Parkway Bank Announces Third Quarter and Nine Month Results
November 14 2008 - 4:36PM
PR Newswire (US)
LENOIR, N.C., Nov. 14 /PRNewswire-FirstCall/ -- Parkway Bank (OTC
Bulletin Board: PKWY) today reported results for the three- and
nine-month periods ended September 30, 2008. For the third quarter
ended September 30, 2008, the Company reported a net loss of
$512,093, or $0.36 per diluted share, versus net income of
$210,607, or $0.15 per diluted share, for the third quarter of
2007. For the nine months ended September 30, 2008, the net loss
was $598,269, or $0.42 per share, versus net income of $724,185, or
$0.50 per diluted share, for the year-ago period. The Company and
its banking subsidiary remain well capitalized based on regulatory
capital measures. Lower revenues, a higher provision for loan
losses and an increase in noninterest expense were all factors
contributing to the net loss for the quarter. While noninterest
income increased modestly, the contraction in the Bank's net
interest margin, due in part to the Federal Reserve lowering
interest rates, led to a 13% decline in net interest income.
Additionally, the provision for loan losses, which was $1,088,144
in the third quarter of 2008 versus $91,400 in the year-ago
quarter, increased as a result of higher delinquencies and greater
uncertainties as to collateral valuations given the weakening
economic environment. Finally, noninterest expenses increased 20%,
largely due to expansion related costs, professional fees and other
charges. The net loss for 2008's year-to-date period was generally
from the same factors that led to the quarterly loss. The Company's
nonperforming assets, including nonaccrual loans and other real
estate owned, was $7.4 million or 6.0% of assets, at September 30,
2008, versus $854,000, or 0.78% of assets, at September 30, 2007.
Of this $7.4 million, approximately $6 million related to loans the
Bank made through loan participations that were outside of our
local market area and which have experienced dramatic declines in
real estate values. Additionally, approximately $2 million of these
nonaccruing loans are current in terms of the payment of interest
and principal but were considered impaired due to uncertainties as
to collateral value. The allowance for loan losses was $2,154,275,
or 2.33% of gross loans, as of September 30, 2008, versus $832,000,
or 1.05% of gross loans, at the year-ago date. Although no
assurances can be given that future periods will not require
additional provisions for these credits, the Bank considered the
allowance for loan losses to be adequate at September 30, 2008.
Parkway's total assets grew 15% from $109.3 million at September
30, 2007 to $125.1 million at September 30, 2008. Net loans
outstanding rose 15% to $90.2 million at September 30, 2008 from
$78.7 million at September 30, 2007, while deposits increased 18%
to $110.3 million at September 30, 2008 from $93.1 million at
September 30, 2007. At September 30, 2008, shareholders' equity was
$13.5 million, representing an equity-to-assets ratio of 10.8%,
while the Company's book value per share was $9.60. As of September
30, 2008, the Bank had a total capital ratio of 14.20%, versus a
minimum regulatory requirement of 10.00% for "well capitalized"
banks. In commenting on the results, Parkway Bank President and
CEO, Jim Sponenberg, noted, "We are operating in one of the most
challenging economic environments our Nation has ever seen, and
none of us are immune to those strains. The non-local market loans
that comprise the majority of nonaccruing loans were originated at
a time when there was little reason to expect the current credit
and real estate crisis and were made in order to achieve greater
diversity and to improve yields on our loan portfolio. We have
since revised our lending policies to greatly restrict loans that
are out of our local market area. We do have remaining commitments
on some of these loans, which could lead to an increase in
nonaccruing assets at the end of the year, though we do not expect
the increase to be significant. Given these challenges, it is
important to note that your Bank remains well capitalized, with
higher capital ratios than other banks based in North Carolina. We
will continue to monitor these credits very closely and to make
every effort to resolve these issues." Parkway Bank is a community
bank operating three branches in Caldwell County, North Carolina.
For more information about the Bank and our products and services,
contact Parkway Bank at 828-758-1414, or visit
http://www.parkwaybanknc.com/. This release contains certain
forward-looking statements with respect to the financial condition,
results of operations and business of the Bank. These
forward-looking statements involve risks and uncertainties and are
based on the beliefs and assumptions of management of the Bank and
on the information available to management at the time that these
disclosures were prepared. These statements can be identified by
the use of words like "expect," "anticipate," "estimate" and
"believe," variations of these words and other similar expressions.
Readers should not place undue reliance on forward- looking
statements as a number of important factors could cause actual
results to differ materially from those in the forward-looking
statements. The Bank undertakes no obligation to update any
forward-looking statements. DATASOURCE: Parkway Bank CONTACT: Jim
Sponenberg of Parkway Bank, +1-828-758-1414 Web site:
http://www.parkwaybanknc.com/
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