SUFB First Bankshares (MM)

SUFFOLK, Va., April 28 /PRNewswire-FirstCall/ -- Darrell G. Swanigan, President & CEO of First Bankshares, Inc. (NASDAQ:SUFB), parent of SuffolkFirst Bank, headquartered in Suffolk, VA commented, "In the face of the most challenging economic cycle of modern day, we are pleased to report net income of $274,000 or 12 cents per share for the first quarter 2009 which represents an increase of 1 cent per share over March 31, 2008 net income of $260,000, and compared to the 4th quarter 2008 loss of $169,000, income increased $443,000 or 19 cents per share for the March 31, 2009 quarter. On March 31, 2008 the net interest margin was 2.75% compared to March 31, 2009 net interest margin of 2.76%, and the net interest margin for the 4th quarter ended December 31, 2008 was 2.99%." Management's strategic focus since opening in January 2003 is to enhance shareholder value by managing growth within the parameters of a "well capitalized" bank. Therefore, we are pleased to report that on March 31, 2009 capital remained strong and Tier 2 capital to risk based assets stood at 15.25% compared to 14.91% on March 31, 2008 and 15.02% on December 31, 2008. According to regulatory capital guidelines and management's opinion, First Bankshares and SuffolkFirst Bank are considered "well capitalized" with a risk based capital to risk based asset ratio above the minimum 10% regulatory guidelines. Assets of $174,130,000 as of March 31, 2009 declined 2.90% compared to the same period end March 31, 2008. This modest decline is the result of a soft loan demand in the 1st quarter 2009, and in comparison to 1st quarter end March 31, 2009 vs. December 31, 2008, assets declined by 5.45% primarily for the same reason. Net interest income for the quarter end March 31, 2009 compared to the same period March 2008 increased 14.90% or $153,000 as a result of a 17.87% decline in interest expense while interest income declined slightly by 4.16%. For the quarter comparison December 31, 2008 and March 31, 2009 net interest income declined by 8.03% or $103,000. Non interest income for quarter end March 2009 of $315,000 declined by 25% or $105,000 compared to the March 2008 quarter end. Non interest income for the March 2009 quarter included a pretax gain on the sale of securities of $217,000 compared to a pretax gain on securities in the first quarter 2008 of $265,000. The impact of economic pressures within our market has influenced some business sectors of our local economy but not to the extent of other specific areas of the nation. While we are cautiously optimistic of an improving economy in 2009, we continue to monitor the adequacy of our loan loss reserve as it relates to stress characteristics within the portfolio and the effect this tense economic cycle has on the performance of the loan portfolio. Historically, over the past 6 years our loan portfolio has outperformed our piers as we have had insignificant loan losses. While recent performance trends in the loan portfolio reflect a moderate sign of stress due to the current economic environment, management is optimistic about the future performance of the loan portfolio and the future growth of the Bank as we execute our strategic plan to maintain a well capitalized bank to include an adequate Allowance for Loan Loss. Total non performing loans of $1,051,000 for the quarter end March 31, 2009 represent 0.92% of total outstanding loans and 66% of the Allowance for Loan Loss. The Allowance for Loan Loss stood at $1,594,000 and represents 1.40% of total loans at quarter end March 31, 2009 after a charge of $133,000 and a provision of $40,000 in the first quarter 2009 compared to .90% and 1.44% respectively as of March 31, 2008 and December 31, 2008. Non performing assets at quarter end March 31, 2009 include Other Real Estate Owned (OREO) of $650,000 which represents 0.37% of total assets and 41% of the Allowance for Loan Loss. As previously reported, our solid capital has supported past growth opportunities and management is confident that our strategic plan to maintain a well capitalized bank will carry us through the pressures of the current economic environment. This press release contains forward-looking statements. Words such as "anticipates," "believes," "intends," "should," "expects," "will," variations of similar expressions are intended to identify forward-looking statements. These statements are management's beliefs as to the expected outcome of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, and degree of occurrence. Results and outcome may differ from what may be expressed or forecasted in forward-looking statements. Factors that could make a difference include, among others, changes in local and national economies, or market conditions; changes in interest rates; regulations and accounting principles; changes in policies or guidelines; loan demand and asset quality, including real estate values and collateral values; deposit