Hank's Small Banks

[10 bagger]

UBOH.. $9.52 Great numbers..

United Bancshares, Inc. and Subsidiary
Overview of the Income Statement

For the quarter ended March 31, 2009, the Corporation reported net income of $1,432,000, or $0.42 basic earnings per share. This compares to first quarter 2008 net income of $945,000, or $0.27 basic earnings per share. Compared with the same period in 2008, first quarter 2009 net income increased $487,000 or 51.5%. The $487,000 increase for the quarter was primarily the result of a $426,000 increase in non-interest income, a decrease of $807,000 in interest expense, and a decrease of $58,000 in non-interest expenses offset by a decrease of $266,000 in interest income, an increase of $325,000 in the provision for loan losses and an increase in the provision for income taxes of $213,000.

Interest Income and Expense

Net interest income is the amount by which interest income from interest-earning assets exceeds interest incurred on interest-bearing liabilities. Interest-earning assets consist principally of loans and investment securities while interest-bearing liabilities include interest-bearing deposit accounts and borrowed funds. Net interest income remains the primary source of revenue for the Corporation. Changes in market interest rates, as well as changes in the mix and volume of interest-bearing assets and interest-bearing liabilities impact net interest income. Net interest income was $5,040,000 for the first quarter of 2009, compared to $4,499,000 for the same period of 2008, an increase of $541,000 (12.0%). This increase was mostly due to a $55 million increase in average interest-earning assets for the first quarter of 2009 as compared to the same period in 2008, as well as a slight increase in the net interest margin. The increase in average interest-earnings assets included a $46 million increase in loans.

Net interest margin is calculated by dividing net interest income (adjusted to reflect tax-exempt interest income on a taxable equivalent basis) by average interest-earning assets. The resulting percentage serves as a measurement for the Corporation in comparing its results with those of past periods as well as those of peer institutions. For the three months ended March 31, 2009, the net interest margin (on a taxable equivalent basis) was 3.66% compared with 3.62% for the same period of 2008. The increase in the net interest margin for the first quarter of 2009 as compared to the first quarter of 2008 primarily resulted from the decrease in the cost of interest bearing deposits (2.58% in 2009 compared to 3.57% in 2008) having a greater impact on the net interest margin than the decrease in the yield of interest-earning assets (5.98% in 2009 compared to 6.80% in 2008).

Provision for Loan Losses

The provision for loan losses is determined based upon management’s calculation of the allowance for loan losses and is reflective of management’s assessment of the quality of the portfolio and overall management of the inherent credit risk of the loan portfolio. Changes in the provision for loan losses are dependent, among other things, on loan delinquencies, collateral position, portfolio risks and general economic conditions in the Corporation’s lending markets. A $600,000 provision for loan losses was made for the first quarter of 2009 compared to a $275,000 provision for the same period in 2008. The increase in the provision for loan losses for the first quarter of 2009 as compared to the first quarter of 2008 is attributable to an increase in problem and potential problem loans as well as Union's charge-off experience. During the quarter ended March 31, 2009, Union recorded a $183,000 provision for loan losses relating to impaired loans and a $103,000 provision for potential problem loans. See “Allowance for Loan Losses” under Financial Condition for further discussion of the provision for loan losses.

Non-Interest Income

The Corporation’s non-interest income is largely generated from activities related to the origination, servicing and gain on sales of fixed rate mortgage loans, customer deposit account fees, earnings on life insurance policies, income arising from sales of investment products to customers, and occasional security sale transactions. Income related to customer deposit accounts and Bank Owned Life Insurance provides a relatively steady flow of income while the other sources are more volume or transaction related and consequently can vary from quarter to quarter.

Gain on sales of loans amounted to $417,000 for the quarter ended March 31, 2009, compared to $93,000 for the first quarter of 2008, an increase of $324,000. The quarterly gains included capitalized servicing rights of $181,000 and $21,000 on $20.8 million and $2.5 million of originated loan sales during the quarters ended March 31, 2009 and 2008, respectively. The balance of the gain on sales of loans represented cash gains. The significant increase in loan sales activity for the first quarter of 2009 as compared to 2008 is attributable to the significant decline in mortgage interest rates during the fourth quarter of 2008 and first quarter of 2009. Despite the significant loan sales activity experienced during the first quarter of 2009, Union's serviced portfolio remained essentially unchanged increasing only $1.5 million to $189.0 million at March 31, 2009.

The fair value of mortgage servicing rights decreased $56,000 for the quarter ended March 31, 2009 compared to $251,000 for the quarter ended March 31, 2008. Amortization of mortgage servicing rights, which is reported as a reduction of servicing income (other non-interest income in the accompanying condensed consolidated statements of income), amounted to $73,000 for the quarter ended March 31, 2009 compared to $80,000 for the quarter ended March 31, 2008.

Other non-interest income decreased $77,000 (11.1%) to $617,000 for the quarter ended March 31, 2009 compared to the same period in 2008. The decrease was the result of an $80,000 decrease in NSF and Overdraft charges.

Non-Interest Expenses

For the quarter ended March 31, 2009, non-interest expenses were $3,575,000, compared to $3,633,000 for the first quarter of 2008, a $58,000 (1.6%) decrease.

Non-interest expenses for the quarter ended March 31, 2009 included a $65,000 increase in the Corporation's FDIC assessment and a $79,000 decrease in the write downs on other real estate owned ($25,000 in 2009 compared to $104,000 in 2008), compared to the same quarter in 2008. In addition to the Corporation’s ongoing commitment to the improvement of internal controls and the overall operational environment, the Corporation has and will continue to identify and implement cost saving strategies.

Maintaining acceptable levels of non-interest expenses and operating efficiency are key performance indicators for the Corporation in its strategic initiatives. The financial services industry uses the efficiency ratio (total non-interest expense as a percentage of the aggregate of fully-tax equivalent net interest income and non-interest income) as a key indicator of performance. For the quarter ended March 31, 2009, the Corporation’s efficiency ratio improved to 56.96% compared to 68.67% for the same period of 2008.

Current economic conditions have increased bank failures and expectations for further failures, in which case the FDIC insures payment of deposits up to insured limits from the Deposit Insurance Fund. In late 2008, the FDIC announced an increase in insurance premium rates of seven basis points for the first quarter of 2009. On February 27, 2009, the FDIC announced its adoption of an interim final rule imposing a one-time special assessment of up to 20 basis points and a final rule adjusting the risk-based calculation used to determine the premiums due from each financial institution. On March 5, 2009, the FDIC announced its plan to reduce the special assessment to 10 basis points. Although at the time of this filing it was unclear to management the precise amount of the special assessment, management expects that the special assessment and the changes in the premium calculation will significantly increase the Corporation’s FDIC insurance expense for the remainder of 2009 and possibly thereafter.

Provision for Income Taxes

The provision for income taxes for the quarter ended March 31, 2009 was $416,000, or 22.5% of income before income taxes, compared to $203,000, or 17.7%, for the comparable 2008 period. The increase in the effective tax rate is attributable to tax-exempt interest income comprising a smaller portion of income before income taxes in 2009 than 2008.

Return on Assets

Return on average assets was 0.93% for the first quarter of 2009, compared to 0.68% for the comparable quarter of 2008. The increase resulted from a 51.5% increase in net income with only a slight increase in the Corporation’s average assets.

Return on Equity

Return on average equity for the first quarter of 2009 was 11.06% compared to 7.66% for the same period of 2008. This increase was the result of the increase in net income. The Corporation and Union met all regulatory capital requirements as of March 31, 2009, and Union is considered “well capitalized” under regulatory and industry standards of risk-based capital.
Condensed Consolidated Statements of Income (Unaudited)

[10 bagger]

UBOH.. $9.275

United Bancshares Requests Withdrawal From Treasury's CPP

Apr 27, 2009 15:29:39 (ET)


DOW JONES NEWSWIRES

United Bancshares Inc. (UBOH) said Monday it is seeking to withdraw its application to participate in the U.S. Treasury's Troubled Asset Relief Program Capital Purchase Program.

President and Chief Executive Daniel W. Schutt said in a letter to the agency that United Bancshares didn't receive the requisite two-thirds shareholder approval at its annual shareholders meeting to issue a new class of preferred stock.

"Without this amendment, the company is not authorized to issue the preferred stock necessary to consummate a transaction with Treasury under the CPP," Schutt said.

The Columbus Grove, Ohio, holding company for the Union Bank Co. provided a copy of the letter in a Securities and Exchange Commission filing.

-Gee L. Lee, Dow Jones Newswires; 202-862-1346

[10 bagger]

Bought some FFSL,, UBOH and SMBC.. hank

[10 bagger]

FBIZ..

On watch 02/27/09 $12.38...

First Business Financial Services Announces Increase in Earnings of 28.5 Percent

Monday October 27, 5:55 pm ET


MADISON, Wis., Oct. 27, 2008 (GLOBE NEWSWIRE) -- First Business Financial Services, Inc. (NasdaqGM:FBIZ - News) reported net income of $3.010 million for the first nine months of 2008, an increase of $668 thousand, or 28.5%, from the first nine months of 2007. Diluted earnings per share for the nine months ended September 30, 2008 were $1.24 compared to $0.95 reported for the same period in 2007, an increase of 30.5%. Net income for the three months ended September 30, 2008 was $1.172 million, an increase of $287 thousand, or 32.4%, compared to $885 thousand for the three months ended September 30, 2007. Diluted earnings per share for the three months ended September 30, 2008 were $0.48 compared to $0.36 for the same period in 2007, an increase of 33.3%.
The Corporation's total assets reached $998.4 million at September 30, 2008, an increase of $99.3 million, or 12.6%, from September 30, 2007. Net loans and leases, which totaled $828.4 million as of September 30, 2008, grew $79.8 million, or 10.7%, year-over-year.

A complete copy of the Corporation's Quarterly Report on Form 10-Q for the period ending September 30, 2008 and all reports filed by the Corporation with the SEC may be accessed through the Corporation's website, http://www.firstbusiness.com.

ADVERTISEMENT


Chief Executive Officer, Corey Chambas, commented, ``First Business, once again, had excellent growth in net income this quarter, particularly in light of the difficulties in the overall economy and especially in the banking sector. Our strong performance is due to our solid asset quality, no deterioration in the quality of the investment portfolio we own, and our ability to grow in a tough economic climate.'

About First Business Financial Services, Inc.

First Business Financial Services (NasdaqGM:FBIZ - News) is a Wisconsin-based bank holding company that specializes in focused financial solutions for businesses, key executives, and high net worth individuals through its operating companies. Its companies include: First Business Bank - Madison; First Business Bank - Milwaukee; First Business Bank - Northeast; First Business Trust & Investments; First Business Equipment Finance, LLC; and First Business Capital Corp. For additional information, visit http://www.firstbusiness.com or call 608-238-8008.

The First Business Financial Services, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=2667

Forward-Looking Statements

This press release contains forward-looking statements that reflect the Corporation's plans, estimates and beliefs. When used in this press release, the words ``anticipate,' ``believe,' ``estimate,' ``expect,' ``objective' and similar expressions and verbs in the future tense are intended to identify forward-looking statements. The statements contained in this press release involve or may involve certain assumptions, risks, and uncertainties, many of which are beyond the Corporation's control, which could cause actual results to differ materially from those discussed in the forward-looking statements. The forward-looking statements included in this press release are only made as of the date hereof, and the Corporation undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. In addition to the assumptions and other factors referenced specifically in connection with such statements, the factors described in ``Item 1A. Risk Factors' in our Annual Report on Form 10-K and the following factors could impact the business and financial prospects of the Corporation: general economic conditions; legislative and regulatory initiatives; increased competition and other effects of deregulation and consolidation of the financial services industry; monetary and fiscal policies of the federal government; deposit flows; disintermediation; the cost and availability of funds; general market rates of interest; interest rates or investment returns on competing investments; demand for loan products; demand for financial services; changes in accounting policies or guidelines; general economic developments; acts of terrorism and developments in the war on terrorism; and changes in the quality or composition of loan and investment portfolios.



Contact:
First Business Financial Services, Inc.
Jim Ropella, Senior Vice President and CFO
608-232-5970
[e-mail]
==================================================
First Business Financial Services, Inc.

401 Charmany Drive
Madison, WI 53719

Phone: [phone]
Fax: [phone]
Web Site: http://www.fbfinancial.com

DETAILS
Index Membership: N/A
Sector: Financial
Industry: Regional - Midwest Banks
Full Time Employees: 122


BUSINESS SUMMARY
First Business Financial Services, Inc. operates as the bank holding company for First Business Bank and First Business Bank, Milwaukee, which provide various commercial banking products and services to small and medium size businesses in Wisconsin. Its deposit products include demand deposits, time deposits, savings accounts, money market accounts, and certificates of deposit. The company offers loan products, including commercial mortgage loans, construction loans, multi family loans, one-to-four family loans, commercial loans, asset-based loans, consumer loans, personal loans, and term loans. It also provides personal lines of credit, cash management services, commercial lending, commercial real estate lending, and equipment leasing, as well as offers trust and investment services to local businesses, business owners, executives, professionals, and high net worth individuals. The company was founded in 1909 and is based in Madison, Wisconsin.


