##### Table of Contents

---

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, 2003



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.  x



The Registrants revenues for the year ended December 31, 2003 were $11,197,742.



The aggregate market value of the voting stock held by non-affiliates of the Registrant at
February 27, 2004 was approximately $26,114,527.



The number of shares of the
Registrants Common Stock outstanding on February 27, 2004 was 1,873,563.



Documents Incorporated by Reference:



| | 1. | Proxy Statement for the 2004 Annual Meeting of Shareholders (Parts II and III).
| | -- | -------------------------------------------------------------------------------



Transitional Small Business Disclosure Format    Yes ̈No  x



---



---

##### Table of Contents

FORM 10-KSB CROSS-REFERENCE INDEX



|                                                                               |  |             |  |                
|------------------------------------------------------------------------------ |  | ----------- |  | ---------------
|                                                                               |  | Form 10-KSB |  | Proxy Statement
|PART I                                                                         |  |             |  |                
|                                                                               |  |            
|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 for Common Equity and Related Shareholder Matters              |  | 8           |  | 18             
|Item 6 
Managements Discussion & Analysis                                    |  |             |  | 19             
|Item 7 
Financial Statements                                                  |  |             |  | 35             
|Item 8 
Changes in and Disagreements with Accountants on Financial Disclosure |  | 9           |  |                
|Item 8a
Controls and Procedures                                               |  | 10          |  |                
|                                                                               |  |            
|PART III                                                                       |  |             |  |                
|                                                                               |  |            
|Item 9 
Directors, Executive Officers, Promoters and Control Persons          |  | 10          |  | 3-7 & 9-10     
|Item 10 
Executive Compensation                                               |  |             |  | 10-13          
|Item 11 
Security Ownership of Certain Beneficial Owners and Management       |  |             |  | 3-5            
|Item 12 
Certain Relationships and Related Transactions                       |  |             |  | 7 & 13         
|Item 13 
Exhibits and Reports on Form 8-K                                     |  | 12          |  |                
|Item 14 
Principal Accountant Fees and Services                               |  | 13          |  |                



2



---

##### Table of Contents

PART I



ITEM 1: BUSINESS



General



Carolina Bank Holdings, Inc. 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, for the purpose of serving as the bank holding company of Carolina Bank. The bank issued all of its capital stock to us, thereby making us its sole shareholder and bank
holding company.



Carolina 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, 2003, we had 45 full-time equivalent employees.



Business of Carolina Bank Holdings, Inc. and Carolina Bank



Our 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. We do not engage in any separate lines of business other than those of the bank. The bank
engages in a general banking business in Guilford and Randolph Counties, 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 geographic 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 Cities of Greensboro and Asheboro,
North Carolina and the areas immediately surrounding Greensboro and Asheboro, all of which are located in Guilford and Randolph Counties, North Carolina.



Competition



Commercial banking in the banks primary service area and in North Carolina as a whole is extremely competitive with state laws permitting state-wide branching. The bank competes directly for deposits in its
primary service area 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 business of extending credit. In Guilford County, 20 other commercial banks operate over 130 full service
offices, including all of the largest banks in North Carolina. In Randolph County, 13 other commercial banks operate over 40 full service branch offices.



3



---

##### Table of Contents

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 45 full-time equivalent employees. We do not have any officers or employees who are not also officers or employees of Carolina Bank. None of
our employees are covered by a collective bargaining agreement. We believe our relations with our employees to be good.



Regulation



We are 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 our business.



The Bank Holding Company Act



We are a bank holding company within the meaning of the Bank Holding Company Act of 1956, as
amended, and are required to register as such with the Board of Governors of the Federal Reserve System. A bank holding company is required to file annual reports and other information regarding its business operations and those of its subsidiaries
with the Federal Reserve Board. 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 any 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 Federal Reserve Board has determined to be so closely related to banking or managing or controlling banks as to be a
proper incident thereto.



STATE LAW. We are subject to extensive supervision
and regulation by the North Carolina Commissioner of Banks. The Commissioner of Banks 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 we are required to make regular reports to the
Commissioner describing, in detail, our resources, assets, liabilities and financial condition. 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.