flow; and the impact of competition from traditional or new sources. These and other issues that may emerge could affect decisions and results to differ materially from current expectations. First Bankshares, Inc. assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release. First Bankshares, Inc. and Subsidiary Consolidated Summary Balance Sheets (in thousands) Mar. 31, Mar. 31, 2008 2009 Increase/ %Increase/ (unaudited) (unaudited) (Decrease) (Decrease) Cash and due from banks $5,089 $4,589 $(500) -9.83% Securities available-for-sale, at fair value 53,780 47,286 (6,494) -12.08% Loans, net 109,432 112,000 2,568 2.35% Other assets 10,293 10,255 (38) -0.37% Total assets $178,594 $174,130 (4,464) -2.50% Deposits Demand $22,375 $20,099 (2,276) -10.17% Savings 2,403 3,370 967 40.24% Time 92,286 107,962 15,676 16.99% Total deposits 117,064 131,431 14,367 12.27% Federal funds purchased and borrowed funds 43,279 25,000 (18,279) -42.24% Other liabilities 1,511 1,250 (261) -17.27% Total liabilities 161,854 157,681 (4,173) -2.58% Total stockholders' equity 16,740 16,449 (291) -1.74% Total liabilities and stockholders' Equity $178,594 $174,130 (4,464) -2.50% Summary Statements of Income (in thousands except for per share data) Quarter Ended Mar. 31, Mar. 31, 2008 2009 Increase/ %Increase/ (unaudited) (unaudited) (Decrease) (Decrease) Interest income $2,454 $2,352 (102) -4.16% Interest expense 1,427 1,172 (255) -17.87% Net interest income 1,027 1,180 153 14.90% Provision for loan losses 60 40 (20) -33.33% Net interest income after provision for loan losses 967 1,140 173 17.89% Non interest income 420 315 (105) -25.00% Non interest expense 994 1,039 45 4.53% Net income before income tax 393 416 23 5.85% Income tax expense 133 142 9 6.77% - Net income $260 $274 14 5.38% Income per share, basic $0.11 $0.12 0.01 8.75% Key Ratios Mar. 31, Mar. 31, Increase/ %Increase/ 2008 2009 (Decrease) (Decrease) Return on average assets 0.63% 0.68% 0.05% 7.94% Return on average equity 6.18% 6.46% 0.28% 4.53% Net interest margin 2.75% 2.76% 0.01% 0.36% Average earning assets/total average assets 93.28% 93.67% 0.39% 0.42% Average loans/average deposits 93.71% 87.73% -5.98% -6.38% Allowance for loan losses/period end loans 0.90% 1.40% 0.50% 55.56% Period end shareholders' equity/ period end assets 9.37% 9.45% 0.08% 0.85% Tier two risk-based capital ratio 14.91% 15.25% 0.34% 2.28% Efficiency ratio 80.00% 79.00% -1.00% -1.25% First Bankshares, Inc. and subsidiary SuffolkFirst Bank Selected Financial Information (Unaudited) (In thousands except for per share data) Summary Consolidated Balance Sheets Dec. 31, Mar. 31, 2008 2009 Increase/ %Increase/ (unaudited)(unaudited) (Decrease) (Decrease) Cash and due from banks $4,542 $4,589 $47 1.03% Securities available-for-sale, at fair value 53,413 47,286 (6,127) -11.47% Loans, net 115,560 112,000 (3,560) -3.08% Other assets 10,644 10,255 (389) -3.65% Total assets $184,159 $174,130 (10,029) -5.45% Deposits Demand $20,691 $20,099 (592) -2.86% Savings 2,951 3,370 419 14.20% Time 106,643 107,962 1,319 1.24% Total deposits 130,285 131,431 1,146 0.88% Federal funds purchased and borrowed funds 36,011 25,000 (11,011) -30.58% Other liabilities 1,153 1,250 97 8.41% Total liabilities 167,449 157,681 (9,768) -5.83% Total shareholders' equity 16,710 16,449 (261) -1.56% Total liabilities and shareholders' Equity $184,159 $174,130 (10,029) -5.45% Summary Consolidated Statements of Income (in thousands except for per share data) Three Months Ended Dec. 31, Mar. 31, 2008 2009 Increase/ %Increase/ (unaudited) (unaudited) (Decrease) (Decrease) Interest income $ 2,561 $ 2,352 $(209) -8.16% Interest expense 1,278 1,172 $(106) -8.29% Net interest income 1,283 1,180 $(103) -8.03% Provision for loan losses 615 40 $(575) -93.50% Net interest income after provision for loan losses 668 1,140 $472 70.66% Non interest income 86 315 $229 266.28% Non interest expense 1,013 1,039 $26 2.57% Net income (loss) before income Tax (259) 416 $675 260.62% Income tax benefit (expense) 90 (142) $(232) 257.78% Net income (loss) $(169) $274 $443 262.13% Income (loss) per share, basic $(0.07) $0.12 $0.19 262.13% Key Ratios Dec. 31, Mar. 31, Increase/ %Increase/ 2008 2009 (Decrease) (Decrease) Return on average assets -0.37% 0.68% 1.05% 283.78% Return on average equity -4.05% 6.46% 10.51% 259.51% Net interest margin 2.99% 2.76% -0.23% -7.69% Average earning assets/total average assets 94.07% 93.67% -0.40% -0.43% Average loans/average deposits 89.21% 87.73% -1.48% -1.66% Allowance for loan losses/period end loans 1.44% 1.40% -0.04% -2.78% Period end shareholders' equity/ period end assets 9.17% 9.45% 0.28% 3.05% Tier 2 risk-based capital ratio 15.02% 15.25% 0.23% 1.53% Efficiency ratio 73.98% 79.00% 5.02% 6.79% DATASOURCE: First Bankshares, Inc. CONTACT: Darrell G. Swanigan, President & CEO of First Bankshares, Inc. and SuffolkFirst Bank, +1-757-934-8200,

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