Parkway Bank Reports First Quarter 2011 Financial Results

LENOIR, N.C., May 23, 2011 /PRNewswire/ -- Parkway Bank (OTCBB: PKWY), a North Carolina state chartered bank headquartered in Lenoir, North Carolina, announced its first quarter 2011 financial results today.

Net income (loss) for the first quarter of 2011 was ($297,000) compared to ($52,000) for the first quarter of 2010.  Basic and diluted income (loss) per share were ($.21) in the 2011 period, compared to ($.04) for basic and diluted income per share in the 2010 period.

Due to the continued deterioration in capital, we have been reducing our asset size.  Total assets at March 31, 2011 were $115.3 million, compared to $118.7 million at March 31, 2010 a decrease of $3.4 million or 2.9%.  Total deposits declined to $107.0 million at March 31, 2011 from $107.1 million at March 31, 2010 a decrease of $.1 million or .1%.  During the same period, total loans decreased to $85.9 million from $86.2 million, a decrease of $.3 million or .4%.

"We continue to be negatively impacted by the poor economic and financial conditions both on a national and local level.  The positive signs that we are seeing are being more than offset by the overwhelming burden of asset quality issues," said James E. Sponenberg, III, President and CEO of Parkway Bank.  "We continue to explore all possible strategic alternatives, including the raising of additional capital.  We will keep you informed as we move forward in our efforts to improve the capital and financial situation of the Bank."

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 Per Share Data)
(Unaudited)
			As of or For The
			Three  Months Ended
			March 31
			2011		2010
Income statement data:
	Net interest income		$  830		$  875
	Provision for loan losses		137		204
	Net interest income after provision		693		671
	Non interest income		230		433
	Non interest expense		1,220		1,156
	Income (loss) before income taxes		(297)		(52)
	Income taxes (benefit)		-		-
	Net income (loss)		($   297)		($   52)
Per share data and shares outstanding:
	Basic income (loss) per share		($  .21)		($  .04)
	Diluted income (loss) per share		(.21)		(.04)
	Book value per share at period end		3.59		5.84
	Weighted average common shares outstanding (000's):
		Basic	1,397		1,397
		Diluted	1,397		1,397
	Shares outstanding at period end		1,397		1,397
Balance sheet data:
	Total assets		$115,278		$118,697
	Loans		85,887		86,243
	Allowance for loan losses		4,186		2,791
	Total deposits		106,997		107,145
	Other borrowed funds		3,000		3,000
	Shareholders' equity		5,010		8,154
Selected performance ratios:
	Return on average assets (%)		(1.02)		(.18)
	Return on average shareholders' equity (%)		(21.09)		(2.48)
	Net interest margin (%) (1)		3.23		3.48
	Net interest spread (%) (2)		3.21		3.45
	Efficiency ratio (%) (3)		115.11		88.34
(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.

SOURCE Parkway Bank

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