SUFFOLK, Va., Oct. 23 /PRNewswire-FirstCall/ -- G. Swanigan,
President & CEO of First Bankshares, Inc. (NASDAQ:SUFB), parent
of SuffolkFirst Bank (herein referred to as the Bank),
headquartered in Suffolk, VA commented, "As we work through the
current business cycle, management endeavors to maintain an
adequate capital position. On September 30, 2009, the total risk
based capital ratio stood at 14.72% compared to 15.33% on September
30, 2008 and 15.19% on June 30, 2009. One criterion of regulators
for a bank to be classified as 'well capitalized' is that it must
maintain a total risk based capital ratio of 10% or better." Net
operating results for the recent quarter ended September 30, 2009
were affected by additional expenses associated with the Xenith
merger combined with an increase in the loan loss provision. The
operating results for three months ended September 30, 2009 reflect
a net loss of $942,000 or 41 cents per share compared to a $718,000
loss or 32 cents per share for quarter end June 30, 2009. The net
operating loss for the recent quarter September 30, 2009 can
primarily be attributed to a $930,000 loan loss provision in
addition to merger related expenses of $464,000 for the quarter.
For nine months ended September 30, 2009, the Bank recorded a net
operating loss of $1,387,000 or 61 cents per share compared to net
income of $414,000 or 18 cents per share for the same nine month
period ended September 30, 2008. For the nine month period ended
September 30, 2008, the Bank had no merger related expenses and the
provision for loan losses was $220,000 compared to $1,570,000
provision and merger related expenses of $1,174,000 for nine months
ended September 30, 2009. For the recent three months ended
September 30, 2009, net interest income increased $1,072,000 or
46.7% before provision for loan losses while net interest income
increased 8.6% or $142,000 after the provision expense of $930,000
compared to the June 30, 2009 quarter results. For nine months
ended September 30, 2009, net interest income before the loan loss
provision increased 12.35% or $370,000 while net interest income
after a loan loss provision of $1,570,000 for nine months ended
September 30, 2009 resulted in a decline of $980,000 or 35.3%
compared to the same nine month period ended September 30, 2008.
Non-interest income for the quarter ended September 30, 2009
increased 17.70% or $78,000 while non-interest income for the nine
month period ended September 30, 2009 declined $206,000 or 28.41%
compared to the same nine month period ended September 30, 2008.
The decline in non-interest income for the nine months ended
September 30, 2008 compared to the same period ended September 30,
2009 was primarily the result of a reduction in Federal Home Loan
Bank and Federal Reserve Bank dividends, a lower volume of mortgage
loans originated in the secondary mortgage market which had a
direct affect on mortgage loan origination fees, and a decline in
other loan fees due to a soft loan demand for the nine month period
ending September 30, 2009. Non-interest expense increased
$1,536,000 or 53.33% for the nine month period ended September 30,
2009 compared to the same period 2008. The increase was the result
of $1,174,000 in merger related expenses, an $85,000 salary expense
accrual adjustment, an increase in FDIC assessments of $143,000,
and an increase in deferred loan expense of $125,000. For the
recent three months ended September 30, 2009, non-interest expense
increased $1,649,000 primarily from an increase in merger related
expenses, an increase in FDIC assessment, an increase in salary
accrual adjustment, the write off of specific miscellaneous assets,
and a decrease in deferred loan expense credits. Interest rates
remain at historically low levels and the difference between cost
of funds on time deposits and rates earned on loans and investments
continue to be squeezed as rates earned on variable rate loans and
investments re-price faster than rates paid on time deposits.
Declining interest rates paid on time deposits over the past six
months are evidence of the Bank's improved net interest margin
(NIM) which increased 14 basis points from 2.57% to 2.71% for the
period comparison September 30, 2008 and 2009, respectively, while
NIM remained relatively flat and declined 3 basis points for the
recent three month quarter comparison ended September 30, 2009.
Pressures surrounding the current business environment have
affected the performance of individual commercial loans within our
loan portfolio, specifically commercial loans purchased from
Silverton Bank National Association. Silverton was closed on May 1,
2009 by the Comptroller of the Currency, and the FDIC was appointed
as its receiver and charged with the duty of winding up the affairs
of Silverton and its subsidiary Specialty Finance Group (SFG).
