Parkway Bank Reports First Quarter 2010 Financial Results

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May 17, 2010, 05:11 ET

LENOIR, N.C., May 17 /PRNewswire-FirstCall/ -- Parkway Bank (OTC Bulletin Board: PKWY), a North Carolina state chartered bank headquartered in Lenoir, North Carolina, announced its first quarter 2010 financial results today.

Net income (loss) for the first quarter of 2010 was ($52,000) compared to ($389,000) for the first quarter of 2009. Basic and diluted income (loss) per share were ($.04) in the 2010 period, compared to ($.28) for basic and diluted income per share in the 2009 period.

Due to the continued deterioration in capital, we have been reducing our asset size. Total assets at March 31, 2010 were $118.7 million, compared to $126.0 million at March 31, 2009 a decrease of $7.3 million or 5.8%. Total deposits declined to $107.1 million at March 31, 2010 from $112.7 million at March 31, 2010 a decrease of $5.6 million or 5.0%. During the same period, total loans decreased to $86.2 million from $93.3 million, a decrease of $7.1 million or 7.6%.

"We continue to be negatively impacted by the poor economic and financial conditions both on a national and local level. However, our loss of $52,000 in the first quarter of 2010 was our best quarterly performance since 2008. Our results were favorably impacted by an improving net interest margin and the favorable disposal of certain foreclosed real estate. We still have significant asset quality issues that we deal with daily," said James E. Sponenberg, III, President and CEO of Parkway Bank. "We are looking at all possible strategic alternatives, including the raising of additional capital and will begin a capital raising effort within the next few weeks. With our continued operating losses, we are "Adequately Capitalized" by all regulatory measures, but are striving to regain 'Well Capitalized' status."

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). The Bank undertakes no obligation to update any forward-looking statements.

PARKWAY BANK
Financial Highlights
(In Thousands Except Share and Per Share Data)
(Unaudited)

			As of or For The
			Three Months Ended
			March 31
			2010	2009
Income statement data:
	Net interest income		$ 875	718
	Provision for loan losses		204	566
	Net interest income after provision		671	152
	Non interest income		433	228
	Non interest expense		1,156	1,065
	Income (loss) before income taxes		(52)	(685)
	Income taxes (benefit)		-	(296)
	Net income (loss)		($ 52)	(389)

Per share data and shares outstanding:
	Basic income (loss) per share		($ .04)	(.28)
	Diluted income (loss) per share		(.04)	(.28)
	Book value at period end		5.84	8.67
	Weighted average common shares outstanding:
		Basic	1,397	1,397
		Diluted	1,397	1,397
	Shares outstanding at period end		1,397	1,397

Balance sheet data:
	Total assets		$118,697	126,016
	Loans		86,243	93,352
	Allowance for loan losses		2,791	2,351
	Total deposits		107,145	112,733
	Other borrowed funds		3,000	541
	Shareholders' equity		8,154	12,115

Selected performance ratios:
	Return on average assets (%)		(.18)	(1.25)
	Return on average shareholders' equity (%)		(2.48)	(12.79)
	Net interest margin (%) (1)		3.48	2.61
	Net interest spread (%) (2)		3.45	2.45
	Efficiency ratio (%) (3)		88.34	112.64


(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.