Parkway Bank Reports Second Quarter 2011 Financial Results

LENOIR, N.C., Aug. 16, 2011 /PRNewswire/ -- Parkway Bank (OTCBB: PKWY), a North Carolina state chartered bank headquartered in Lenoir, North Carolina, announced its second quarter 2011 financial results today.

Net income (loss) for the second quarter of 2011 was ($1,370,000) compared to ($1,257,000) for the second quarter of 2010.  Basic and diluted income (loss) per share were ($.98) in the 2011 period compared to ($.90) for basic and diluted income (loss) per share in the 2010 period.  For the six months ended June 30, 2011, net income (loss) was ($1,667,000) compared to ($1,308,000) for the six months ended June 30, 2010.  Basic and diluted income (loss) per share were ($1.19) in the 2011 period compared to ($.94) in the 2010 period.

Total assets at June 30, 2011 were basically unchanged at $119.1 million, compared to $119.0 million at June 30, 2010. Total deposits increased to $112.0 million at June 30, 2011 from $107.7 million at June 30, 2010, an increase of $4.3 million or 4.0%.  During the same period, total loans decreased to $84.1 million from $85.3 million, a decrease of $1.2 million or 1.4%.

"We are a community bank whose performance is reflective of our community's economy.  We continue to be negatively impacted by poor economic and financial conditions both on a national and local level.  We still have significant asset quality issues that we deal with daily, particularly in our participation loan and foreclosed real estate portfolios," said James E. Sponenberg, III, President and CEO of Parkway Bank.  "We are making progress in dealing with the issues raised in the Consent Order recently entered into with the FDIC and NC State Banking Commission.  One of the primary issues involves the raising of additional capital and we are working diligently to announce a capital raising plan in the near future."

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				As of or For The
			Three Months Ended				Six Months Ended
			June 30				June 30
			2011		2010		2011		2010
Income statement data:
	Net interest income		$   852		$   807		$ 1,682		$ 1,682
	Provision for loan losses		1,166		915		1,303		1,119
	Net interest income (loss) after provision		(314)		(108)		379		563
	Non interest income		238		313		468		746
	Non interest expense		1,294		1,462		2,514		2,617
	Income (loss) before income taxes		(1,370)		(1,257)		(1,667)		(1,308)
	Income taxes (benefit)		-		-		-		-
	Net income (loss)		($  1,370)		($  1,257)		($  1,667)		($  1,308)
Per share data and shares outstanding:
	Basic income (loss) per share		($    .98)		($    .90)		(1.19)		(.94)
	Diluted income (loss) per share		(.98)		(.90)		(1.19)		(.94)
	Book value at period end		2.68		5.02		2.68		5.02
	Weighted average common shares outstanding (000's):
		Basic	1,397		1,397		1,397		1,397
		Diluted	1,397		1,397		1,397		1,397
	Shares outstanding at period end		1,397		1,397		1,397		1,397
Balance sheet data:
	Total assets		$119,119		$119,073		-		-
	Loans		84,101		85,251		-		-
	Allowance for loan losses		3,216		3,627		-		-
	Total deposits		112,028		107,664		-		-
	Other borrowed funds		3,000		4,000		-		-
	Shareholders' equity		3,742		7,013		-		-
Selected performance ratios:
	Return on average assets (%)		(4.57)		(4.24)		(2.78)		(2.23)
	Return on average shareholders' equity (%)		(114.43)		(63.44)		(70.21)		(31.47)
	Net interest margin (%) (1)		3.27		3.15		3.20		3.31
	Net interest spread (%) (2)		3.26		3.14		3.19		3.30
	Efficiency ratio (%) (3)		118.67		130.54		116.92		107.79
(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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