares of a company
the activities of which the FRB has determined to be so closely related to
banking or managing or controlling banks as to be a proper incident thereto.

STATE LAW. Registrant is subject to extensive supervision and regulation by the
North Carolina Commissioner of Banks (the "Commissioner"). The Commissioner
oversees state laws that set specific requirements for bank capital and regulate
deposits in, and loans and investments by, banks, including the amounts, types,
and in some cases, rates. The Commissioner supervises and performs periodic
examinations of North Carolina-chartered banks to assure compliance with state
banking statutes and regulations, and Registrant is required to make regular
reports to the Commissioner describing in detail its resources, assets,
liabilities and financial condition of

                                       4

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Registrant. Among other things, the Commissioner regulates mergers and
consolidations of state-chartered banks, the payment of dividends, loans to
officers and directors, record keeping, types and amounts of loans and
investments, and the establishment of branches.

DEPOSIT INSURANCE. As a member institution of the FDIC, Registrant's deposits
are insured up to a maximum of $100,000 per depositor through the Bank Insurance
Fund ("BIF"), administered by the FDIC, and each member institution is required
to pay quarterly deposit insurance premium assessments to the FDIC. The BIF
assessment rates have a range of 0 cents to 27 cents for every $100 in
assessable deposits. Banks with no premium are subject to an annual statutory
minimum assessment.

CAPITAL REQUIREMENTS. The federal banking regulators have adopted certain
risk-based capital guidelines to assist in the assessment of the capital
adequacy of a banking organization's operations for both transactions reported
on the balance sheet as assets and transactions, such as letters of credit, and
recourse arrangements, which are recorded as off balance sheet items. Under
these guidelines, nominal dollar amounts of assets and credit equivalent amounts
of off balance sheet items are multiplied by one of several risk adjustment
percentages which range from 0% for assets with low credit risk, such as certain
U.S. Treasury securities, to 100% for assets with relatively high credit risk,
such as business loans.

A banking organization's risk-based capital ratios are obtained by dividing its
qualifying capital by its total risk adjusted assets. The regulators measure
risk-adjusted assets, which include off balance sheet items, against both total
qualifying capital (the sum of Tier 1 capital and limited amounts of Tier 2
capital) and Tier 1 capital. "Tier 1," or core capital, includes common equity,
qualifying noncumulative perpetual preferred stock and minority interests in
equity accounts of consolidated subsidiaries, less goodwill and other
intangibles, subject to certain exceptions. "Tier 2," or supplementary capital,
includes among other things, limited-life preferred stock, hybrid capital
instruments, mandatory convertible securities, qualifying subordinated debt, and
the allowance for loan and lease losses, subject to certain limitations and less
required deductions. The inclusion of elements of Tier 2 capital is subject to
certain other requirements and limitations of the federal banking agencies.
Banks and bank holding companies subject to the risk-based capital guidelines
are required to maintain a ratio of Tier 1 capital to risk-weighted assets of at
least 4% and a ratio of total capital to risk-weighted assets of at least 8%.
The appropriate regulatory authority may set higher capital requirements when
particular circumstances warrant. As of December 31, 2001, Registrant was
classified as "well-capitalized" with Tier 1 and Total Risk - Based Capital of
10.96% and 12.15% respectively.

The federal banking agencies have adopted regulations specifying that they will
include, in their evaluations of a bank's capital adequacy, an assessment of the
bank's interest rate risk ("IRR") exposure. The standards for measuring the
adequacy and effectiveness of a banking organization's IRR management include a
measurement of board of director and senior management oversight, and a
determination of whether a banking organization's procedures for comprehensive
risk management are appropriate for the circumstances of the specific banking
organization.

Failure to meet applicable capital guidelines could subject a banking
organization to a variety of enforcement actions, including limitations on its
ability to pay dividends, the issuance by the applicable regulatory authority of
a capital directive to increase capital and, in the case of depository
institutions, the termination of deposit insurance by the FDIC, as well as the
measures described under the "Federal Deposit Insurance Corporation Improvement
Act of 1991" below, as applicable to undercapitalized institutions. In addition,
future changes in regulations or practices

                                       5

<PAGE>

could further reduce the amount of capital recognized for purposes of capital
adequacy. Such a change could affect the ability of Registrant to grow and could
restrict the amount of profits, if any, available for the payment of dividends
to the shareholders.

FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991. In December,
1991, Congress enacted the Federal Deposit Insurance Corporation Improvement Act
of 1991 ("FDICIA"), which substantially revised the bank regulatory and funding
provisions of the Federal Deposit Insurance Act and made significant revisions
to several other federal banking statutes. FDICIA provides for, among other
things:

          .    publicly available annual financial condition and management
               reports for certain financial institutions, including audits by
               independent accountants,

          .    the establishment of uniform accounting standards by federal
               banking agencies,

          .    the establishment of a "prompt corrective action" system of
               regulatory supervision and intervention, based on capitalization
               levels, with greater scrutiny and restrictions placed on
               depository institutions with lower levels of capital,

          .    additional grounds for the appointment of a conservator or
               receiver, and

          .    restrictions or prohibitions on accepting brokered deposits,
               except for institutions which significantly exceed minimum
               capital requirements.