--------------------------------------------------------------------------------
Source: First Business Financial Services, Inc.

[10 bagger]

Citizens National Bank..

CIWV.OB Citizens Financial Corp. $6.60 02/27/09

213 Third Street
Elkins, WV 26241

Phone: [phone]
Fax: [phone]
Web Site: http://www.cnbelkins.com

Industry: Regional - Mid-Atlantic Banks
Full Time Employees: 88

============================================
SMALL Bank With increasing earnings...
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
Basic and fully diluted earnings per common share
$ 0.28 $ 0.23 $ 0.73 $ 0.63
Weighted average shares outstanding
1,829,504 1,829,504 1,829,504 1,829,504
Dividends per common share
$ 0.12 $ 0.12 $ 0.36 $ 0.36
============================================
BUSINESS SUMMARY:

Citizens Financial Corp. operates as the holding company for Citizens National Bank of Elkins, which provides retail and commercial banking services in central and eastern West Virginia. It primarily engages in generating deposits and originating loans.

The company’s deposit products include demand deposits, savings, money market, and time deposits. Its lending portfolio comprises commercial, financial, and agricultural loans; real estate construction and mortgage loans; and installment loans. The company also provides letters of credit; safe deposit and wire transfer services; automated teller machine, telebanking, and Internet banking services; and brokerage and financial planning services, as well as fixed rate residential mortgages. As of December 31, 2007, it operated six branch offices. The company was founded in 1923 and is headquartered in Elkins, West Virginia.

http://www.cnbelkins.com/
http://www.cnbelkins.com/investrelate.cfm

Economic Characteristics of Citizens’ Marketplace...

Citizens serves an area of West Virginia including the counties of Randolph, Tucker, Grant and Pocahontas. This market is a largely rural, mountainous region covering approximately 2,876 square miles with a civilian labor force of 25,520.

The economy of this area typically does not experience highs or lows to the same degree as the national economy and is generally less prosperous than the nation as a whole. Major industries in the area include lumber and wood products, tourism, and poultry operations.

Other major sources of employment include public schools, hospitals and other health care providers and various forms of local and state governmental services. As of December,2007, the unemployment rate in this market was 5.9% compared to 4.4% for West Virginia and 4.8% nationwide. Average annual wages in the area approximate $28,869 which is below both state and national levels.

Ongoing roadway improvements are helping to improve access to and transportation within the area and are expected to provide long-term economic benefits. However, the local economy is not expected to undergo significant changes in the short-term...

SEC Filings:
http://finance.yahoo.com/q/sec?s=ciwv.ob

For the quarterly period ended September 30, 2008 Commission file number 2-96144
http://www.cnbelkins.com/10Q-0908.pdf

For the quarterly period ended June 30, 2008 Commission file number 2-96144
http://www.cnbelkins.com/10Q-0608.pdf

For the quarterly period ended March 31, 2008 Commission file number 2-96144
http://www.cnbelkins.com/10Q-0308.pdf

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31,2007
http://www.cnbelkins.com/10K-2007.pdf

[mlkrborn]

U.S. Lawmakers Clash Over Nationalizing Banks to Stem Declines
Email | Print | A A A

By Alison Vekshin

Feb. 21 (Bloomberg) -- U.S. Senate and House Democrats who steer financial-industry legislation clashed over having the government take over some banks as a way to help lenders that have been hammered by the worst economic slump in 75 years.

Senate Banking Committee Chairman Christopher Dodd said yesterday some banks may have to be taken over for “a short time,” and his House counterpart, Financial Services Committee Chairman Barney Frank, along with Republican Senator Jon Kyl rejected having the government step in to run banks.

“I don’t welcome that at all, but I could see how it’s possible it may happen,” Dodd, a Connecticut Democrat, said on Bloomberg Television’s “Political Capital with Al Hunt,” broadcast this weekend. “I’m concerned that we may end up having to do that, at least for a short time.”

Citigroup Inc. and Bank of America Corp., which received $90 billion in U.S. aid in four months, tumbled as much as 36 percent yesterday on concern the U.S. may take over the banks. The Obama administration in response said a “privately held” banking system is the “correct way to go.”

Dodd, a Connecticut Democrat, also said Treasury Secretary Timothy Geithner has “an awful lot of leeway” in interpreting how the executive compensation restrictions he wrote into the economic stimulus legislation will be applied for banks that take federal aid.

Dodd’s statement gives Geithner the flexibility to say the rules don’t apply to firms that participate in the public-private partnership Treasury announced Feb. 10 to buy banks’ toxic assets, but only to companies that get cash injections under the Troubled Asset Relief Program.

Treasury Questions

“That’s one the Treasury has to respond to,” Dodd said. “That’s the kind of question that really ought to be reserved for them.”

Dodd softened his Feb. 5 opposition to nationalizing U.S. banks, when he told reporters he didn’t think it was time for the government to take over Bank of America, which had fallen to the lowest level in New York trading since 1984.

A possible government takeover has gained support. Former Federal Reserve Chairman Alan Greenspan told the Financial Times this week that the U.S. may have to temporarily nationalize some banks until the industry is restructured. Republican Senator Lindsey Graham, a member of the Budget Committee, said on ABC’s “This Week” Feb. 15 he wouldn’t reject the idea of nationalizing the banks.

The Obama administration turned aside questions about a U.S. takeover of banks, saying a “privately held banking system is the correct way to go, ensuring that they are regulated sufficiently by this government,” White House spokesman Robert Gibbs said yesterday at a briefing. “That’s been our belief for quite some time and we continue to have that.”

Frank, Kyl

Frank, a Massachusetts Democrat who heads the House panel that crafts banking legislation and often collaborates with Dodd, said he didn’t see the likelihood U.S. banks would be nationalized, and Geithner’s bank bailout plan should be given time to take effect.

“If that works, then we don’t have to go beyond it,” Frank said in a telephone interview yesterday.

Senator Jon Kyl, the second-ranking Republican and a member of the Finance Committee, agreed with Frank, saying nationalizing U.S. banks is “out of the question” and isn’t going to happen.

“I don’t think it’s something the market has to worry about,” Kyl, an Arizona Republican, said yesterday in a telephone interview, after Dodd spoke. “There are plenty of tools that we have short of that to deal with the crisis.”

Bank Shares Tumble

Citigroup tumbled 22 percent yesterday, to $1.95, the lowest in 18 years. Bank of America, the biggest bank by assets with $883 billion in deposits, recouped most of a 36 percent loss after Chief Executive Officer Kenneth Lewis said the bank can survive “on our own.” The KBW Bank Index of 26 companies fell for a sixth day, extending its decline this year to 51 percent.

Dodd said the executive-pay restrictions on banks that get TARP funds are necessary to draw taxpayer support for more government action.

“As long as they think their money is being squandered on bonuses or super salaries at a point like this, the job of getting people to support what we need to do is going to be that much more difficult,” Dodd said.

Dodd wrote a provision into the $787 billion stimulus bill that restricts bonuses for senior executives and the next top 20 employees at companies getting more than $500 million from the government rescue package. Limits on bonuses apply to other companies on a sliding scale based on how much aid they received.

Dodd said additional aid to the automobile industry should come from TARP, as there is “zero” tolerance in Congress to offer more funding for the government aid program.

General Motors Corp., the biggest U.S. carmaker, or Chrysler LLC could end up being forced into a merger, or a prepackaged bankruptcy filing, Dodd said. “I’m fearful it might turn into just a liquidation,” he said.

To contact the reporter on this story: Alison Vekshin in Washington at [e-mail].
Last Updated: February 21, 2009 00:01 EST

[10 bagger]

FFSL..First Independence Corporation

Anne M. Bertie, Vice President & CFO [phone]

FOR IMMEDIATE RELEASE

FIRST INDEPENDENCE ANNOUNCES FIRST QUARTER EARNINGS
INDEPENDENCE, KS (January 21, 2009) -- First Independence Corporation (OTC
Bulletin Board: FFSL.OB) (the “Company”), reported net earnings of $435,000 for the
first quarter of fiscal 2009, compared to $412,000 for the first quarter of fiscal 2008.
Diluted earnings per share of common stock for the first quarter of fiscal 2009 were
$.52, compared to diluted earnings per share of $.47 for the first quarter of fiscal 2008.
Return on average assets for the first quarter of fiscal 2009 was .86% (annualized),
compared to .85% (annualized), for the same period last year. Return on average
equity for the first quarter of fiscal 2009 was 9.83% (annualized), compared to 9.66%
(annualized), in the first quarter of fiscal 2008.
We had $203.3 million in assets and $17.8 million in stockholders’ equity as of
December 31, 2008. At December 31, 2008, total shares outstanding were 834,163.
The Company is the parent corporation for First Federal Savings and Loan
Association of Independence, Kansas ("First Federal"). At December 31, 2008, First
Federal exceeded all of its regulatory capital requirements. First Federal has four fullservice
branch offices primarily serving Montgomery, Wilson, Crawford and Chautauqua
Counties in Kansas along with a loan production office in Lawrence, Kansas.
This release contains forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results to differ materially from
those anticipated. These risks and uncertainties include, among others, changes in
economic conditions in our market area, changes in policies by regulatory agencies,
fluctuations in interest rates, demand for loans in our market area and competition that
could cause actual results to differ materially from historical earnings and those
presently anticipated or projected. For additional discussion of factors that may affect
the Company’s performance, refer to those described from time to time in our press
releases and other communications.

[10 bagger]

FSRL..

This bank blew up with massive losses in the last qtr..hank

[10 bagger]

FSRL....
FLORENCE, S.C., Oct. 11 /PRNewswire-FirstCall/ -- First Reliance Bancshares, Inc., (OTC:FSRL) (BULLETIN BOARD: FSRL) , the holding company for First Reliance Bank, today announced 3rd quarter 2008 unaudited net income of $765,178, an increase of 31%.

Unaudited net income for the three months ended September 30, 2008 was $765,178, compared to $584,877 reported in the prior-year period. Earnings benefited from growth in net interest income and reduction in non interest expense. Net interest income increased to $4.9 million in the third quarter of 2008 over $4.7 million reported the prior year period. Non interest expense decreased 3%, to $4.5 million in the third quarter of 2008. Diluted earnings per share were $0.21, compared to the $0.17 reported in the prior year period.

Unaudited net income for the nine months ended September 30, 2008 was $2.3 million, an increase of 3%, or $0.63 per diluted share, compared to $2.2 million, or $0.62 per diluted share, for the nine months ended September 30, 2007. Net interest income increased to $14.7 million in the nine months ended September 30, 2008, over $13.8 million reported the prior year period, while non-interest income was $3.9 million for both periods.

As of September 30, 2008, total assets were $573.7 million, an increase of $48.9 million or 9%, over the $524.8 million reported for September 30, 2007. Loans increased 6% to $459.7 million, while deposits increased to $447.6 million, up 2% from $440.8 million reported for the prior year period.

"In this difficult economic environment, we are not without our challenges; our nonperforming assets to total asset ratio has increased from 0.90 to 1.70 as September 30, 2008," commented Jeff Paolucci, Senior Vice President and CFO of First Reliance Bank. "However, we have taken an aggressive approach to increasing our loan reserves from 1.09% of loans receivable to 1.35%. Even though we have made aggressive provisions for loan losses throughout the year, we continue to exceed our earnings estimate."

"It is clear from the positive results of the 3rd quarter that our focus on profitable growth backed by conservative business decisions has been a rewarding business strategy for our bank," commented Rick Saunders, president and CEO of First Reliance Bank. "In a challenging economic environment where many companies have reported negative growth in earnings, we are pleased to report positive growth in earnings. Our conservative investment practices have never included risks related to Fannie Mae or Freddie Mac or any other high risk mortgage backed securities. In addition, we do not make sub-prime mortgage loans and have no exposure in this area. While other banks have suffered the negative effects of these products and practices, First Reliance's conservative and sound business and banking practices, have allowed us to produce great earnings and position ourselves for future expansion and growth throughout the industry turmoil."

"First Reliance is a financially sound and well capitalized company with a solid deposit base, and 98% of our customers are satisfied with our excellent service and convenience. We are a safe, strong, and profitable South Carolina community bank specializing in relationship banking with individuals and businesses and we have a long and bright future to look forward to."

Jeff Paolucci, Senior Vice President and CFO of First Reliance Bank, commented, "First Reliance is financially strong and well capitalized. First Reliance remains in every measurable category a "well capitalized" institution under all regulatory standards. In fact, our capital ratios are well in excess of all regulatory "well capitalized" thresholds, which we feel is a significant accomplishment considering the state of the economy and the problems facing other institutions. Our strong capital, liquidity, and focus on closely monitoring and controlling expenses has increased our lending capabilities and provided us the opportunity to expand our franchise. During the first quarter of 2009, we will further enhance our commitment to be Easy To Do Business With(TM) by opening a new branch in West Columbia, SC. Additional 2009 expansion efforts include a branch on Forest Drive in Columbia, SC."

