Parkway Bank Announces 2004 Year End Results LENOIR, N.C., Feb. 14 /PRNewswire-FirstCall/ -- Parkway Bank (OTC:PKWY) (BULLETIN BOARD: PKWY) announced today that its net income for the year ended December 31, 2004, was $321,886, compared to net income of $128,080 for the year ended December 31, 2003. Net income the fourth quarter of 2004 was $189,041, compared to net income of $24,704 in the fourth quarter of 2003 and net income of $102,533 in the third quarter of 2004. Total assets were $73.9 million at December 31, 2004, compared to $56.9 million at December 31, 2003, an increase of $17.0 million or 29.8%. Deposits and loans increased to $60.8 million and $51.1 million, from $50.1 million and $41.8 million in 2003, respectively. At December 31, 2004, shareholders' equity was $11.4 million and the book value per share of the Bank's common stock was $9.88. Parkway Bank President and CEO, Gary Clawson, in commenting on the results, noted, "fiscal year results proved to be on target with our expectations and we believe that Parkway is entering a phase that will yield earnings results consistent with our long-term goals. All the hard work that every employee put forth over the last three years is beginning to show up on our bottom line." Parkway Bank is a community bank operating two branches in Caldwell County, North Carolina. For more information about the Bank and our products and services, contact Parkway Bank at 828-758-1414, or visit http://www.parkwaybanknc.com/ . This release contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Bank. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of the Bank and on the information available to management at the time that these disclosures were prepared. These statements can be identified by the use of words like "expect," "anticipate," "estimate" and "believe," variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. The Bank undertakes no obligation to update any forward-looking statements. PARKWAY BANK AND SUBSIDIARY CONSOLIDATED BALANCE SHEET December 31, 2004 and 2003 2004 2003 ASSETS Cash and due from banks $1,112,971 $509,920 Federal funds sold 6,507,000 5,150,000 Investment securities available for sale, at fair value 11,337,962 6,046,517 Loans 51,832,308 42,473,796 Allowance for loan losses (758,328) (693,050) NET LOANS 51,073,980 41,780,746 Accrued interest receivable 277,211 223,345 Bank premises and equipment 2,928,724 2,912,086 Stock in Federal Home Loan Bank of Atlanta, at cost 113,800 122,200 Other assets 518,465 154,660 TOTAL ASSETS $73,870,113 $56,899,474 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits Non-interest-bearing $4,939,465 $3,701,270 Savings 1,055,679 431,682 Money market and NOW 15,705,470 12,087,158 Time 39,119,200 33,878,076 TOTAL DEPOSITS 60,819,814 50,098,186 Repurchase agreements 1,440,369 995,134 Accrued expenses and other Liabilities 217,325 182,613 TOTAL LIABILITIES 62,477,508 51,275,933 Stockholders' equity Common stock, $5 par value, 20,000,000 shares authorized; 1,152,720 and 602,763 shares issued and outstanding, respectively 5,763,600 3,013,815 Additional paid-in capital 5,916,915 3,153,827 Accumulated deficit (242,250) (564,136) Accumulated other comprehensive income (45,660) 20,035 TOTAL STOCKHOLDERS' EQUITY 11,392,605 5,623,541 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $73,870,113 $56,899,474 PARKWAY BANK AND SUBSIDIARY CONSOLIDATED STATEMENT OF OPERATIONS Years Ended December 31, 2004 and 2003 2004 2003 INTEREST INCOME Loans $2,903,912 $2,241,588 Investments 277,095 156,655 Federal Funds sold and deposits in other banks 90,934 50,937 TOTAL INTEREST INCOME 3,271,941 2,449,180 INTEREST EXPENSE Money Market, NOW and savings deposits 150,035 144,438 Time deposits 1,112,678 867,896 Securities sold under repurchase agreements 11,368 11,978 TOTAL INTEREST EXPENSE 1,274,081 1,024,312 NET INTEREST INCOME 1,997,860 1,424,868 PROVISION FOR LOAN LOSSES 84,250 195,600 NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 1,913,610 1,229,268 NON-INTEREST INCOME Insurance Commissions 422,665 412,002 Mortgage operations 164,926 292,214 Other fees and charges 321,072 119,241 TOTAL NON-INTEREST INCOME 908,663 823,457 NON-INTEREST EXPENSE Salaries and employee benefits 1,390,148 1,174,546 Occupancy and equipment 307,907 208,763 Advertising and promotion 78,767 59,861 Data processing and outside service fees 395,013 190,509 Professional fees 46,615 37,322 Supplies, telephone and postage 131,235 82,394 Other 150,702 171,250 TOTAL NON-INTEREST EXPENSE 2,500,387 1,924,645 INCOME BEFORE INCOME TAXES 321,886 128,080 INCOME TAXES - - NET INCOME $ 321,886 $ 128,080 NET INCOME PER COMMON SHARE BASIC $0.37 0.19 DILUTED $0.36 0.19 WEIGHTED AVERAGE COMMON SHARES BASIC 869,064 663,012 DILUTED 885,312 690,304 DATASOURCE: Parkway Bank CONTACT: Gary T. Clawson, President and CEO of Parkway Bank, +1-828-758-1414 Web site: http://www.parkwaybanknc.com/

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