4



---

##### Table of Contents

DEPOSIT INSURANCE. As a member institution of the FDIC, the banks deposits are insured up to a maximum of $100,000
per depositor through the Bank Insurance Fund administered by the FDIC. 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, 2003, we were classified as well-capitalized with Tier 1 and Total Risk - Based Capital of 11.52% and
12.62% 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 exposure. The standards for measuring the adequacy and effectiveness of a banking organizations
interest rate risk 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 could further reduce the amount of capital recognized for purposes of capital adequacy. Such a change could affect our ability to grow and could restrict the amount of profits, if any, available
for the payment of dividends to the shareholders.



5



---

##### Table of Contents

FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991. In December 1991, Congress enacted the Federal Deposit
Insurance Corporation Improvement Act of 1991, also known as 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 us are subject to legal limitations. In accordance with North Carolina banking law,
dividends may not be paid by Carolina Bank unless its capital surplus is at least 50% of its paid-in capital.



Our earnings 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



6



---

##### Table of Contents

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 our business and earnings.



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.



Recent Legislative
Developments



International Money Laundering Abatement and Financial
Anti-Terrorism Act of 2001. On October 26, 2001, the USA Patriot Act of 2001 was enacted. This act contains the International Money laundering Abatement and Financial Anti-Terrorism Act of 2001, which sets forth anti-money laundering measures
affecting insured depository institutions, broker-dealers and other financial institutions. The Act requires U.S. financial institutions to adopt new policies and procedures to combat money laundering and grant the Secretary of the Treasury broad
authority to establish regulations and to impose requirements and restrictions on the operation of financial institutions. This act has not had a material adverse impact on our operations.



We cannot predict what legislation might be enacted or what regulations might be adopted, or
if enacted or adopted, the effect thereof on our operations.



7



---

##### Table of Contents

ITEM 2: PROPERTIES



The following table sets forth
the location of our offices:



|                           |  |             |  |                        |  |          
|-------------------------- |  | ----------- |  | ---------------------- |  | ---------
|OFFICE LOCATION            |  | YEAR OPENED |  | APPROX. SQUARE 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             |  |             |  |                        |  |          
|                           |  |             | 
|Asheboro Office            |  | 2004(1)     |  | 5,800                  |  | Own      
|335 S. Fayetteville Street |  |             |  |                        |  |          
|Asheboro, NC               |  |             |  |                        |  |          

---

|(1) | The Asheboro office initially operated out of a leased facility during 2003.
|--- | ----------------------------------------------------------------------------



ITEM 3: LEGAL PROCEEDINGS



Other than in the
normal course of business, there were, as of December 31, 2003, no pending legal proceedings to which we are a party, or of which any of our property is the subject, that, if decided adversely to us, could have a material adverse financial effect.



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



Not applicable.



8



---

##### Table of Contents

PART II



ITEM 5: MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS



Market Summary



Our common stock is
listed on the Nasdaq SmallCap Market, and trades under the symbol, CLBH. As of December 31, 2003, we had issued and outstanding 1,873,563 shares of common stock which were held by approximately 1,000 shareholders.



No cash dividends were paid in 2003 or 2002.



Additional information regarding our common stock, including a table which gives the high and
low sale prices for our common stock in each of the calendar quarters in 2003 and 2002, is incorporated by reference to page 18 of the Proxy Statement.



ITEM 6: MANAGEMENTS DISCUSSION AND ANALYSIS



Incorporated by reference to pages 19-34 of the Proxy Statement.



ITEM 7: FINANCIAL STATEMENTS



Incorporated by
reference to pages 35-60 of the Proxy Statement.



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



There have been no changes in or disagreements with accountants.



ITEM 8a: CONTROLS AND PROCEDURES



Our Chief
Executive Officer and Chief Financial Officer have conducted an evaluation of our disclosure controls and procedures as of December 31, 2003. Based on their evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our
disclosure controls and procedures are effective to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time period
specified in the applicable Securities and Exchange Commission Rules and Forms. There were no significant changes in our internal controls or in other factors that could significantly effect these controls subsequent to the date of the most recent
evaluation of these controls by our Chief Executive Officer and Chief Financial Officer, including any corrective actions with regard to significant deficiencies and material weaknesses.



9



---

##### Table of Contents

PART III



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



Incorporated by reference to pages 3-7 and 9-10 of the Proxy Statement. We have adopted a Code of Ethics that applies, among others, to our principal executive officer and principal financial officer. Our Code of
Ethics is available to any person, without charge, upon written request submitted to T. Allen Liles, Carolina Bank Holdings, Inc., 2604 Lawndale Drive, Greensboro, North Carolina 27408.