"First Reliance is a strong and viable company committed to addressing issues quickly and efficiently as we stay focused on building a strong company for the future. As we continue to move forward in this difficult economic environment, we will continue to carefully and cautiously monitor our banking and business practices to prevent any potential and unforeseen challenges. Our proactive and aggressive risk management systems and emphasis on credit quality have resulted in our strong asset quality, which continues to improve. In addition, our footprint expands into different geographic markets throughout the state of South Carolina thereby reducing the credit risk associated with operating in one location."

"We have realized several positive accomplishments this quarter," stated Rick Saunders, president and CEO. "We are pleased to announce that for the past 3 consecutive years, we have been named One of the Best Places to Work in SC(TM). Providing a great place to work, allows us to recruit and develop great, talented people who are aligned with our company's vision, mission, and values. It is clear that the quality of our work environment has a direct impact on our customers' experience, due to our recent customer satisfaction score of 98%. We intend to continue to increase our level of customer satisfaction by making every effort to meet and exceed our customers' expectations. It is our goal to provide the utmost convenience in products and services and excellent customer service."

"Throughout 2008, we will continue to focus on growing core deposits and leveraging our customer loyalty ratings, while improving our operating efficiencies and managing operating expenses. As we continue to diligently maintain disciplined risk and credit management practices, I am confident that we will continue to attain consistent and sustainable growth."

ABOUT FIRST RELIANCE BANK

First Reliance Bank, founded in 1999, has assets of approximately $574 million, and employs over 145 highly talented associates. The bank serves Columbia, Charleston, Greenville and Florence markets in South Carolina. The bank has been recognized for its success including being the only company ever to be named to The Top 25 Fastest Growing Companies(TM) in South Carolina four times including 2002, 2004, 2005, and 2006 (SC Chamber/Elliott Davis). In June 2007, the bank was added to the Palmetto 25, a list of S.C.'s largest publicly held companies. In 2006, 2007, and 2008 the bank was also recognized as One of the Best Places to Work in South Carolina by the SC Chamber of Commerce. First Reliance Bank offers a unique Hometown Heroes package of benefits to serve those who are serving our communities, Totally FREE Checking, Totally FREE Business, FREE Coin Machines, a Nationwide NO FEE ATM Network, and a 5 Way Mortgage Service Promise. It also offers 8-8 Extended Hours in all of their Florence, Mt. Pleasant, and Lexington locations and is open on most traditional bank holidays. Its Easy to Do Business With(TM) standard has earned the young bank a customer satisfaction rating of 98% (Lamothe & Associates, Inc., Research Firm). First Reliance Bank is traded as FSRL.OB.

This press release contains forward-looking statements about branch openings within the meaning of the Securities Litigation Reform Act of 1995. Forward-looking statements give our expectations or forecasts of future events.

Any or all of our forward-looking statements here or in other publications may turn out to be incorrect. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining our actual future results. Consequently, no forward- looking statements can be guaranteed. Our actual results may vary materially, and there are no guarantees about the performance of our stock.

We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future results or otherwise. You are advised, however, to consult any future disclosures we make on related subjects in our reports to the SEC.

Contact Jeffrey A. Paolucci, Senior Vice President and Chief Financial Officer, [phone]

Media Contact: Jeff Paolucci, Senior Vice President Ashleigh Miles, PR & and CFO Advertising Manager First Reliance Bank First Reliance Bank [phone] [phone]


First Reliance Bancshares, Inc.

[10 bagger]

On Watch.. FSRL.. 4.70.. 4.10 X 800 5.50 X 700

[10 bagger]

On Watch CFBK...3.00 2.75 x600 3.45 x100

[10 bagger]

ON Watch...SCMF 3.96... 4.05 x600 4.29 x100

Southern Community Financial Corporation Announces Results for the Fourth Quarter 2008 and Year Ended December 31, 2008
Date : 01/22/2009 @ 4:30PM
Source : MarketWire
Stock : Southern Community Financial Corporation (SCMF)
Quote : 3.96 0.0 (0.00%) @ 7:38AM


Southern Community Financial Corporation Announces Results for the Fourth Quarter 2008 and Year Ended December 31, 2008

WINSTON-SALEM, NC -- (Marketwire) -- 01/22/09 -- Southern Community Financial Corporation (NASDAQ: SCMF) (NASDAQ: SCMFO)

Financial Highlights

-- Net interest margin for the fourth quarter 2008 increased 22 basis
points to 3.10% from 2.88% in the third quarter 2008
-- Nonperforming loans were 1.10% of total loans at December 31, 2008
compared with 0.91% of total loans at September 30, 2008
-- Nonperforming assets were 1.12% of total assets at December 31, 2008
compared with 0.84% at September 30, 2008
-- Annualized fourth quarter 2008 net charge-offs increased to 0.43% of
average loans compared with 0.28% for the third quarter 2008
-- Fourth quarter provision for loan losses of $2.36 million, an increase
of $1.01 million compared to $1.35 million in the third quarter 2008
-- Allowance for loan losses was 1.43% of total loans at December 31,
2008 compared to 1.35% at September 30, 2008 and 1.20% at year-end 2007
-- Loan and deposit growth for 2008 was excellent at 10.6% and 18.0%,
respectively
-- Received $42.75 million in new capital under the Treasury's Capital
Purchase Program
-- Fourth quarter 2008 net income of $1.56 million, or $0.08 diluted
earnings per common share, in line with third quarter 2008 earnings of
$1.63 million, or $0.09 diluted earnings per common share, despite an
increase in provision for loan losses of $1.0 million
-- 2008 earnings of $5.85 million, or $0.33 diluted earnings per common
share, decreased 22% from $7.55 million, or $0.43 diluted earnings per
common share, for 2007; however 2008 earnings included an increase in the
provision for loan losses of $5.39 million over 2007 provision
-- Declared cash dividend of $0.04 per share for fourth quarter


Southern Community Financial Corporation (NASDAQ: SCMF) (NASDAQ: SCMFO), the holding company for Southern Community Bank and Trust, reported net income of $1.56 million for the fourth quarter of 2008, compared with $1.63 million for the third quarter of 2008 and $1.89 million for the fourth quarter of 2007. Earnings per diluted common share were $0.08 in the fourth quarter 2008, $0.09 in the third quarter 2008 and $0.11 in the fourth quarter 2007. For the year ended December 31, 2008, net income of $5.85 million ($0.33 per diluted common share) decreased from the $7.55 million ($0.43 per diluted common share) for the prior year. The respective increases in the provision for loan losses of $1.01 million for the fourth quarter 2008 on a linked quarter basis and $5.39 million for the year ended December 31, 2008 were largely responsible for the decrease in earnings for those periods. Earnings in the earnings per common share calculation represents net income reduced for dividends that are payable on the $42.75 million in preferred stock issued to the United States Treasury on December 5, 2008.

Asset Quality

During the fourth quarter of 2008, nonperforming loans increased to $14.4 million (or 1.10% of total loans) from $12.0 million (or 0.91% of total loans) at September 30, 2008. Nonperforming assets increased to $20.2 million (or 1.12% of total assets) at December 31, 2008 from $15.1 million (or 0.84% of total assets) at September 30, 2008. Net charge-offs totaled $1.5 million during the fourth quarter, or 0.43% of average loans on an annualized basis, a 60% increase compared to $920 thousand (or 0.28% of average loans, annualized) in third quarter 2008. Nonperforming loans, nonperforming assets and net charge-offs activity continue to be predominantly related to residential construction and development lending as 82% of nonperforming loans, 87% of nonperforming assets and 81% of net charge-offs originated from this segment of the loan portfolio.

The provision for loan losses of $2.36 million for the fourth quarter increased $1.01 million compared to the third quarter 2008 provision and increased $1.61 million compared to the fourth quarter 2007 provision. The allowance for loan losses at December 31, 2008 of $18.9 million represented 1.43% of total loans and 1.31 times nonperforming loans compared with 1.35% of total loans and 1.49 times nonperforming loans at September 30, 2008.

"As this challenging economic environment became more severe during the fourth quarter and is expected to persist through 2009, we are continuing to work with our customers to resolve problem credits," said F. Scott Bauer, Chairman and Chief Executive Officer. "Through the efforts of our lending officers, credit administrators and executive management who monitor our delinquent and problem credits constantly, we successfully managed to hold the increase in nonperforming loans during the quarter to only $2.4 million. We prudently increased our allowance for loan losses to a level that better handles the increased risk in our loan portfolio due to the growth in charge-offs and nonperforming loans. As a result of this action, I believe we will be better positioned for the first quarter of 2009, at which time we expect nonperforming assets to increase from current levels. While this level of nonperforming assets is higher than our historical average, we believe it is manageable and continues to reflect the difficult housing market conditions that persist across our footprint.

While managing the challenges of this current credit environment is our top priority, we are also focused on margin improvement through pricing discipline and expense control as well as profitable and prudent growth.

We are pleased that our underlying earnings and core business remain strong which positions us well for the future.

We intend to leverage our new capital in a responsible manner and promote customer initiatives to foster improvement in the financial well-being of our customers and the economies within our local communities. Following the recent $42.75 million investment under the Treasury's Capital Purchase Program, we believe we have sufficient capital and liquidity to weather the current economic environment and our regulatory capital ratios remain at levels that continue to be considered 'well capitalized'," Bauer said.

Financial Performance

Net interest income of $12.82 million for the fourth quarter 2008 increased by 8% compared with $11.86 million in the third quarter 2008, and 14.1% over the $11.24 million in the fourth quarter 2007. Net interest margin of 3.10% for the fourth quarter 2008 increased 22 basis points from 2.88% compared with the linked quarter and declined 5 basis points from 3.15% for the fourth quarter 2007. Growth in net interest income in the fourth quarter 2008 was significantly influenced by the impact of the 175 basis point reduction in the Federal Reserve's target funds rate on market interest rates. The Company's deposit and borrowing costs repriced downward to a greater extent than its asset yields due to the institution of interest rate floors on a majority of its variable rate loans.

Non-interest income of $2.52 million during the fourth quarter increased by $441 thousand or 21.2% compared with the third quarter 2008 primarily due to the $440 thousand nonrecurring loss on certain terminated derivative contracts during third quarter 2008. Also affecting fourth quarter non-interest income was a $138 thousand decrease in wealth management income on a sequential basis attributable to lower transaction volumes and overall market conditions. This impact was offset by $98 thousand in gains on sales of investment securities and $50 thousand increase in income from SBIC activities. Non-interest income for the twelve months ended December 31, 2008 remained relatively flat compared to the same period in 2007 as increases in service charge income, gains on derivatives and wealth management income were offset by $2.04 million decrease in SBIC income.

Non-interest expenses of $10.7 million for the fourth quarter 2008 increased $449 thousand or 4% on a linked quarter basis and $166 thousand or 1.6% year-over-year. On a linked quarter basis, the increase in non-interest expenses included a $360 thousand increase in legal and professional services expense, a $291 thousand write-off of goodwill related to prior acquisition of a mortgage company and $99 thousand in writedowns of foreclosed properties. Increased problem loan workout activity was the primary reason for the increased legal and professional services for the fourth quarter. As an annualized percentage of average assets, the expense load represented 2.35% of average assets for the fourth quarter 2008 and 2.42% of average assets for the twelve months ended December 31, 2008.

As of December 31, 2008, total assets amounted to $1.80 billion, representing an increase of $234.8 million, or 15% year-over-year driven by strong loan and deposit growth. On a linked quarter basis, asset growth for the fourth quarter 2008 was relatively flat. The loan portfolio decreased by $8.6 million or 1.0% sequentially during the fourth quarter due primarily to the payoff of one large commercial construction loan.

Total deposits stood at $1.23 billion at December 31, 2008, an increase of $187.9 million or 18.0% year-over-year. During the fourth quarter 2008, deposits decreased $29.9 million or 2.4% from the September 30, 2008 level as depositors withdrew some liquidity from money market accounts for seasonal needs or in response to management's strategy to improve funding costs.

At December 31, 2008, stockholders' equity of $188.0 million represented 10.4% of total assets. Stockholders' equity increased $45.1 million or 32% from $142.8 million at September 30, 2008 primarily as a result of $42.75 million in preferred stock issued to the U.S. Treasury under its Capital Purchase Program. Regulatory capital ratios remain in excess of the "well capitalized" threshold.

Southern Community's executive management team will host a conference call on January 23, 2009, at 10:00 AM Eastern Time to discuss the quarter-end results. The call can be accessed by dialing 1-877-741-4239 or 1-719-325-4762 and entering pass code 4742889. A replay of the conference call can be accessed until 11:59 pm on February 6, 2009, by calling 1-888-203-1112 or 1-719-457-0820 and entering pass code 4742889. You may access additional presentation materials for this conference call in the Investor Relations section of Southern Community's web site at www.smallenoughtocare.com.

Southern Community Financial Corporation is headquartered in Winston-Salem, North Carolina and is the holding company of Southern Community Bank and Trust, a community bank with twenty-two banking offices throughout North Carolina.

Southern Community Financial Corporation's common stock and trust preferred securities are listed on the NASDAQ Global Select Market under the trading symbols SCMF and SCMFO, respectively. Additional information about Southern Community Financial Corporation is available on its website at www.smallenoughtocare.com or by email at [e-mail].