SuffolkFirst Bank was advised that SFG intends to continue to
administer participation agreements in accordance with past
practices while the FDIC intends to wind up the affairs of
Silverton. On September 30, 2009, SuffolkFirst Bank had three
participation loans with Silverton which represented 4.85% of the
loan portfolio and totaled $5,459,000. In the normal course of
business, the Bank also purchased 10 loans from SFG which totaled
$15,959,000 and represented 14.18% of the total loan portfolio as
of September 30, 2009. Adverse economic conditions have affected
specific loans within this section of our loan portfolio which has
a direct relationship to the increase in non-performing loans and
the increase in the Allowance for Lease and Loan Losses for the
nine month period ended September 30, 2009. On September 30, 2009,
non-performing assets (NPA) were $7,140,000 compared to $3,400,000
on June 30, 2009 and $1,800,000 on September 30, 2008. Management
continues to monitor the loan portfolio through this challenging
economic environment and is attentively focused upon the NPA. At
September 30, 2009, the Allowance for Lease and Loan Losses (ALLL)
increased to $3,002,000 and represented 2.67% of total loans
compared to $2,190,000 and 1.92% on June 30, 2009 and $1,114,000 or
0.95% on September 30, 2008. Loan losses net of recoveries for the
nine month period ended September 30, 2009 were $255,000 compared
to $48,000 for the same period ended September 30, 2008, and for
the quarter ended June 30, 2009 net loan losses were $133,000. The
ALLL reflects Management's analysis of the loan portfolio and
factors in the underlying collateral value of loans, strategies for
the resolution of problem loans, and the influence of economic
conditions on the performance of the portfolio. Asset growth over
the past year declined slightly as we reported total assets on
September 30, 2008 at $170,000,000 while assets stood at
$167,000,000 on September 30, 2009. Deposits for the period
comparison declined $14,000,000 while management took advantage of
reduced rates on other borrowed funds which increased $11,000,000
to offset the decline in time deposits. Securities grew $5,702,000
or 14.8% for the period September 30, 2008 to September 30, 2009
while demand for loans was somewhat disappointing and resulted in a
decline of 6.49% or $7,610,000 in net loans from September 30, 2008
to September 30, 2009. We are pleased to announce that shareholders
of First Bankshares and Xenith Corporation approved the merger of
the two companies on October 15, 2009. Shareholder approval of this
transaction represents a major step forward and a significant
opportunity for First Bankshares, SuffolkFirst Bank, and our
shareholders, customers and employees. The addition of Xenith's
human and financial capital to First Bankshares' existing strengths
will assist us in reaching out to new markets in Virginia while
also enhancing our ability to serve larger segments within First
Bankshares' current footprint. We are pleased to announce that on
September 25, 2009 the Virginia State Corporation Commission
approved the merger pending receipt of final regulatory approval
from the Federal Reserve. First Bankshares and Xenith management
are optimistic of a November closing date for the merger and are
equally excited about the future opportunities for the combined
company. 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. SuffolkFirst Bank Summary Balance Sheets (in thousands)
Sept. 30, Sept. 30, 2008 2009 Increase/ % Increase/ (unaudited)
(unaudited) (Decrease) (Decrease) Cash and due from banks $2,303
$2,778 $475 20.63% Securities available-for-sale, at fair value
38,576 44,278 5,702 14.78% Loans, net 117,182 109,572 (7,610)
-6.49% Other assets 11,475 10,371 (1,104) -9.62% ------ ------
Total assets $169,536 $166,999 (2,537) -1.50% ======== ========
Deposits Demand $21,365 $21,121 (244) -1.14% Savings 2,837 3,628
791 27.88% Time 108,867 94,397 (14,470) -13.29% ------- ------
Total deposits 133,069 119,146 (13,923) -10.46% Federal funds
purchased and borrowed funds 20,003 30,530 10,527 52.63% Other
liabilities 1,046 1,502 456 43.59% ----- ----- Total liabilities
154,118 151,178 (2,940) -1.91% Total stockholders' equity 15,418