ITEM 10: EXECUTIVE COMPENSATION



Incorporated by
reference to pages 10-13 of the Proxy Statement



ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



Incorporated by reference to pages 3-5 of the Proxy Statement.



In 1997, the Banks shareholders approved the Carolina Bank 1997 Nonqualified Stock Option Plan for Directors (the Nonqualified Plan) and the 1997 Incentive Stock Option Plan (the Incentive
Plan). Both plans were adopted by us upon our organization as the banks holding company. All options to purchase shares of our stock under the Nonqualified Plan have been granted. The maximum number of options available for grant under
the Nonqualified Plan is 78,368 (adjusted for 10% stock dividends paid in 2000 and 2001). The maximum number of options to purchase shares of our stock available for grant under the Incentive Plan is 178,368 (adjusted for 10% stock dividends paid in
2000 and 2001). Of the maximum number of options available for grant, 52,452 were outstanding under the Nonqualified Plan and 88,385 were outstanding under the Incentive Plan at December 31, 2003. Option prices for both plans are established at
market value at the time of grant. The following chart contains details of the grants:



|                                                           |  |                                                                         |  |                                                                          |           |                                                                                                                                       |          
|---------------------------------------------------------- |  | ----------------------------------------------------------------------- |  | ------------------------------------------------------------------------ | --------- | ------------------------------------------------------------------------------------------------------------------------------------- | ---------
|Plan Category                                              |  | Number of securities to be issued upon exercise of outstanding options, |  | Weighted-averageexercise price ofoutstanding options,warrants and rights |           | Number of securitiesremaining availablefor future issuanceunder equitycompensation plans(excluding
securitiesreflected in column (a))
|                                                           |  | (a)                                                                     |  | (b)                                                                      |           | (c)                                                                                                                                  
|                                                           |  |                                                                         | 
|Equity compensation plans approved by security holders     |  | Nonstatutory  52,452Incentive  88,385                                 |  | $                                                                        | 8.9310.64 |                                                                                                                                       | -0-76,056
|                                                           |  |                                                                         | 
|Equity compensation plans not approved by security holders |  | None                                                                    |  |                                                                          | N/A       |                                                                                                                                       | None     
|                                                           |  |                                                                         | 
|Total                                                      |  | 140,837                                                                 |  | $                                                                        | 10.00     |                                                                                                                                       | 76,056   



10



---

##### Table of Contents

ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



Incorporated by reference to pages 7 and 13 of the Proxy Statement.



ITEM 13: EXHIBITS AND REPORTS ON FORM 8-K



(a)
Exhibits



|         |  |                                                                                                                 
|-------- |  | ----------------------------------------------------------------------------------------------------------------
|3(i)     |  | Articles of Incorporation of Carolina Bank Holdings, Inc.*                                                      
|         | 
|3(ii)    |  | Bylaws of the Carolina Bank Holdings, Inc.*                                                                     
|         | 
|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****                                                                         
|         | 
|10(v)    |  | Executive Supplemental Retirement Plan Executive Agreement between Carolina Bank and Robert T. Braswell *****   
|         | 
|10(vi)   |  | Executive Supplemental Retirement Plan Executive Agreement between Carolina Bank and T. Allen Liles *****       
|         | 
|10(vii)  |  | Executive Supplemental Retirement Plan Executive Agreement between Carolina Bank and Gunnar N.R. Fromen *****   
|         | 
|10(viii) |  | Life Insurance Endorsement Method Split Dollar Plan Agreement Between Carolina Bank and Robert T. Braswell *****
|         | 
|10(ix)   |  | Life Insurance Endorsement Method Split Dollar Plan Agreement Between Carolina Bank and T. Allen Liles *****    
|         | 
|10(x)    |  | Life Insurance Endorsement Method Split Dollar Plan Agreement Between Carolina Bank and Gunnar N.R. Fromen *****
|         | 
|10(xi)   |  | Carolina Bank Directors Deferral Plan *****                                                                    
|         | 
|21       |  | Subsidiaries of the registrant *****                                                                            
|         | 
|31(i)    |  | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.                 
|         | 
|31(ii)   |  | Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.                
|         | 
|32(i)    |  | Certification Pursuant to Section 906 of the Sarbanes-Oxley Act.                                                
|         | 
|99       |  | Proxy Statement for the 2004 Annual Meeting of Shareholders******                                               

---

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



11



---

##### Table of Contents

|** | 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 Carolina Bank Holdings, Inc. (Filed November 9, 2001 with the Securities and Exchange Commission).
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------

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

|***** | Incorporated by reference to Form 10-KSB of Carolina Bank Holdings, Inc. (Filed March 28, 2003 with the Securities and Exchange Commission).
|----- | --------------------------------------------------------------------------------------------------------------------------------------------

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



(b) Reports on Form 8-K



During the quarter ended December 31, 2003, we filed one Current Report on Form 8-K on October 15, 2003 (reporting under Items 5, 7 and 12).