This news release contains forward-looking statements. Such statements are subject to certain factors that may cause the Company's results to vary from those expected. These factors include changing economic and financial market conditions, competition, ability to execute our business plan, items already mentioned in this press release, and other factors described in our filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's judgment only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events and circumstances that arise after the date hereof.

Southern Community Financial Corporation
(Dollars in thousands except per share data)
(Unaudited) For the three months ended For the Year Ended
Income Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Dec 31, Dec 31,
Statement 2008 2008 2008 2008 2007 2008 2007
---------------------------------------------- -----------------
Total
Interest
Income $ 24,278 $ 24,412 $ 23,727 $ 24,325 $ 25,370 $ 96,742 $ 98,908
Total
Interest
Expense 11,459 12,553 11,947 13,323 14,132 49,282 55,141
-------- -------- -------- -------- -------- -------- --------
Net
Interest
Income 12,819 11,859 11,780 11,002 11,238 47,460 43,767Provision
for Loan
Losses 2,360 1,350 3,530 925 750 8,165 2,775Net
Interest
Income
after
Provision
for Loan
Losses 10,459 10,509 8,250 10,077 10,488 39,295 40,992Non-Interest
Income
Service
Charges on
Deposit
Accounts 1,487 1,491 1,475 1,406 1,441 5,859 4,931
Income
from
mortgage
banking
activities 233 219 358 484 325 1,294 1,343
Investment
brokerage
and trust
fees 147 285 335 371 289 1,138 915
SBIC
income
(loss)
and
management
fees 89 39 82 (150) 394 60 2,103
Gain
(Loss)
and Net
Cash
Settlement
on Economic
Hedges - (440) 330 1,044 19 934 79
Other
Income 464 483 518 434 372 1,899 1,960
-------- -------- -------- -------- -------- -------- --------
Total
Non-
Interest
Income 2,518 2,077 3,098 3,589 2,840 11,282 11,331Non-Interest
Expense
Salaries
and
Employee
Benefits 5,088 5,535 5,621 5,794 5,467 22,038 21,218
Occupancy
and
Equipment 1,930 1,854 1,931 1,964 2,021 7,679 7,928
Other 3,635 2,815 3,120 2,802 2,999 12,372 11,754
-------- -------- -------- -------- -------- -------- --------
Total
Non-
Interest
Expense 10,653 10,204 10,672 10,560 10,487 42,089 40,900Income
Before
Taxes 2,324 2,382 676 3,106 2,841 8,488 11,423
Provision
for
Income
Taxes 766 754 73 1,041 948 2,634 3,869
-------- -------- -------- -------- -------- -------- --------Net Income $ 1,558 $ 1,628 $ 603 $ 2,065 $ 1,893 $ 5,854 $ 7,554
======== ======== ======== ======== ======== ======== ========Effective
dividend
on
preferred
stock 185 - - - - 185 -
-------- -------- -------- -------- -------- -------- --------Net income
available
to common
share-
holders $ 1,373 $ 1,628 $ 603 $ 2,065 $ 1,893 $ 5,669 $ 7,554
======== ======== ======== ======== ======== ======== ========
Net Income
per
Common
Share
Basic $ 0.08 $ 0.09 $ 0.03 $ 0.12 $ 0.11 $ 0.33 $ 0.43
Diluted $ 0.08 $ 0.09 $ 0.03 $ 0.12 $ 0.11 $ 0.33 $ 0.43
======== ======== ======== ======== ======== ======== ========
Balance
Sheet Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2008 2008 2008 2008 2007
----------- ----------- ----------- ----------- -----------Assets
Cash and
due from
Banks $ 25,215 $ 27,453 $ 37,576 $ 35,037 $ 31,905
Federal
Funds
Sold &
Int
Bearing
Balances 2,180 2,605 3,607 4,752 2,250
Investment
Securities 334,455 313,113 316,336 296,151 228,933Loans held
for sale 316 920 2,106 4,110 1,929Loans 1,314,811 1,323,360 1,285,014 1,235,952 1,188,438
Allowance
for Loan
Losses (18,851) (17,929) (17,499) (14,853) (14,258)
----------- ----------- ----------- ----------- -----------
Net
Loans 1,295,960 1,305,431 1,267,515 1,221,099 1,174,180Bank
Premises
and
Equipment 40,030 39,264 39,672 38,790 38,997
Goodwill 49,501 49,792 49,792 49,792 49,792
Other
Assets 56,368 59,283 55,101 40,721 41,196
----------- ----------- ----------- ----------- -----------Total
Assets $ 1,804,025 $ 1,797,861 $ 1,771,705 $ 1,690,452 $ 1,569,182
=========== =========== =========== =========== ===========Liabilities
and
Stock-
holders'
Equity
Deposits
Non-
Interest
Bearing $ 102,048 $ 104,988 $ 114,685 $ 109,534 $ 109,895
Money
market,
savings
and NOW 475,772 523,949 560,094 507,105 495,448
Time 655,292 634,037 542,622 526,096 439,894
----------- ----------- ----------- ----------- -----------
Total
Deposits 1,233,112 1,262,974 1,217,401 1,142,735 1,045,237Borrowings 373,213 378,500 401,667 393,306 372,405
Accrued
Expenses
and Other
Liabil-
ities 9,743 13,549 10,747 10,061 9,201
----------- ----------- ----------- ----------- -----------
Total
Liabil-
ities 1,616,068 1,655,023 1,629,815 1,546,102 1,426,843Total
Stock-
holders'
Equity 187,957 142,838 141,890 144,350 142,339
----------- ----------- ----------- ----------- -----------Total
Liabil-
ities and
Stock-
holders'
Equity $ 1,804,025 $ 1,797,861 $ 1,771,705 $ 1,690,452 $ 1,569,182
=========== =========== =========== =========== ===========Book Value
per
Common
Share $ 8.78 $ 8.22 $ 8.17 $ 8.33 $ 8.18
=========== =========== =========== =========== ===========





As of or for the three months ended
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31,
2008 2008 2008 2008 2007
---------- ---------- ---------- ---------- ----------Per Common
Share Data:
Basic Earnings
per Share $ 0.08 $ 0.09 $ 0.03 $ 0.12 $ 0.11
Diluted
Earnings per
Share $ 0.08 $ 0.09 $ 0.03 $ 0.12 $ 0.11
Book Value per
Share $ 8.78 $ 8.22 $ 8.17 $ 8.33 $ 8.18
Cash dividends
paid $ 0.040 $ 0.040 $ 0.040 $ 0.040 $ 0.040Selected
Performance
Ratios:
Return on
Average Assets
(annualized)
ROA 0.34% 0.36% 0.14% 0.51% 0.48%
Return on
Average Equity
(annualized)
ROE 4.01% 4.57% 1.68% 5.84% 5.35%
Return on
Tangible
Equity
(annualized) 5.98% 7.13% 2.60% 9.12% 8.42%
Net Interest
Margin 3.10% 2.88% 2.99% 2.98% 3.15%
Net Interest
Spread 2.88% 2.67% 2.76% 2.67% 2.77%
Non-interest
Income as a %
of Revenue 16.42% 14.90% 20.82% 24.60% 20.17%
Non-interest
Income as a %
of Average
Assets 0.56% 0.45% 0.71% 0.89% 0.72%
Non-interest
Expense to
Average Assets 2.35% 2.27% 2.47% 2.61% 2.67%
Efficiency
Ratio 69.46% 73.22% 71.73% 72.37% 74.49%Asset Quality:
Nonperforming
Loans $ 14,433 $ 12,007 $ 12,796 $ 7,012 $ 2,052
Nonperforming
Assets $ 20,178 $ 15,086 $ 14,210 $ 8,042 $ 2,827
Nonperforming
Loans to Total
Loans 1.10% 0.91% 1.00% 0.57% 0.17%
Nonperforming
Assets to
Total Assets 1.12% 0.84% 0.80% 0.48% 0.18%
Allowance for
Loan Losses to
Period-end
Loans 1.43% 1.35% 1.36% 1.20% 1.20%
Allowance for
Loan Losses to
Nonperforming
Loans (X) 1.31X 1.49X 1.37X 2.12X 6.95X
Net Charge-offs
to Average
Loans
(annualized) 0.43% 0.28% 0.28% 0.11% 0.23%Capital Ratios:
Equity to Total
Assets 10.42% 7.94% 8.01% 8.54% 9.07%
Tangible Equity
to Total
Tangible
Assets (1) 5.51% 5.26% 5.28% 5.69% 6.00%Average
Balances:
Year to Date
Interest
Earning
Assets $1,588,542 $1,569,306 $1,535,388 $1,485,037 $1,370,413
Total
Assets 1,738,868 1,717,357 1,680,842 1,625,164 1,513,619
Total Loans 1,279,041 1,264,744 1,238,843 1,219,800 1,114,677
Equity 145,754 142,800 143,282 142,190 138,693
Interest
Bearing
Liabilities 1,474,539 1,456,848 1,421,227 1,368,420 1,250,986 Quarterly
Interest
Earning
Assets $1,645,832 $1,636,404 $1,586,068 $1,485,037 $1,416,061
Total
Assets 1,802,934 1,789,593 1,736,520 1,625,164 1,559,047
Gross
Loans 1,321,621 1,315,983 1,257,886 1,219,800 1,176,945
Equity 154,552 141,846 144,374 142,190 140,470
Interest
Bearing
Liabilities 1,527,227 1,527,316 1,474,186 1,368,420 1,291,307Weighted
Average Number
of Shares
Outstanding
Basic 17,369,765 17,369,925 17,354,298 17,359,452 17,449,203
Diluted 17,398,432 17,416,675 17,401,298 17,401,589 17,466,703
Period end
outstanding
shares 16,769,675 17,370,175 17,370,175 17,319,351 17,399,882 As of or
For the Year Ended
Dec 31, Dec 31,
2008 2007
---------- ----------Per Common
Share Data:
Basic Earnings
per Share $ 0.33 $ 0.43
Diluted
Earnings per
Share $ 0.33 $ 0.43
Book Value per
Share $ 8.78 $ 8.18
Cash dividends
paid $ 0.160 $ 0.155Selected
Performance
Ratios:
Return on
Average Assets
(annualized)
ROA 0.34% 0.50%
Return on
Average Equity
(annualized)
ROE 4.02% 5.45%
Return on
Tangible
Equity
(annualized) 6.18% 8.64%
Net Interest
Margin 2.99% 3.19%
Net Interest
Spread 2.75% 2.81%
Non-interest
Income as a %
of Revenue 19.21% 20.57%
Non-interest
Income as a %
of Average
Assets 0.65% 0.75%
Non-interest
Expense to
Average Assets 2.42% 2.70%
Efficiency
Ratio 71.65% 74.23%Asset Quality:
Nonperforming
Loans $ 14,433 $ 2,052
Nonperforming
Assets $ 20,178 $ 2,827
Nonperforming
Loans to Total
Loans 1.10% 0.17%
Nonperforming
Assets to
Total Assets 1.12% 0.18%
Allowance for
Loan Losses to
Period-end
Loans 1.43% 1.20%
Allowance for
Loan Losses to
Nonperforming
Loans (X) 1.31X 6.95X
Net Charge-offs
to Average
Loans
(annualized) 0.28% 0.14%Capital Ratios:
Equity to Total
Assets 10.42% 9.07%
Tangible Equity
to Total
Tangible
Assets (1) 5.51% 6.00%Average
Balances:
Year to Date
Interest
Earning
Assets
Total Assets
Total Loans
Equity
Interest Bearing
Liabilities Quarterly
Interest
Earning
Assets
Total Assets
Gross Loans
Equity
Interest Bearing
LiabilitiesWeighted Average
Number of
Shares
Outstanding
Basic 17,363,395 17,559,352
Diluted 17,398,318 17,624,399
Period end
outstanding
shares 16,769,675 17,399,882
(1) - Tangible Equity to Total Tangible Assets is period-ending equity less
intangibles, divided by period-ending assets less intangibles.
Management provides the above non-GAAP measure, footnote (1) to provide
readers with the impact of purchase accounting on this key financial ratio.



For additional information:

F. Scott Bauer

Chairman/CEO

James Hastings

Executive Vice President/CFO

[phone]

[J-RO]

BHLB ~> Massachusetts Regional Bank "Berkshire Hills Bancorp" aka Berkshire Bank. Well run firm. Per my review of the financials, I don't see the silly exposure to credit risk like with the big banks, IMO. Truly a no brainer as a longer term setup, IMO. Worth looking into.

Link to most recent 10Q

http://idea.sec.gov/Archives/edgar/data/1108134/000091431708002652/form10q-94847_berk.htm

[J-RO]

Small Banks Move Into Mortgage Market as JPMorgan Fears to Lend
Email | Print | A A A

By Dan Levy and Ari Levy

Jan. 23 (Bloomberg) -- Matthew Stubbs said the mortgage choice was easy when he bought his Seattle dream home: Pay less than 6 percent to locally based HomeStreet Bank, or a percentage point higher and $3,400 extra in fees to Wells Fargo & Co.