15,821 403 2.61% ------ ------ Total liabilities and stockholders'
equity $169,536 $166,999 (2,537) -1.50% ======== ======== Summary
Statements of Income (in thousands except for per share data) Nine
Months Ended Sept. 30, Sept. 30, 2008 2009 Increase/ % Increase/
(unaudited) (unaudited) (Decrease) (Decrease) Interest income
$7,276 $6,776 $(500) -6.87% Interest expense 4,280 3,410 $(870)
-20.33% ----- ----- Net interest income 2,996 3,366 $370 12.35%
Provision for loan losses 220 1,570 $1,350 613.64% --- ----- Net
interest income after provision for loan losses 2,776 1,796 $(980)
-35.30% Non interest income 725 519 $(206) -28.41% Non interest
expense 2,880 4,416 $1,536 53.33% ----- ----- Net income (loss)
before income tax 621 (2,101) $(2,722) -438.33% Income tax expense
(benefit) 207 (714) $(921) -444.93% --- ----- Net income (loss)
$414 $(1,387) $(1,801) -435.02% ==== ======= Income (loss) per
share, basic $0.18 $(0.61) $(0.79) -435.02% ===== ====== Key Ratios
Sept. Sept. Increase/ % Increase/ 2008 2009 (Decrease) (Decrease)
Return on average assets 0.32% -1.06% -1.38% -431.25% Return on
average equity 3.26% -1.91% -5.17% -158.59% Net interest margin
2.57% 2.71% 0.14% 5.45% Average earning assets/ total average
assets 94.24% 93.42% -0.82% -0.87% Average loans/average deposits
89.60% 88.32% -1.28% -1.43% Allowance for loan losses/ period end
loans 0.94% 2.67% 1.73% 184.04% Period end shareholders' equity/
period end assets 9.09% 9.47% 0.38% 4.18% Tier 2 risk-based capital
ratio 15.33% 14.72% -0.61% -3.98% Efficiency ratio 79.16% 183.87%
104.71% 132.28% Tier 1 capital ratio 14.39% 13.45% -0.94% -6.53%
SuffolkFirst Bank Summary Balance Sheets (in thousands) June 30,
Sept. 30, 2009 2009 Increase/ % Increase/ (unaudited) (unaudited)
(Decrease) (Decrease) Cash and due from banks $3,900 $2,778
$(1,122) -28.77% Securities available-for-sale, at fair value
46,287 44,278 (2,009) -4.34% Loans, net 111,848 109,572 (2,276)
-2.03% Other assets 10,005 10,371 366 3.66% ------ ------ Total
assets $172,040 $166,999 (5,041) -2.93% ======== ======== Deposits
Demand $20,051 $21,121 1,070 5.34% Savings 3,687 3,628 (59) -1.60%
Time 105,972 94,397 (11,575) -10.92% ------- ------ Total deposits
129,710 119,146 (10,564) -8.14% Federal funds purchased and
borrowed funds 25,004 30,530 5,526 22.10% Other liabilities 1,465
1,502 37 2.53% ----- ----- Total liabilities 156,179 151,178
(5,001) -3.20% Total stockholders' equity 15,861 15,821 (40) -0.25%
------ ------ Total liabilities and stockholders' equity $172,040
$166,999 (5,041) -2.93% ======== ======== Summary Statements of
Income (in thousands except for per share data) Six Months Nine
Months June 30, Sept. 30, 2009 2009 Increase/ % Increase/
(unaudited) (unaudited) (Decrease) (Decrease) Interest income
$4,618 $6,776 $2,158 46.73% Interest expense 2,324 3,410 $1,086
46.73% ----- ----- Net interest income 2,294 3,366 $1,072 46.73%
Provision for loan losses 640 1,570 $930 145.31% --- ----- Net
interest income after provision for loan losses 1,654 1,796 $142
8.59% Non interest income 441 519 $78 17.69% Non interest expense
2,767 4,416 $1,649 59.60% ----- ----- Net income (loss) before
income tax (672) (2,101) $(1,429) 212.65% Income tax expense
(benefit) (228) (714) $(486) 213.16% ----- ----- Net income (loss)
$(444) $(1,387) $(943) 212.39% ===== ======= Income (loss) per
share, basic $(0.20) $(0.61) $(0.35) 179.41% ====== ====== Key
Ratios June 30, Sept. 30, Increase/ % Increase/ 2009 2009
(Decrease) (Decrease) Return on average assets -0.50% -1.06% -0.56%
112.00% Return on average equity -5.21% -1.91% 3.30% -63.34% Net
interest margin 2.74% 2.71% -0.03% -1.09% Average earning assets/
total average assets 93.64% 93.34% -0.30% -0.32% Average
loans/average deposits 87.80% 88.32% 0.52% 0.59% Allowance for loan
losses/ period end loans 1.92% 2.67% 0.75% 39.06% Period end
shareholders' equity/ period end assets 9.54% 9.47% -0.07% -0.73%
Tier 2 risk-based capital ratio 15.19% 14.72% -0.47% -3.09%
Efficiency ratio 101.19% 183.87% 82.68% 81.71% Tier 1 capital ratio
13.94% 13.45% -0.49% -3.52% DATASOURCE: First Bankshares, Inc.
CONTACT: Darrell G. Swanigan, President & CEO, First Bankshares
Inc. and SuffolkFirst Bank, +1-757-934-8200,
Copyright