ITEM 14: PRINCIPAL ACCOUNTANT FEES AND SERVICES



Incorporated by reference to pages 13-14 of the Proxy Statement.



12



---

##### Table of Contents

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. BraswellRobert T. BraswellPresident and Chief Executive OfficerDate:

March 29, 2004




13



---

##### Table of Contents

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. BraswellRobert T. Braswell President & Chief Executive Officer           |  | March 29, 2004
|                                                                                       | 
|/s/ Gary N. BrownGary N. Brown Vice Chairman                                           |  | March 29, 2004
|                                                                                       | 
|/s/ George E. CarrGeorge E. Carr Director                                              |  | March 29, 2004
|                                                                                       | 
|/s/ Marlene H. CatoMarlene H. Cato Director                                            |  | March 29, 2004
|                                                                                       | 
|/s/ John D. CornetJohn D. Cornet Chairman of the Board of Directors                    |  | March 29, 2004
|                                                                                       | 
|/s/ Judy H. FullerJudy H. Fuller Director                                              |  | March 29, 2004
|                                                                                       | 
|/s/ James E. HooperJames E. Hooper Director                                            |  | March 29, 2004
|                                                                                       | 
|/s/ Edward A. HoyleEdward A. Hoyle Vice Chairman                                       |  | March 29, 2004
|                                                                                       | 
|/s/ Kenneth C. Mayer, Jr.Kenneth C. Mayer, Jr. Director                                |  | March 29, 2004
|                                                                                       | 
|/s/ T. Gray McCaskillT. Gray McCaskill Director                                        |  | March 29, 2004
|                                                                                       | 
|/s/ Julius L. YoungJulius L. Young Director                                            |  | March 29, 2004
|                                                                                       | 
|/s/ T. Allen LilesT. Allen Liles Secretary, Treasurer and Principal Accounting Officer |  | March 29, 2004



14



---

##### Table of Contents

EXHIBIT INDEX



|               |  |                                                                                                            |  |               
|-------------- |  | ---------------------------------------------------------------------------------------------------------- |  | --------------
|Exhibit Number |  | Exhibit                                                                                                    |  | Page Number   
|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                                                                        |  | *             
|               |  |                                                                                                           
|10(v)          |  | Executive Supplemental Retirement Plan Executive Agreement between Carolina Bank and Robert T. Braswell    |  | *             
|               |  |                                                                                                           
|10(vi)         |  | Executive Supplemental Retirement Plan Executive Agreement between Carolina Bank and T. Allen Liles        |  | *             
|               |  |                                                                                                           
|10(vii)        |  | Executive Supplemental Retirement Plan Executive Agreement between Carolina Bank and Gunnar N.R. Fromen    |  | *             
|               |  |                                                                                                           
|10(viii)       |  | Life Insurance Endorsement Method Split Dollar Plan Agreement Between Carolina Bank and Robert T. Braswell |  | *             
|               |  |                                                                                                           
|10(ix)         |  | Life Insurance Endorsement Method Split Dollar Plan Agreement Between Carolina Bank and T. Allen Liles     |  | *             
|               |  |                                                                                                           
|10(x)          |  | Life Insurance Endorsement Method Split Dollar Plan Agreement Between Carolina Bank and Gunnar N.R. Fromen |  | *             
|               |  |                                                                                                           
|10(xi)         |  | Carolina Bank Directors Deferral Plan                                                                     |  | *             
|               |  |                                                                                                           
|21             |  | Subsidiaries of the registrant                                                                             |  | *             
|               |  |                                                                                                           
|31(i)          |  | Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.            |  | Filed herewith
|               |  |                                                                                                           
|31(ii)         |  | Certification of Principal Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act.           |  | Filed herewith
|               |  |                                                                                                           
|32(i)          |  | Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                  |  | Filed herewith
|               |  |                                                                                                           
|99             |  | Proxy Statement for the 2004 Annual Meeting of Shareholders                                                |  | **            

---

|* | Incorporated by reference.
|- | --------------------------

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



15