“The differences were so pronounced that there was no question when it came to the final decision,” Stubbs, 31, who closed in November on a three-bedroom house in the Beacon Hill neighborhood, near Seattle’s new light rail line and Amazon.com Inc.’s headquarters, said in an interview.

Small banks with little or no exposure to the toxic debt that crippled Wall Street have money to lend as U.S. homebuyers struggle to find credit. While the largest lenders retrenched in the third quarter, loan volume for institutions with less than $1 billion in assets rose 6.8 percent, according to Pacific Coast Bankers’ Bank, a San Francisco-based trade group. Barry James, chief executive officer of James Investment Research Inc. in Xenia, Ohio, says that trend will continue.

“There’s some real strength in these smaller institutions that didn’t get in trouble,” said James, whose $650 million Golden Rainbow Fund owns community bank shares and has beaten 99 percent of its competitors over the past five years, according to Bloomberg data. “They are picking up business.”

HomeStreet Bank increased its residential mortgage business by 13 percent in the third quarter from a year earlier, according to a Federal Deposit Insurance Corp. filing. Meanwhile the largest national banks, including New York-based JPMorgan Chase & Co. and Citigroup Inc. and Charlotte, North Carolina- based Bank of America Corp., curtailed mortgage lending amid the industry’s $1 trillion in credit losses and writedowns.

A Local Advantage

“No longer do nationwide lenders or investors want to just pick up business 3,000 miles away, because they’re so concerned about risk,” Guy Cecala, publisher of Inside Mortgage Finance, a Bethesda, Maryland-based newsletter, said in an interview. “That’s the real advantage a community bank has. They effectively know everybody in the neighborhood, or all their customers.”

Stubbs, who works for the Seattle City Light public utility and has an above-average credit score of 760 in a scale developed by Fair Isaac Corp., said his first contact with Wells Fargo came in a phone call with an agent in Anchorage, Alaska. By contrast, he spoke to a HomeStreet loan officer who lives in Seattle and had also bought property in the area.

“It seemed that he understood the local housing market and knew the neighborhood, which is something that isn’t captured in the standard risk profiling,” said Stubbs, who bought the house for $340,000 with his girlfriend, a graduate student.

Mortgage Applications

In November, the month Stubbs completed his purchase, U.S. mortgage applications fell to an eight-year low as housing prices tumbled. Applications picked up in December, when lower mortgage rates encouraged homeowners to refinance. The top five lenders slashed mortgage originations by 50 percent over the course of a year, according to New York-based analyst Meredith Whitney at Oppenheimer & Co.

Countrywide Financial Corp. and Washington Mutual Inc. cut residential lending before they were purchased last year by Bank of America and JPMorgan, respectively. The same was true for Wachovia Corp., acquired by San Francisco-based Wells Fargo on Jan. 1. Even Wells Fargo, which has weathered the housing crisis better than its competitors, reported a $10 billion drop in third-quarter mortgage originations from the previous quarter.

JPMorgan originated $28.1 billion in mortgages during the fourth-quarter, a 30 percent decrease from the previous year’s period. Home equity originations dropped 83 percent from the previous year to $1.7 billion in originations.

Shares Surge

When Deborah Parsons refinanced her Topeka, Kansas, home last year, she opted against Countrywide, her mortgage company for more than a decade. Instead, Parsons turned to Capitol Federal Financial, a local bank she sees daily on her drive to work.

Parsons closed the $80,000 loan in December, and now can reach a local bank representative near her home, instead of relying on the toll free number that appeared on her Countrywide bill.

“Customer service was the biggest part and just knowing their reputation,” said Parsons, 45, who refinanced so she and her husband could buy new windows and upgrade their air and heating systems. “We see their commercials, see them on the street corners.”

Capitol Federal shares have surged 38 percent in the past year, the best performance in the 495-company Nasdaq Bank Index, while Wells Fargo, Citigroup, Bank of America and JPMorgan each have fallen by at least 40 percent.

‘Aggressive’ Banks

National banks that financed the U.S. housing boom “got very aggressive,” lowering interest rates for home loans, offering adjustable-rate products to subprime borrowers and selling bundled mortgages in the secondary market, said Steve Brown, chief executive officer of Pacific Coast Bankers’ Bank, which was formed in 1997 and counts more than 200 community banks as shareholders across the U.S.

“It got so tight that community banks couldn’t stand in the space any more,” Brown said. “Now the pendulum is swinging the other way. A small banker can look a customer in the eye, shake their hand and know them better. You’re not working with models and prices set in New York.”

That’s become a familiar story to John Dicus, chief executive of Capitol Federal. The bank’s market share of single- family mortgages in Kansas City, about 60 miles from Topeka, fell to 10 percent in mid-2008 from about 20 percent five years ago, when competitors offered subprime loans to the riskiest customers and Alt-A mortgages that didn’t require proof of income, Dicus said.

No Subprime Backlash

Capitol Federal, with a default rate one-seventh the average of the top 10 U.S. banks, lost business because it wouldn’t lower its credit standards. Now it’s benefiting.

Profit for the fiscal year ended Sept. 30 jumped 58 percent and only a quarter of one percent of loans is delinquent. The lender’s market share is up to 12 percent and opportunities continue to arise, Dicus said.

“We haven’t been adversely affected through the subprime and Alt-A meltdown,” Dicus said in an interview. “The smaller banks, the ones that have been successful through this, will play a big part in bringing us out of it.”

Hudson City Bancorp., a Paramus, New Jersey-based home lender, said Jan. 21 that fourth-quarter profit climbed 60 percent, bolstered by increased mortgage originations. The stock has dropped 17 percent in the past year, compared with the 66 percent slump in the 24-member KBW Bank Index.

More Growth

“The reduced number of lenders will continue to fuel our mortgage growth,” said CEO Ronald Hermance, in a statement.

Capitol Federal and Hudson City hold most of their loans rather than sell them. Banks that sell their mortgages in the secondary market have been hurt because investors that buy bundled loans are only purchasing securities backed by the government. Those accounted for 99 percent of issuances in the first nine months of 2008, according to newsletter Inside MBS & ABS.

To reignite lending, the U.S. government has poured more than $200 billion into banks through the Troubled Asset Relief Program, a $700 billion fund approved by Congress in October.

As smaller banks increase lending and add market share, the biggest institutions aren’t losing their dominance. Citigroup, JPMorgan, Bank of America and Wells Fargo accounted for two- thirds of U.S. mortgages last year, said Cecala of Inside Mortgage Finance.

More Opportunities

Companies in the Nasdaq Bank Index had total loan portfolios of $1 trillion at the end of the third quarter, according to Bloomberg data. The four biggest lenders had 3.5 times that amount, led by Bank of America with $1.1 trillion, which included loans made by Countrywide and Merrill Lynch & Co.

The average market capitalization of banks in the Nasdaq group is $251 million, while the top four U.S. banks are each worth an average of $52 billion.

Still, John Koelmel says his small bank in upstate New York, First Niagara Financial Group Inc., is finding more opportunities than ever and plans to expand lending in the next two to three years.

The shares have jumped 22 percent in the past year and the lender has added customers including small businesses, real estate firms and home owners as bigger competitors like HSBC Holdings Plc and Bank of America scale back in the region, he said.

“It’s abundantly clear to us that they’re not pulling back temporarily, they’re retrenching for the longer term,” said Koelmel, 56, from his company’s headquarters in Lockport, New York. “That’s created and translated into meaningful opportunities for us. It continues to open doors for us everyday.”

To contact the reporters on this story: Dan Levy in San Francisco at [e-mail]; Ari Levy in San Francisco at [e-mail]

Last Updated: January 23, 2009 00:01 EST

[10 bagger]

Small Banks..

I think now is the time to do some DD on the small banks..hank

[10 bagger]

FFSL...First Independence Corp.

First Independence Corporation
For Further Information, Call
Anne M. Bertie, Vice President & CFO
[phone]


FIRST INDEPENDENCE ANNOUNCES FOURTH QUARTER EARNINGS AND FISCAL YEAR END RESULTS:

INDEPENDENCE, KS (October 21, 2008) -- First Independence Corporation (OTC Bulletin Board: FFSL.OB) (the “Company”), reported net earnings of $427,000 for the fourth quarter of fiscal 2008, compared to $366,000 for the fourth quarter of fiscal 2007.

Diluted earnings per share of common stock for the fourth quarter of fiscal 2008 were $.51, compared to diluted earnings per share of $.42 for the fourth quarter of fiscal 2007. Net earnings for the 2008 fiscal year were $1,799,000, compared to $1,377,000 for the 2007 fiscal year. Diluted earnings per share for the 2008 fiscal year were $2.12, compared to diluted earnings per share of $1.57 for the 2007 fiscal year.

Return on average assets for the fourth quarter of fiscal 2008 was .84% (annualized), compared to .76% (annualized), for the same period last year. Return on average equity for the fourth quarter of fiscal 2008 was 9.81% (annualized), compared
to 8.65% (annualized), in the fourth quarter of fiscal 2007. Return on average assets for the 2008 fiscal year was .91%, compared to .73% for the same period last year. Return on average equity for the 2008 fiscal year was 10.50%, compared to 8.26%, for fiscal 2007.

We had $202.2 million in assets and $17.5 million in stockholders’ equity as of September 30, 2008. During this fiscal year, we repurchased 37,621 shares of common stock, at an average cost of $18.05 per share. At September 30, 2008, total shares outstanding were 834,163.

The Company is the parent corporation for First Federal Savings and Loan Association of Independence, Kansas ("First Federal"). At September 30, 2008, First Federal exceeded all of its regulatory capital requirements. First Federal has four fullservice branch offices primarily serving Montgomery, Wilson, Crawford and Chautauqua Counties in Kansas along with a loan production office in Lawrence, Kansas.

MYRTLE & SIXTH - P.O. DRAWER 947 - INDEPENDENCE, KANSAS 67301 - 620/331-1660

Myrtle & Sixth Streets
Independence, KS 67301
Phone: [phone]
Fax: [phone]
Web Site: http://www.firstfederalsl.com


BUSINESS SUMMARY
First Independence Corporation operates as the holding company for First Federal Savings and Loan Association of Independence, which provides general banking services in southeastern Kansas. The company attracts various deposits, such as NOW accounts, First Super NOW and First Money Fund accounts, passbook savings accounts, and certificates of deposits. It also originates loans for residential, consumer, and nonresidential purposes, including one-to-four family residential real estate loans, multi-family residential loans, nonresidential mortgage loans, and construction loans, as well as various consumer and other loans, such as automobile, home equity and second mortgages, unsecured home improvement, and mobile homes loans. The company was founded in 1905 and is based in Independence, Kansas.

[10 bagger]

HBCP..

Price correction $10.16....

[10 bagger]

TNCC..

Tennessee Commerce Bancorp Reports Record Third Quarter Results
Wednesday October 29, 6:30 am ET
Net Income Jumps 6.1% to $1.9 million


FRANKLIN, Tenn.--(BUSINESS WIRE)--Tennessee Commerce Bancorp, Inc. (NASDAQ:TNCC - News) today reported record net income, assets, loans and deposits for the third quarter ended September 30, 2008. Net income rose to $1.9 million, or $0.39 per diluted share, for the third quarter of 2008, compared with $1.8 million, or $0.36 per diluted share, in the third quarter of 2007.

http://biz.yahoo.com/bw/081029/20081029005370.html?.v=2“Tennesse

e Commerce’s continued growth highlights the strength of our local market and our strategic focus on the business banking market,” stated Mike Sapp, President of Tennessee Commerce Bancorp. “We achieved record earnings in the third quarter despite the turmoil in the financial markets that significantly reduced our loan sales to other banks. Our earnings benefited from solid growth in net interest income and improved margins that more than offset the reduced fees from loan sales compared with last year. We are on track for Tennessee Commerce to report record earnings for 2008 and expect to outperform the market during these tough economic times.

“Net loans rose 35% to a record $985.6 million in the third quarter and were up almost $59 million from the linked second quarter of this year. Our deposits were up 29% to a record $988.7 million and passed the $1 billion milestone early in the fourth quarter. Based on recent banking data for our home market, Tennessee Commerce holds the number one market position for deposits in Williamson County. We are very proud of achieving these records solely from organic growth and without any assistance from mergers or acquisitions,” continued Mr. Sapp.

Third Quarter Highlights


Net income rose 6.1% to $1.9 million, or $0.39 per share
Net loans increased 35.0% to a record $985.6 million
Asset quality remained strong with a 1.22% loan loss reserve to loans
Total deposits increased 29% to a record $988.7 million
Operating efficiency ratio was 47.44%, one of the best in the industry
Net interest income increased 30.8% to $9.3 million
Net interest margin was 3.46%
Total risk-based capital was 10.18% and Tier 1 capital was 9.01% for the bank
“Loan demand remains solid in many of the business sectors we serve and the outlook for the fourth quarter is very encouraging,” continued Mr. Sapp. “We expect total loans to pass the $1 billion mark before year end based on local market demand and the contribution from our new loan production offices opened earlier this year in Minneapolis and Atlanta.”

