Parkway Bank Reports Third Quarter 2010 Financial Results

LENOIR, N.C., Nov. 16, 2010 /PRNewswire-FirstCall/ -- Parkway Bank (OTC Bulletin Board: PKWY), a North Carolina state chartered bank headquartered in Lenoir, North Carolina, announced its third quarter 2010 financial results today.

Net income (loss) for the third quarter of 2010 was ($295,000) compared to ($1,055,000) for the third quarter of 2009.  Basic and diluted income (loss) per share were ($.21) in the 2010 period compared to ($.75) for basic and diluted income (loss) per share in the 2009 period.  For the nine months ended September 30, 2010, net income (loss) was ($1,603,000) compared to ($2,395,000) for the nine months ended September 30, 2009.  Basic and diluted income (loss) per share were ($1.15) in the 2010 period compared to ($1.71) in the 2009 period.

Due to the continued deterioration in our capital, we continue to limit our asset growth.  Total assets at September 30, 2010 were $115.8 million, compared to $123.1 million at September 30, 2009 a decrease of $7.3 million or 5.9%.  Total deposits declined to $105.6 million at September 30, 2010 from $109.3 million at September 30, 2009 a decrease of $3.7 million or 3.4%.  During the same period, total loans decreased to $83.1 million from $90.5 million, a decrease of $7.4 million or 8.2%.

"As a community bank our performance should be reflective of our community's economy and it does.  We are negatively impacted by poor economic and financial conditions both on a national and local level.  Asset quality issues continue to be dealt with daily, and in particular our participation loan and foreclosed real estate portfolios," said James E. Sponenberg, III, President and CEO of Parkway Bank.  "The issues raised in the Consent Order with the FDIC and NC State Banking Commission are being addressed and many have been completed.  One of the primary issues involves the raising of additional capital and we are well into an effort of doing so through a private placement offering. We continue to be "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.

Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("the Act") was signed into law on July 21, 2010. The Act is a significant piece of legislation that will have major effects on the financial services industry, including the organization, financial condition and operations of banks and bank holding companies. Management is currently evaluating the impact of the Act; however, uncertainty remains as to its operational impact, which could have a material adverse impact on the Bank's business, results of operations and financial condition. Many of the provisions of the Act are aimed at financial institutions that are significantly larger than the Bank. Notwithstanding this, there are many other provisions that the Bank is subject to and will have to comply with, including any new rules applicable to the Bank promulgated by the Bureau of Consumer Financial Protection, a new regulatory body dedicated to consumer protection. As rules and regulations are promulgated by the agencies responsible for implementing and enforcing the Act, the Bank will have to address each to ensure compliance with applicable provisions of the Act and compliance costs are expected to increase.

SOURCE Parkway Bank