LENOIR, N.C., May 18 /PRNewswire-FirstCall/ -- Parkway Bank (OTC Bulletin Board: PKWY), a North Carolina state chartered bank headquartered in Lenoir, North Carolina, announced its unaudited first quarter 2009 financial results today. Net income (loss) for the first quarter of 2009 was ($389,000) compared to net income of $121,000 for the first quarter of 2008. Basic and diluted income (loss) per share were ($.28) in the 2009 period, compared to $.09 and $.08 for basic and diluted income per share, respectively, in the 2008 period. Total assets at March 31, 2009 were $126.0 million, compared to $112.1 million at March 31, 2008, an increase of $13.9 million or 12.4%. Funding the growth in total assets was an increase of $17.4 million or 18.3% in total deposits which increased to $112.7 million at March 31, 2009 from $95.3 million at March 31, 2008. During the same period, total loans increased to $93.4 million from $86.5 million, an increase of 7.9%. "The unprecedented national and local economic and financial conditions unlike any since the Great Depression of the 1930's are continuing" said James E. Sponenberg, III, President and CEO of Parkway Bank. "Coupled with prior interest rate cuts by the Federal Reserve, which has served to compress our net interest margin, and significantly increased deposit insurance premiums, our Bank continues to experience an operating loss. We do continue to be "Well Capitalized" by all regulatory measures." Sponenberg further commented that "2009 has started out and will continue to be a challenge for all of us. At this point, it certainly appears that economic conditions will decline further before we see an upturn. We continue to try to meet this challenge on a daily basis." Parkway Bank is a full-service community bank. Founded in 2001, the Bank has offices in Lenoir, Granite Falls and Hudson, NC. This Press Release may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of the Bank's goals and expectations with respect to earnings, earnings per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words "may", "could", "should", "would", "believe", "anticipate", "estimate", "expect", "intend", "plan", "projects", "outlook", or similar expressions. These statements are based upon current beliefs and expectations of the Bank's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond the Bank's control). PARKWAY BANK Financial Highlights As of or for the Three Months Ended March 31 (Unaudited) (Amounts in thousands except per share and share data) ------------------------------ 2009 2008 ---- ---- Income statement data: Net interest income $718 849 Provision for loan losses 566 102 --- --- Net interest income after provision 152 747 Non interest income 228 270 Non interest expense 1,065 882 Income (loss) before income taxes (685) 135 Income taxes (benefit) (296) 14 ---- -- Net income (loss) ($389) 121 ===== === Per share data and shares outstanding: Basic income (loss) per share ($.28) .09 Diluted income (loss) per share (.28) .08 Book value at period end 8.67 10.36 Weighted average common shares outstanding: Basic 1,397 1,412 Diluted 1,397 1,425 Shares outstanding at period end 1,397 1,412 Balance sheet data: Total assets $126,016 112,110 Loans 93,352 86,532 Allowance for loan losses 2,351 1,034 Total deposits 112,733 95,297 Other borrowings 541 1,412 Shareholders' equity 12,115 14,624 Selected performance ratios: Return on average assets (%) (1.25) .44 Return on average shareholders' equity (%) (12.79) 3.33 Net interest margin (%) (1) 2.61 3.37 Net interest spread (%) (2) 2.45 2.83 Efficiency ratio (%) (3) 112.64 78.81 (1) Net interest margin is net interest income (annualized) divided by average interest-earning assets. (2) Net interest spread is the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. (3) The efficiency ratio is non interest expense divided by the total of net interest income and non interest income. DATASOURCE: Parkway Bank CONTACT: James E. Sponenberg, III, President and Chief Executive Officer, Parkway Bank, +1-828-758-1414, Web Site: http://www.parkwaybanknc.com/

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