Net interest income rose 30.8% to $9.3 million in the third quarter of 2008 compared with $7.1 million in the third quarter of 2007. The increase in net interest income was due to a 39.2% increase in average earning assets to $1.1 billion generated by growth in the loan portfolio, offset somewhat by a 21 basis point decline in net interest margin since the third quarter of 2007. Net interest margin increased 2 basis points to 3.46% in the third quarter of 2008 compared with 3.44% in the linked second quarter of 2008. Our margin growth from the linked second quarter benefited from an excellent average loan yield of 7.56% in the third quarter combined with lower average deposit costs.

Provision for loan losses rose to $1.9 million in the third quarter of 2008, compared with $1.3 million in the third quarter of last year. At the end of the third quarter, the allowance for loan losses was $12.2 million, or 1.22% of loans, compared with $9.3 million, or 1.25% of loans, in the year prior period. The increase in allowance for loan losses was primarily related to the $255.7 million growth in the loan portfolio since the third quarter of 2007.

“Total non-performing loans increased in the third quarter primarily due to four credits that are well collateralized,” noted Mr. Sapp. “We believe our loan quality is very good overall due to our diversification across a wide range of industries and our strict underwriting standards. In addition, we have no exposure to the sub-prime market. We are maintaining our very aggressive stance in monitoring credit quality and quickly moving non-performing loans through the workout process to minimize potential losses. We believe that our current allowance for loan losses is adequate based on current reviews of our loan portfolio.”

Non-interest income was down 82.9% to $98,000 compared with $574,000 in the third quarter of last year. Tennessee Commerce sold approximately $3.9 million in loans during the third quarter of 2008 for a net gain of $1,000 compared with loan sales and participations sold of $9.6 million and a $547,000 ($0.07 per share after tax) gain on sale of loans in the third quarter of 2007. The 2008 gain on sale of loans was offset largely by the reversal of loan fees related to payoffs and loans repurchased during the quarter. In addition, third quarter of 2008 non-interest income was reduced by a $97,000 loss on security sales.

“The market for inter-bank loan sales was virtually frozen during the third quarter due to the turmoil in the financial industry. Our plans for the second half of 2008 called for a higher percentage of loan sales than the prior year to help balance loan growth with our capital base. The tight liquidity in the market contributed to the shutdown in loan sales during the quarter and reduced our potential earnings for the quarter. We expect the recent injection of funds into the market will have a positive impact on the resumption of inter-bank loan sales; however, it is too early to estimate the change in market conditions on our fourth quarter loan sales and earnings since loan sales remain very low to date for the fourth quarter,” continued Mr. Sapp.

Non-interest expenses rose 28.1% to $4.4 million compared with $3.5 million in the third quarter of 2007. This increase was due primarily to higher professional fees related to audit, legal and other professional expenses. In addition, other non-interest expenses increased due to higher costs related to loan portfolio management.

Tennessee Commerce was classified as a well-capitalized bank at the end of the third quarter. Total risk-based capital was 9.87% for the holding company and 10.18% for the bank compared with regulatory requirements of 10.0% for a well-capitalized bank and minimum regulatory requirements of 8.0%. Tier 1 capital was 8.70% for the holding company and 9.01% for the bank, both well above the requirement of 6.0% for a well-capitalized bank and minimum regulatory requirements of 4.0%.

Average weighted diluted shares outstanding decreased 2.6% to 4.85 million in the third quarter of 2008 from 4.98 million in the third quarter of 2007. The decrease in average weighted shares outstanding was due to certain stock options being excluded from the most recent quarter’s calculation since they were anti-dilutive shares.

Nine Months Results


Net income rose 6.5% to $5.1 million, or $1.05 per diluted share
Net interest income increased 30.1% to $25.1 million
Non interest income declined 28.8% to $1.4 million
Gain on sale of loans decreased 22.3% to $1.4 million
Non interest expenses were up 35.5% to $12.4 million
“Tennessee Commerce outperformed the majority of its peer group during the first nine months of 2008. We benefited from our business banking model that continues to deliver above average loan growth and very efficient operations. Our efficiency ratio of 47.4% for the third quarter was one of the best in the industry and our asset-to-employee ratio rose to $13.8 million, almost four times higher than the average for other Tennessee banks,” concluded Mr. Sapp.

Net income rose 6.5% to $5.1 million for the first nine months of 2008 compared with $4.8 million in the same period of 2007. Net income per diluted share increased 6.1% to $1.05 compared with $0.99 in the first nine months of 2007.

Net interest income rose 30.1% to $25.1 million, up from $19.3 million in the first nine months of 2007 based on a 42.5% increase in average earnings assets to $986 million. Net interest margin was 3.40% for the 2008 period compared with 3.73% for the same period in 2007.

Provision for loan losses was $5.8 million for the first nine months of 2008 compared with $4.3 million for the same period in 2007. The increase was primarily related to the overall growth in the loan portfolio.

About Tennessee Commerce Bancorp, Inc.

Tennessee Commerce Bancorp, Inc. is the parent company of Tennessee Commerce Bank. The Bank provides a wide range of banking services and is primarily focused on business accounts. Its corporate and banking offices are located in Franklin, Tennessee, and it has loan production offices in Atlanta, Birmingham, and Minneapolis. Tennessee Commerce Bancorp's stock is traded on the NASDAQ Global Market under the symbol TNCC.

Information contained in this press release, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or expected. Among the key factors that may have a direct bearing on Tennessee Commerce Bancorp's operating results, performance or financial condition are competition, changes in interest rates, the demand for its products and services, the ability to expand, and numerous other factors as set forth in the Corporation's filings with the Securities and Exchange Commission.

Additional information concerning Tennessee Commerce can be accessed at www.tncommercebank.com.

TENNESSEE COMMERCE BANCORP, INC.

[10 bagger]

(AUBN)AUBURN NATIONAL BANCORPORATION:
REPORTS THIRTEEN PERCENT INCREASE IN QUARTERLY NET EARNINGS


Third Quarter 2008 Highlights – Compared to Third Quarter 2007:
• Net earnings increased 13%
• Net interest income (on a tax-equivalent basis) increased 11%
• Return on average assets increased to 1.09%
• Average loans up 12% or $37.6 million


AUBURN, Alabama – Auburn National Bancorporation (Nasdaq: AUBN) reported record net earnings of
approximately $2.0 million, or $0.54 per share, for the third quarter of 2008, compared to $1.7 million, or $0.47 per
share, for the third quarter of 2007. Net earnings for the first nine months of 2008, were $5.7 million, or $1.55 per
share, compared to $5.1 million, or $1.38 per share, for the same period in 2007.
In the third quarter of 2008, total revenue (on a tax-equivalent basis) was approximately $6.7 million, an increase of
17% from the third quarter of 2007. Total revenue included a gain of approximately $1.1 million before taxes related to
the sale of certain real property in the third quarter of 2008. Net interest income (on a tax-equivalent basis) was
approximately $5.1 million for the third quarter of 2008, an increase of 11% from the third quarter of 2007, reflecting
strong balance sheet growth.
“Our balance sheet continues to be a source of strength and the key driver of our record earnings,” said E.L. Spencer,
Jr., President, CEO and Chairman of the Board. “As we look forward, we are fully aware of the challenges facing the
banking industry and will continue to closely monitor our asset quality.”
Credit quality remains strong, with an annualized net charge-off ratio of 0.23% for the third quarter of 2008. Although
this represents an increase from the third quarter of 2007, the Company’s annualized net charge-off ratio for the third
quarter of 2008 remains historically low. Nonperforming assets were 1.50% of total loans and foreclosed properties at
September 30, 2008, compared to 1.55% at June 30, 2008. Approximately $4.4 million of the $5.3 million in
nonperforming assets at September 30, 2008 relates to one purchased loan participation that was placed on nonaccrual
in the first quarter of 2008. Excluding the effects of this loan participation, nonperforming assets were only 0.25% of
total loans and foreclosed properties. Management continues to monitor this loan participation and currently believes
the level of the allowance for loan losses is adequate to absorb inherent losses in the loan portfolio, including this loan
participation. The provision for loan losses increased $380 thousand in the third quarter of 2008 compared with none in
the third quarter of 2007. This increase reflects growth in the loan portfolio and an increase in net charge-offs.
Noninterest income was approximately $1.5 million in the third quarter of 2008, an increase of approximately $453
thousand or 42% from the third quarter of 2007. As mentioned previously, this increase was primarily related to a gain
on the sale of certain real property in the third quarter of 2008. Noninterest income for the third quarter of 2008 reflects
a $285 thousand after-tax charge to adjust the carrying value of an affordable housing limited partnership investment
due to the correction of an accounting error in prior periods.
-moreREPORTS
THIRTEEN PERCENT INCREASE IN QUARTERLY NET EARNINGS/page 2
-more-
Noninterest expense was approximately $3.3 million, an increase of approximately $222 thousand or 7% from the third
quarter of 2007. The increase was primarily related to increases in salaries and benefits expense.
In the third quarter of 2008, the Company paid cash dividends of $680 thousand, or $0.185 per share, an increase of
$.01 per share or 6% from the third quarter of 2007. The Company’s dividend payout ratio for the third quarter of 2008
was 34.26%. As of September 30, 2008, the Company’s regulatory capital was well above the amounts required to be
“well capitalized.”
About Auburn National Bancorporation
Auburn National Bancorporation, Inc. (the “Company”) is the parent company of AuburnBank (the “Bank”), with total
assets of approximately $735 million. The Bank is an Alabama state-chartered bank that is a member of the Federal
Reserve System and has operated continuously since 1907. Both the Company and the Bank are headquartered in
Auburn, Alabama. The Bank conducts its business in East Alabama, including Lee County and surrounding areas. The
Bank operates full-service branches in Auburn, Opelika, Hurtsboro and Notasulga, Alabama. In-store branches are
located in the Auburn and Opelika Kroger stores, as well as in the Wal-Mart SuperCenter stores in Auburn, Opelika,
and Phenix City, Alabama. Mortgage loan offices are located in Phenix City, Valley, and Mountain Brook, Alabama.
Additional information about the Company and the Bank may be found by visiting www.auburnbank.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934, including, without limitation, statements about future financial and operating results,
costs and revenues, economic conditions in our markets, loan performance, and credit quality conditions, as well as
statements with respect to our objectives, expectations and intentions and other statements that are not historical facts.
Actual results may differ from those set forth in the forward-looking statements.
Forward-looking statements, with respect to our beliefs, plans, objectives, goals, expectations, anticipations, estimates
and intentions, involve known and unknown risks, uncertainties and other factors, which may be beyond our control,
and which may cause the actual results, performance or achievements of the Company or the Bank to be materially
different from future results, performance or achievements expressed or implied by such forward-looking statements.
You should not expect us to update any forward-looking statements.
All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this
cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-
K for the year ended December 31, 2007, and otherwise in our SEC reports and filings.
Explanation of Non-GAAP Financial Measures
In addition to results presented in accordance with U.S. generally accepted accounting principles (GAAP), this press
release includes certain designated net interest income amounts presented on a tax-equivalent basis, a non-GAAP
financial measure, including the presentation of total revenue and the calculation of the efficiency ratio.
The Company believes the presentation of net interest income on a tax-equivalent basis provides comparability of net
interest income from both taxable and tax-exempt sources and facilitates comparability within our industry. Although
the Company believes these non-GAAP financial measures enhance investors’ understanding of its business and
performance, these non-GAAP financial measures should not be considered an alternative to GAAP. The reconciliation
of these non-GAAP financial measures from GAAP to non-GAAP are presented on the following page.
REPORTS THIRTEEN PERCENT INCREASE IN QUARTERLY NET EARNINGS/page 3
-more-
(In thousands) 2008 2007 2008 2007
Net interest income (GAAP) $ 4,789 $ 4,324 $ 14,013 $ 12,577
Tax-equivalent adjustment 346 286 1,008 832
Net interest income (Tax-equivalent) $ 5,135 $ 4,610 $ 15,021 $ 13,409
Three Months Ended September 30, Nine Months Ended September 30,
Total revenue (GAAP) $ 6,330 $ 5,412 $ 17,812 $ 15,991
Tax-equivalent adjustment 346 286 1,008 832
Total revenue (Tax-equivalent) $ 6,676 $ 5,698 $ 18,820 $ 16,823

[10 bagger]

MALAGA FINL CORP COM MLGF: OTC Bulletin Board Market

SOLVENCY RATIOS

SHORT-TERM SOLVENCY RATIOS (LIQUIDITY)
Free Cash Flow Margin 0.00
Free Cash Flow Margin 5YEAR AVG 8.44
Cash-Flow pS 0.00
Free Cash-Flow pS 0.00
FINANCIAL STRUCTURE RATIOS
Financial Leverage Ratio (Assets/Equity) 13.20
Debt Ratio 92.42
Total Debt/Equity (Gearing Ratio) 4.95
LT Debt/Equity 4.95
LT Debt/Capital Invested 83.18
LT Debt/Total Liabilities 40.56