FDICIA also provides for increased funding of the FDIC insurance funds and the
implementation of risk-based premiums.

A central feature of FDICIA is the requirement that the federal banking agencies
take "prompt corrective action" with respect to depository institutions that do
not meet minimum capital requirements. Pursuant to FDICIA, the federal bank
regulatory authorities have adopted regulations setting forth a five-tiered
system for measuring the capital adequacy of the depository institutions that
they supervise. Under these regulations, a depository institution is classified
in one of the following capital categories: "well capitalized," "adequately
capitalized," "undercapitalized," "significantly undercapitalized" and
"critically undercapitalized." An institution may be deemed by the regulators to
be in a capitalization category that is lower than is indicated by its actual
capital position if, among other things, it receives an unsatisfactory
examination rating with respect to asset quality, management, earnings or
liquidity.

FDICIA provides the federal banking agencies with significantly expanded powers
to take enforcement action against institutions which fail to comply with
capital or other standards. Such action may include the termination of deposit
insurance by the FDIC or the appointment of a receiver or conservator for the
institution. FDICIA also limits the circumstances under which the FDIC is
permitted to provide financial assistance to an insured institution before
appointment of a conservator or receiver.

MISCELLANEOUS. The dividends that may be paid by Registrant are subject to legal
limitations. In accordance with North Carolina banking law, dividends may not be
paid unless Registrant's capital surplus is at least 50% of its paid-in capital.
Further, without the approval of the North Carolina Commissioner of Banks, no
bank that has not been in existence for at least three years may pay cash
dividends.

                                       6

<PAGE>

The earnings of Registrant will be affected significantly by the policies of the
Federal Reserve Board, which is responsible for regulating the United States
money supply in order to mitigate recessionary and inflationary pressures. Among
the techniques used to implement these objectives are open market transactions
in United States government securities, changes in the rate paid by banks on
bank borrowings, and changes in reserve requirements against bank deposits.
These techniques are used in varying combinations to influence overall growth
and distribution of bank loans, investments, and deposits, and their use may
also affect interest rates charged on loans or paid for deposits.

The monetary policies of the Federal Reserve Board have had a significant effect
on the operating results of commercial banks in the past and are expected to
continue to do so in the future. In view of changing conditions in the national
economy and money markets, as well as the effect of actions by monetary and
fiscal authorities, no prediction can be made as to possible future changes in
interest rates, deposit levels, loan demand or the business and earnings of
Registrant.

Recent Legislative Developments

Effective March 11, 2000, the Gramm-Leach-Bliley Act of 1999 allows a bank
holding company to qualify as a "financial holding company" and, as a result, be
permitted to engage in a broader range of activities that are "financial in
nature" and in activities that are determined to be incidental or complementary
to activities that are financial in nature. The Gramm-Leach-Bliley Act amends
the BHC Act to include a list of activities that are financial in nature, and
the list includes activities such as underwriting, dealing in and making a
market in securities, insurance underwriting and agency activities and merchant
banking. The Federal Reserve Board is authorized to determine other activities
that are financial in nature or incidental or complementary to such activities.
The Gramm-Leach-Bliley Act also authorizes banks to engage through financial
subsidiaries in certain of the activities permitted for financial holding
companies.

Registrant cannot predict what legislation might be enacted or what regulations
might be adopted, or if enacted or adopted, the effect thereof on Registrant's
operations.

ITEM 2: PROPERTIES

The following table sets forth the location of the Registrant's offices as of
December 31, 2001.

                                                     APPROX.
                                    YEAR             SQUARE
OFFICE LOCATION                     OPENED           FOOTAGE          OWN/LEASE
---------------                     ------           -------          ---------

Main Office
2604 Lawndale Drive                  2000            12,000              Own
Greensboro, NC

Friendly Center Office
3124 Friendly Avenue                 1996             5,300             Lease
Greensboro, NC

Jefferson Village Office
1601 Highwoods Blvd.                 2001             3,000              Own
Greensboro, NC

                                       7

<PAGE>

ITEM 3: LEGAL PROCEEDINGS

Other than in the normal course of business, there are no pending legal
proceedings to which the Registrant is a party, or of which any of its property
is the subject, that, if decided adversely to the Registrant, could have a
material adverse financial effect as of December 31, 2001.

ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

                                     PART II

ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Summary

The Registrant's common stock is traded in the over-the-counter market, and is
listed on the OTC "Bulletin Board." Scott & Stringfellow, Inc., Richmond,
Virginia and Trident Securities, Atlanta, Georgia are the market makers for the
common stock. As of December 31, 2001, the Registrant had issued and outstanding
1,032,438 shares of common stock which were held by approximately 800
shareholders of record.

The following table represents stock prices during the trading periods.

         2001                                  High*            Low*
         -----------------------------------------------------------

            First Quarter                     $  9.09          $ 7.73
            Second Quarter                       9.77            8.36
            Third Quarter                        9.55            8.86
            Fourth Quarter                      12.00            7.05

         2000                                  High             Low
         -----------------------------------------------------------

            First Quarter                     $  9.21          $ 6.69
            Second Quarter                       8.55            6.69
            Third Quarter                        9.00            5.95
            Fourth Quarter                       8.18            6.31

* Reflects 10% stock dividends paid in the fourth quarter 2001 and 2000. No cash
dividends were paid in 2001 or 2000.

                                       8

<PAGE>

ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS

See Proxy Statement pages 13 - 26.

ITEM 7: FINANCIAL STATEMENTS

See Proxy Statement pages 27 - 49.

ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

There have been no changes in or disagreements with accountants.

                                    PART III

ITEM 9: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

See Proxy Statement pages 3-5 and 7.

ITEM 10: EXECUTIVE COMPENSATION

See Proxy Statement pages 8 - 10.

ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

See Proxy Statement page 3.

ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

See Proxy Statement page 10.

ITEM 13: EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

3(i)     Articles of Incorporation of the Registrant*

3(ii)    Bylaws of the Registrant*

10(i)    Employment Agreement between the Bank and Robert T. Braswell, dated May
         21, 1996**

10(ii)   Employment Agreement between the Bank and T. Allen Liles, dated July
         24, 2001.***

10(iii)  1997 Incentive Stock Option Plan****

10(iv)   1997 Nonqualified Stock Option Plan****

                                       9

<PAGE>

99       Proxy Statement for the 2002 Annual Meeting of Shareholders*****

*Incorporated by reference to Form 10-KSB of the Registrant (Filed April 2, 2001
with the Securities and Exchange Commission.).

**Previously filed on Form F-1 of Carolina Savings Bank SSB, Inc. with the
Federal Deposit Insurance Corporation for the year ended December 31, 1996, and
incorporated herein by reference.

***Incorporated by reference to Form 10-QSB of the Registrant (Filed November 9,
2001 with the Securities and Exchange Commission).

****Incorporated by reference to Form S-8 of the Registrant (Filed May 11, 2000
with the Securities and Exchange Commission).

*****As filed with the SEC pursuant to Rule 14a-6(b).

(b)      Reports on Form 8-K

         The Registrant did not file any reports on Form 8-K during the last
         quarter of the period covered by this report.

                                       10

<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                            CAROLINA BANK HOLDINGS, INC.
                                            ----------------------------
                                                     (Registrant)



                                            By:      /s/Robert T. Braswell
                                                     ------------------------
                                                     Robert T. Braswell
                                                     President and
                                                     Chief Executive Officer

                                            Date:    March 26, 2002

                                       11

<PAGE>

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.

/s/ Robert T. Braswell
----------------------
Robert T. Braswell                                      March 26, 2002
President & Chief Executive Officer

/s/ Gary N. Brown                                       March 26, 2002
-----------------
Gary N. Brown
Vice Chairman

/s/ George E. Carr                                      March 26, 2002
-----------------
George E. Carr
Director

/s/ John D. Cornet                                      March 26, 2002
------------------
John D. Cornet
Chairman of the Board of Directors

/s/ Judy H. Fuller                                      March 26, 2002
------------------
Judy H. Fuller
Director

/s/ James E. Hooper                                     March 26, 2002
-------------------
James E. Hooper
Director

/s/ Edward A. Hoyle                                     March 26, 2002
------------------
Edward A. Hoyle
Vice Chariman

/s/ T. Allen Liles                                      March 26, 2002
------------------
T. Allen Liles
Secretary and Treasurer

                                       12

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                                  EXHIBIT INDEX
                                  -------------
<TABLE>
<CAPTION>
    Exhibit                                                                     Page
    Number     Exhibit                                                          Number
    ------     -------                                                          ------
<S>            <C>                                                              <C>
      3(i)     Articles of Incorporation                                          *

      3(ii)    Bylaws                                                             *

     10(i)     Employment Agreement of Robert T. Braswell                         *

     10(ii)    Employment Agreement of T. Allen Liles                             *

     10(iii)   1997 Incentive Stock Option Plan                                   *

     10(iv)    1997 Nonqualified Stock option Plan                                *

     99        Proxy Statement for the 2002 Annual Meeting of Shareholders       **
</TABLE>



*        Incorporated by reference.
**       As filed with the SEC pursuant to Rule 14a-6(b).

                                       13