Parkway Bank Reports Third Quarter 2009 Financial Results

LENOIR, N.C., Nov. 17  /PRNewswire-FirstCall/ -- Parkway Bank (OTC Bulletin Board: PKWY), a North Carolina state chartered bank headquartered in Lenoir, North Carolina, announced its unaudited third quarter 2009 financial results today.

Net income (loss) for the third quarter of 2009 was ($1,054,000) compared to ($512,000) for the third quarter of 2008.  Basic and diluted income (loss) per share were ($.75) in the 2009 period, compared to ($.36) for basic and diluted income per share in the 2008 period.  For the first nine months of 2009, net income (loss) was ($2,395,000) compared to ($598,000) in the first nine months of 2008.  Basic and diluted income (loss) per share were ($1.71) and ($.42) in the respective periods.

Total assets at September 30, 2009 were $123.1 million, compared to $125.1 million at September 30, 2008, a decrease of $2.0 million or 1.6%.  Total deposits declined to $109.3 million at September 30, 2009 from $110.3 million at September 30, 2008, a decrease of $1.0 million or .9%.  During the same period, total loans decreased to $90.5 million from $92.3 million, a decrease $1.8 million or 2.0%.

"The unprecedented national and local economic and financial conditions unlike any since the Great Depression of the 1930's are continuing, although we are seeing the beginnings of some positive signs" said James E. Sponenberg, III, President and CEO of Parkway Bank.  "Coupled with asset quality issues and prior interest rate cuts by the Federal Reserve, which has served to compress our net interest margin, and significantly increased deposit insurance premiums and accounting and auditing expenses, our Bank continues to experience an operating loss. We do continue to be "Well Capitalized" by all regulatory measures."

Sponenberg further commented that "2009 continues to be a challenge for all of us and 2010 will be as well.  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).  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    As of or For The
                                Three Months Ended  Nine Months Ended
                                   September 30        September 30
                                ------------------  -----------------
                                    2009     2008      2009    2008
                                    ----     ----      ----    ----
  Income statement data:
    Net interest income             $773      811     2,195   2,509
    Provision for loan losses        684    1,088     1,966   1,694
    Net interest income after
     provision                        89     (277)      229     815
    Non interest income              231      212       679     763
    Non interest expense           1,078      910     3,303   2,802
    Income (loss) before
     income taxes                   (758)    (975)   (2,395) (1,224)
    Income taxes (benefit)           296     (463)        -    (626)

    Net income (loss)             (1,054)    (512)   (2,395)   (598)

  Per share data and shares
   outstanding:
    Basic income (loss) per share  ($.75)    (.36)    (1.71)   (.42)
    Diluted income (loss) per
     share                          (.75)    (.36)    (1.71)   (.42)
    Book value at period end        7.30     9.60      7.30    9.60
    Weighted average common
     shares outstanding:
      Basic                        1,397    1,410     1,397   1,411
      Diluted                      1,397    1,410     1,397   1,411
    Shares outstanding at
     period end                    1,397    1,402     1,397   1,402

  Balance sheet data:
    Total assets                $123,143  125,133         -       -
    Loans                         90,496   92,313         -       -
    Allowance for loan losses      2,807    2,154         -       -
    Total deposits               109,297  110,300         -       -
    Other borrowed funds           3,000      953         -       -
    Shareholders' equity          10,202   13,465         -       -

  Selected performance ratios:
    Return on average assets (%)   (3.38)   (1.71)    (2.54)   (.70)
    Return on average
     shareholders' equity (%)     (37.83)  (14.78)   (27.18)  (5.59)
    Net interest margin (%) (1)     2.85     2.92      2.69    3.20
    Net interest spread (%) (2)     2.78     2.50      2.60    2.74
    Efficiency ratio (%) (3)      107.42    88.95    114.93   85.63


  (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

of Parkway Bank, [phone], 



Web Site:  http://www.parkwaybanknc.com/ 

Copyright