VALUATION RATIOS
MULTIPLES
PQ Ratio 2.14
Tobin's Q Ratio 0.06
Current P/E Ratio - LTM 6.30
Enterprise Value (EV)/EBITDA 0.01
Enterprise Value (EV)/Free Cash Flow 0.00
Dividend Yield 2.9
Price/Tangible Book Ratio - LTM 0.63
Price/Book Ratio - LTM 0.63
Price/Cash Flow Ratio 5.7
Price/Free Cash Flow Ratio - LTM 0.0
P/E Ratio (1 month ago) - LTM 5.5
P/E Ratio (26 weeks ago) - LTM 9.8
P/E Ratio (52 weeks ago) - LTM 12.2
5-Y High P/E Ratio 21.6
5-Y Low P/E Ratio 8.2
5-Y Average P/E Ratio 12.8
Current P/E Ratio as % of 5-Y Average P/E 49
P/E as % of Industry Group 48.0
P/E as % of Sector Segment 22.0
Current 12 Month Normalized P/E Ratio - LTM 6.4
PER SHARE FIGURES
Tangible Book Value pS - LTM 17.53
Book Value pS - LTM 17.53
Capital Invested pS 95.26
Cash Flow pS - LTM 1.93
Free Cash Flow pS - LTM 0.00
Earnings pS (EPS) 1.00


OPERATING RATIOS
PROFITABILITY
Return on Equity (ROE) 10.99
Return on Equity (ROE) - 5YEAR AVRG. 12.7
Return on Capital Invested (ROCI) 1.85
Return on Capital Invested (ROCI) - 5YEAR AVRG. 2.3
Return on Assets (ROA) 0.83
Return on Assets (ROA) - 5YEAR AVRG. 1.0
EBIT Margin - LTM 82.8
EBITDA Margin - LTM 82.8
Pre-Tax Profit Margin 58.42
Pre-Tax Profit Margin - 5YEAR AVRG. 62.09
Net Profit Margin 34.84
Net Profit Margin - 5YEAR AVRG. 36.80
Effective Tax Rate 40.36
Effective Tax Rate - 5YEAR AVRG. 40.68
EFFICIENCY RATIOS
Revenue per Employee - LTM 850,906
Net Income per Employee - LTM 115,075
Assets/Revenue - LTM 1,000.00
Assets/Revenue - 5YEAR AVRG. 3,748.45

[10 bagger]

Home Bancorp, Inc. (HBCP),, $44.16...

SELECTED RATIOS
For The Quarter Ended Ended
September 30, % June 30, %
(dollars in thousands) 2008 2007 Change 2008 Change
Return on average assets 1.20% 0.96% 24% 1.00% 20%

Return on average total
equity 11.12% 8.28% 34% 8.68 28%

Efficiency ratio 60.71% 66.03% 66.20%

Average equity to average
assets 10.77% 11.65% 11.48%

Core capital ratio 10.57 12.13 11.44
Net interest margin 4.19% 3.85% 3.97%

Home Bancorp Announces Third Quarter 2008 Earnings

Oct 30, 2008 20:00:00 (ET)

LAFAYETTE, La., Oct 30, 2008,,, Home Bancorp, Inc. (HBCP) the holding company for Home Bank ( http://www.home24bank.com ), a Federally chartered savings bank headquartered in Lafayette, Louisiana (the "Bank"), announced net income of $1.4 million for the third quarter of 2008, an increase of $409,000, or 42%, compared to the third quarter of 2007. Net income for the first nine months of 2008 was $3.5 million, an increase of $601,000, or 21%, compared to the first nine months of 2007.

John W. Bordelon, President and Chief Executive Officer of the Company and the Bank, stated, "At a time when anxiety in the U.S. financial system is at an all time high, our initial public offering raised over $89 million -- further bolstering our strong capital position. We begin our second century of service well positioned to serve our customers and expand our company."

"On behalf of our Board of Directors and executive management team, I want to express our deep appreciation to Home Bank's employees for their incredible loyalty and dedication to serving our customers and growing our company," added Mr. Bordelon. "We would not be in this position of strength without their tremendous efforts."

Mutual to Stock Conversion

The Company completed its initial public stock offering on October 2, 2008, and began trading on the Nasdaq Global Market on October 3, 2008. The Company issued 8,926,875 shares of its common stock for an aggregate of $89,268,750 in total offering proceeds. The net proceeds of approximately $87 million will be reflected in the Company's shareholders' equity at December 31, 2008.

Baton Rouge Expansion

Home Bank opened its first full-service branch in Baton Rouge in September 2008. The Bank also operates a loan production office in Baton Rouge and expects to open its second full-service Baton Rouge branch in December.

Loans and Credit Quality

Loans totaled $317.6 million at September 30, 2008, an increase of $20.1 million, or 7%, from September 30, 2007, and an increase of $2.4 million, or 1%, from June 30, 2008. The majority ($7.9 million) of the Bank's 2008 loan growth relates to commercial real estate loans. Contrary to the national economy, south central Louisiana continues to enjoy relatively strong economic activity.

The Company recorded a $93,000 provision for loan losses in the third quarter of 2008, compared to $59,000 during the third quarter of 2007 and $98,000 in the second quarter of 2008. Net loan charge-offs for the first nine months of 2008 were $85,000, or 0.04%, of average loans outstanding on an annualized basis, compared to $30,000 for the first nine months of 2007. Non-performing assets totaled $638,000, or 0.13%, of total assets, at September 30, 2008, compared to $1.3 million and $836,000 at September 30, 2007 and June 30, 2008, respectively.

As of September 30, 2008, the allowance for loan losses as a percentage of total loans was 0.75%, compared to 0.71% and 0.75% at September 30, 2007 and June 30, 2008, respectively.

Investment Securities Portfolio

The Bank's investment securities portfolio totaled $80.2 million at September 30, 2008, an increase of $28.7 million, or 56%, from September 30, 2007, and an increase of $11.2 million, or 16%, from June 30, 2008. At September 30, 2008, the Bank had an unrealized loss position on its investment securities portfolio of $2.5 million, compared to an unrealized gain of $66,000 at December 31, 2007. The unrealized loss relates primarily to the Bank's non-agency (private-label) mortgage-backed securities holdings, which amounted to $47.5 million, or 9% of total assets, at September 30, 2008. The decline in the recorded value of this portfolio reflects broker quotes which, in the current market, include liquidations and distressed sales. Based on management's review of the securities and the Bank's intent and ability to hold the securities until maturity, such non-agency mortgage-backed securities are not deemed to be other than temporarily impaired at September 30, 2008. The Company holds no Federal National Mortgage Association (Fannie Mae) or Federal Home Loan Mortgage Corporation (Freddie Mac) preferred stock.

Deposits

Deposits totaled $353.5 million at September 30, 2008, an increase of $8.2 million, or 2%, from September 30, 2007, and a decrease of $2.3 million, or 1%, from June 30, 2008. The Bank's focus has been on growing core deposits (i.e., checking, savings and money market accounts). As of September 30, 2008, core deposits have increased $13.4 million, or 8%, during 2008.

Accrued interest payable and other liabilities totaled $82.5 million at September 30, 2008, an increase of $79.8 million from June 30, 2008. This increase resulted from cash receipts for subscriptions to purchase shares of the Company's common stock in its initial public offering. The net proceeds of the initial public offering will be reflected in the Company's shareholders' equity at December 31, 2008.

Net Interest Income

Net interest income for the third quarter of 2008 totaled $4.6 million, an increase of $836,000, or 22%, compared to the third quarter of 2007, and an increase of $432,000, or 10%, compared to the second quarter of 2008. The Bank's net interest margin was 4.19% for the third quarter of 2008, 34 basis points higher than the same quarter a year ago and 22 basis points higher than the second quarter of 2008. Average interest-earning assets totaled $442.1 million for the quarter ended September 30, 2008, which represents increases of 12% and 5% compared to the quarters ended September 30, 2007 and June 30, 2008, respectively. The average yield on interest-earning assets for the quarter ended September 30, 2008 was 6.14%, which represents decreases of 31 and 2 basis points compared to the quarters ended September 30, 2007 and June 30, 2008, respectively.

Average interest-bearing liabilities totaled $335.5 million for the quarter ended September 30, 2008, an increase of 11% and 1% compared to the quarters ended September 30, 2007 and June 30, 2008, respectively. The average rate paid on interest-bearing liabilities for the quarter ended September 30, 2008 was 2.57%, which represents decreases of 81 and 22 basis points compared to the quarters ended September 30, 2007 and June 30, 2008, respectively.

Noninterest Income

Noninterest income for the third quarter of 2008 was $971,000, an increase of $200,000, or 26%, compared to the same quarter a year ago. The primary reasons for the increase in noninterest income compared to the same quarter last year were higher levels of service fees and charges (up 25%) and income from bank-owned life insurance policies purchased during the fourth quarter of 2007. Compared to the quarter ended June 30, 2008, noninterest income decreased $69,000, or 7%, due to reduced service fees and charges and gains on the sale of mortgage loans.

Noninterest Expense

Noninterest expense for the third quarter of 2008 was $3.4 million, an increase of $386,000, or 13%, compared to the same quarter a year ago. The primary reason for the increase in noninterest expense compared to the same quarter last year was compensation and benefits expense, which increased $314,000, or 17%, due mostly to the Bank's expansion. Compared to the quarter ended June 30, 2008, noninterest expense decreased $67,000, or 2%. The primary reasons for the decrease in noninterest expense from the previous quarter were lower marketing and data processing expenses.

This news release contains certain forward-looking statements. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could" or "may."

Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors -- many of which are beyond our control -- could cause actual conditions, events or results to differ significantly from those described in the forward-looking statements. Home Bancorp's prospectus, dated August 12, 2008, describes some of these factors, including risk elements in the loan portfolio, the level of the allowance for losses on loans, risks of our growth strategy, geographic concentration of our business, dependence on our management team, risks of market rates of interest and of regulation on our business and risks of competition. Forward-looking statements speak only as of the date they are made. We do not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made or to reflect the occurrence of unanticipated events.




HOME BANK
CONDENSED STATEMENTS OF FINANCIAL CONDITION

September 30, September 30, % June 30, December 31,
2008 2007 Change 2008 2007
Assets
Cash and
cash
equivalents $60,389,012 $19,226,509 214% $14,453,603 $11,746,082
Interest-
bearing
deposits
in banks 792,000 3,267,000 (76) 2,673,000 3,267,000
Cash
invested at
other ATM
locations 20,697,177 17,986,931 15 25,842,389 17,142,751
Securities
available
for sale,
at fair
value 76,301,887 45,545,768 68 64,853,202 56,995,287
Securities
held to
maturity 3,870,154 5,907,947 (34) 4,082,337 4,693,288
Mortgage
loans
held for
sale 281,200 1,366,200 (79) 535,000 1,174,650
Loans, net
of
unearned
income 317,564,165 297,477,394 7 315,192,357 308,582,151
Allowance
for loan
losses (2,390,573) (2,121,158) 13 (2,377,968) (2,314,132)
Loans,
net 315,173,592 295,356,236 7 312,814,389 306,268,019
Office
properties
and
equipment,
net 13,489,704 10,704,202 26 12,005,024 11,687,580
Cash
surrender
value of
bank-owned
life
insurance 5,201,472 - - 5,134,487 5,006,615
Accrued
interest
receivable
and other
assets 6,848,881 3,973,585 72 5,699,519 4,369,573
Total
Assets $503,045,079 $403,334,378 25% $448,092,950 $422,350,845


Liabilities
Deposits $353,476,182 $345,241,359 2% $355,760,365 $353,536,399
Federal
Home
Loan Bank
advances 15,843,422 6,396,491 148 38,856,903 16,883,436
Accrued
interest
payable
and other
liabilities 82,537,048 2,706,480 2,950 2,716,604 2,547,890
Total
Liabilities 451,856,652 354,344,330 28 397,333,872 372,967,725

Equity
Retained
earnings 52,854,168 48,930,514 8 51,461,993 49,339,479
Accumulated
other
comprehensive
income
(loss) (1,665,741) 59,534 (2,898) (702,915) 43,641
Total
Equity 51,188,427 48,990,048 4 50,759,078 49,383,120
Total
Liabilities
and
Equity $503,045,079 $403,334,378 25% $448,092,950 $422,350,845



HOME BANK
CONDENSED STATEMENTS OF INCOME

For The Three Months For The Nine Months
Ended September 30, % Ended September 30, %
2008 2007 Change 2008 2007 Change
Interest Income
Loans,
including
fees $5,343,053 $5,165,621 3% $15,851,725 $15,063,115 5%
Investment
securities 1,035,622 613,962 69 2,719,522 1,896,429 43
Other
investments
and deposits 405,809 577,744 (30) 1,122,387 1,616,766 (31)
Total interest
income 6,784,484 6,357,327 7 19,693,634 18,576,310 6

Interest Expense
Deposits 1,875,504 2,467,092 (24) 6,327,808 7,165,111 (12)
Federal
Home Loan
Bank advances 280,141 97,837 186 683,442 205,271 233
Total interest
expense 2,155,645 2,564,929 (16) 7,011,250 7,370,382 (5)
Net interest
income 4,628,839 3,792,398 22 12,682,384 11,205,928 13
Provision for
loan losses 92,500 59,499 55 161,437 142,386 13
Net interest
income after
provision for
loan losses 4,536,339 3,732,899 22 12,520,947 11,063,542 13

Noninterest Income
Service fees
and charges 705,167 563,310 25 2,118,281 1,674,573 26
Gain on sale
of loans,
net 41,555 83,498 (50) 192,553 218,321 (12)
Net loss on
sale of
real estate
owned - - - (3,488) - -
Other income 224,248 123,796 81 636,554 361,393 76
Total
noninterest
income 970,970 770,604 26 2,943,900 2,254,287 31

Noninterest Expense
Compensation
and
benefits 2,191,874 1,877,677 17 6,427,873 5,545,103 16
Occupancy 194,205 181,320 7 569,789 514,304 11
Marketing and
advertising 82,241 111,249 (26) 340,268 334,329
Data processing
and
communication 197,078 186,511 6 664,609 624,703 6
Depreciation 203,282 202,176 1 606,362 606,528 (0)
Other expenses 530,930 454,187 17 1,532,316 1,278,105 20
Total
noninterest
expense 3,399,610 3,013,120 13 10,141,217 8,903,072 14
Income before
income tax
expense 2,107,699 1,490,383 41 5,323,630 4,414,757 21
Income tax
expense 715,524 506,730 41 1,808,941 1,501,017 21
Net Income $1,392,175 $983,653 42% $3,514,689 $2,913,740 21%



HOME BANK
SUMMARY FINANCIAL INFORMATION

For the
Quarter
For The Quarter Ended Ended
September 30, % June 30, %
(dollars in thousands) 2008 2007 Change 2008 Change
EARNINGS DATA
Total interest income $6,785 $6,357 7% $6,504 4%
Total interest expense 2,156 2,565 (16) 2,307 (7)
Net interest income 4,629 3,792 22 4,197 10
Provision for loan losses (92) (59) 56 (98) (6)
Total noninterest income 971 771 26 1,040 (7)
Total noninterest expense 3,400 3,013 13 3,467 (2)
Income tax expense 716 507 41 569 26
Net Income $1,392 $984 41 $1,103 26


AVERAGE BALANCE SHEET DATA
Total assets $464,560 $407,927 14% $442,936 5%
Earning assets 442,051 394,055 12 422,358 5
Loans 315,431 292,534 8 311,413 1
Interest bearing deposits 296,485 295,007 1 298,548 (1)
Total deposits 359,210 347,624 3 356,153 1
Total equity 50,052 47,539 5 50,854 (2)

SELECTED RATIOS
Return on average assets 1.20% 0.96% 24% 1.00% 20%
Return on average total
equity 11.12 8.28 34 8.68 28
Efficiency ratio 60.71 66.03 (8) 66.20 (8)
Average equity to average
assets 10.77 11.65 (8) 11.48 (6)
Core capital ratio 10.57 12.13 (13) 11.44 (8)
Net interest margin 4.19 3.85 9 3.97 5


September 30, September 30, % June 30, %
2008 2007 Change 2008 Change
CREDIT QUALITY
Nonaccrual loans $552 $1,274 (57)% $787 (30)%
Accruing loans past due
90 days and over - - - - -
Total nonperforming loans 552 1,274 (57) 787 (30)
Other real estate owned 86 42 105 49 76
Total nonperforming assets $638 $1,316 (52) $836 (24)

Nonperforming assets to
total assets 0.13% 0.33% (61)% 0.19% (32)%
Allowance for loan losses
to nonperforming assets 374.7 161.2 132 284.4 32
Allowance for loan losses
to nonperforming loans 433.1 166.5 160 302.2 43
Allowance for
loan losses
to total loans 0.75 0.71 6 0.75 -

Year-to-date charge-offs $123 $36 242% $35 251%
Year-to-date recoveries 38 6 533 30 27
Year-to-date net charge-offs 85 30 183 5 1,600
Annualized YTD net
charge-offs to total loans 0.04% 0.01% 177 0.00% 1,700



SOURCE Home Bancorp, Inc.

[stock_peeker]

11:28 Janney initiates select regional banks

Janney initiates select regional banks. The firm initiates Colonial BancGroup (CNB) with a Buy and a $24 fair value, First Horizon (FHN) with a Buy and a $33 fair value, and Synovus Financial (SNV) with a Neutral and a $30 fair value.

[Teamlasvegas]

BEO Bancorp Declares Two for One Stock Split
Wednesday 08/01/2007 12:38 PM ET - BusinessWire
BEO Bancorp (OTCBB:BEOB) today announced that its Board of Directors declared a two for one stock split in the form of a 100% stock dividend. The shares will be distributed on August 20, 2007, to shareholders of record as of August 19, 2007. Shareholders will receive one additional share of common stock for every share currently owned. BEO Bancorp has 440,329 shares outstanding and will have 880,658 shares outstanding after the stock split.

"We are intent on building shareholder value. This move will seek to improve the liquidity of the stock and increase our franchise value," said E. George Koffler, President and CEO of BEO Bancorp and its subsidiary, Bank of Eastern Oregon. "We continue to post good results and are pleased to share our good fortune with the loyal group of shareholders we have," said Koffler.

Late in July, BEO Bancorp reported net income increased 73% year over year for the first half of 2007 to $1,039,000 and earning per share improved for the same period from $.81 per share to $1.32 per share. The loan portfolio grew 9.9% year over year and total assets grew 7.3% to $196,252,000.

For further information on the Company or to access Internet banking, please visit our website at http://www.beobank.com.

About BEO Bancorp

BEO Bancorp is the holding company for Bank of Eastern Oregon, which operates 11 branches and three loan production offices in nine eastern Oregon counties. Branches are located in Arlington, Ione, Heppner, Condon, Irrigon, Boardman, Burns, John Day, Prairie City, Fossil and Moro; loan production offices are located in Hermiston, Ontario, and Enterprise. Bank of Eastern Oregon also operates a mortgage division and offers brokerage services through BEO Financial Services. Bank of Eastern Oregon's website is www.beobank.com.

Forward-Looking Statements

The statements contained in this release that are not historical facts are forward-looking statements based upon management's current expectations and beliefs concerning future developments and their potential effect on BEO Bancorp. There can be no assurances that future developments affecting BEO Bancorp will be the same as those anticipated by management.

Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties. These risks and uncertainties include, but are not limited to: (1) competitive pressures in the banking and financial industries; (2) changes in interest rate environment; (3) general economic conditions, nationally, regionally, and in operating markets; (4) changes in regulatory environment; (5) changes in business conditions and inflation; (6) changes in securities markets; and (7) future credit loss experience.

SOURCE: BEO Bancorp

BEO Bancorp E. George Koffler, President & CEO, 541-676-0222 Mark Lemmon, EVP & CFO, 541-676-0224 or Wedbush Morgan Securities, Market Maker Joey J. Warmenhoven, 800-357-3680 or Howe Barnes Hoefer & Arnett, Market Maker John T. Cavender, 800-346-5544

[Teamlasvegas]

FYI & FWIW

“Start up Banks” article WSJ, Interesting but needs balanced perspective.June 10th, 2007
I recently did a study on investment results for de novo ( start up) banks. The results were quite impressive. For the sample used it showed that it was probable that an investor would achieve a total gain in value of at least 50% over the first three years the shares of the bank traded in the market. This statement is made with all the necessary caveats flying in full force i.e. each bank is unique unto inself and investors should not participate unless they have read and understand the risks involved as set out in the offering circular. Additionally, while the statistics showed that return was probable there were also banks where investor value dropped in the time period.

The recent WSJ article correctly observes that there have been 150 banks started last year. Let me add that there have been over 760 banks started since 2000. The new banks established have been the result of the market service gap left in communities due primarily to the many bank mergers that occured in the late 90’s. The article also correctly states that due to dillution of management available some of the start ups are not strong banks. Additionally the industry pressures of more loan problems and the cost of funds to banks do contribute to a tougher environment in which to make a profit banking. However, those issues don’t justify the tone and title of the article saying start ups “rush in” despite the profit and loan woes.

Solid community banks distinguish themselves from their very beginning. Their capital is raised in the community which they will serve and the Management, Organizers and Board of Directors are personally involved in the process. By doing so they are not only raising money they are building a customer base at the same time. By developing good relationship banking more demeand deposit money is garnered thus lowering cost of funds and increasing the gross interest spread for the Bank. The article also states that start up banks state they have a ” 5 year plan” in which they will open and then sell out to another bank in 5 years. If you encounter any organization spouting that line run for the exit. The article further states the premium received by the bank being acquired in the 5 year time frame is less than the average for other deals. Well no kidding. How much would you pay me for a piece of green fruit I want to sell you? Not much I’m sure. It typically takes a bank a good 5 years to hit its stride and develop full profitability. The premiums received for “ripe” banks are significantly higher.

I like investing in start up banks as one portfolio strategy. The key is doing the homework necessary to determine if the proposed bank has a probability of being a good investment. The first rule is to take each situation in its individuality and not rely on blanket conclusions and statements such as those made in the WSJ article. Some of the key elements I look at are; Location, does the bank fill a real need in the community? Management, is the management team experienced and does it have connections in the community? Capital Raise, is the bank raising its start up capital in the community it will serve and are all bank personnell involved in the process? In other words are they starting building the bank as they raise the capital? finally, make sure as an investor you understand the risks involved. I believe a well informed patient investor can do very well investing in the shares of start up banks.

[Teamlasvegas]

Mon, Jul 30, 2007

9:59 PM Federal Trust Corporation Announces 2007 Second Quarter Results - PR Newswire
8:57 PM MetroCorp Bancshares, Inc. Announces Net Income of $3.1 Million, or $0.28 Per Diluted Share, in Second Quarter 2007, and a Record Volume of $1.08 Billion in Loans and $1.20 Billion in Deposits - PrimeNewswire
8:06 PM Santa Clara Valley Bank Ranks #1 in Ventura and Santa Barbara County SBA Loan Originations - Business Wire
7:50 PM Cowlitz Bancorporation Receives Unsolicited Offer from Crescent Capital - PR Newswire
6:52 PM Georgia-Carolina Bancshares, Inc. Announces Growth in Second Quarter Earnings - PR Newswire
6:45 PM First Mountain Bancorp Announces Second Quarter and Year-to-Date 2007 Results - Business Wire
6:43 PM National Urban League Honors Citi - Business Wire
6:33 PM / CORRECTION - AMB Financial Announces Quarter Results and Payment of Cash Dividend - Market Wire
6:26 PM Brooklyn Federal Bancorp, Inc. Announces Operating Results for the Third Quarter of Fiscal 2007 and Announces a Quarterly Cash Dividend of $0.04 Per Share - PR Newswire
5:47 PM BNCCORP Reports Second Quarter 2007 Financial Results; Completes Significant Capital Transactions to Focus on Core Banking and Wealth Management Business - PR Newswire
5:45 PM Capitol Federal Financial to Present at Keefe, Bruyette, & Wood's 8th Annual Community Bank Investor Conference - PR Newswire
5:30 PM Summit State Bank Reports Second Quarter Earnings and Declaration of Dividend - PrimeNewswire
5:03 PM AMB Financial Announces Quarter Results and Payment of Cash Dividend - Market Wire
4:58 PM Georgetown Bancorp, Inc. Reports Results for Quarter Ended June 30, 2007 - Business Wire
4:58 PM Merchants Bancshares, Inc. Announces 2007 Second Quarter Results - PR Newswire
4:43 PM PAB Bankshares, Inc. Announces Second Quarter 2007 Financial Results - PrimeNewswire
4:35 PM Flushing Financial Corporation Appoints Sang Ki Han to Board of Directors - PrimeNewswire
4:35 PM First Federal of Northern Michigan Bancorp, Inc. Announces Second Quarter 2007 Earnings - PR Newswire
4:33 PM Independent Bank Corp. and O'Connell Investment Services, Inc. Announce Agreement by Rockland Trust Company to Acquire Assets from O'Connell Investment Services, Inc. - Business Wire
4:31 PM United Bankshares Declares Dividend - Business Wire
4:30 PM Nexity Financial Announces Outstanding Second Quarter Performance; Loans Grow to $629.0 Million and Diluted Net Income Per Share is $0.13 - Business Wire
4:30 PM HF Financial Corp. Announces Fourth Quarter, Full Year Earnings and Quarterly Dividend - PR Newswire
4:28 PM Dean A. Yoost Joins UnionBanCal Board of Directors - Business Wire
4:15 PM Centrue Financial Corporation Announces Extension of Stock Repurchase Program - Market Wire
4:00 PM SuffolkFirst Bank Reports Financial Results as of June 30, 2007 - PR Newswire

[CPTMatt]

The "stock picker" on CNBC said he likes COBH (PA Commerce Banc) and VLY (Valley National)

[CPTMatt]

CNBC is doing a panel about investing in small banks. Supposed to be up next. Friday July 20th around 12:35pm CST

[10 bagger]

MLGF

I don't have the time right now but if you google the bank you will find info at CALIFORINA state banking commision,, also i am sure you will find info at BEST.. Below is a link to a page on thier website that has quarterly info... As Small Banks must file with state reglatory depts and the commisioner of banking for each state I think the NASDAQ system gives them a pass.. Special rules for special people is NASDAQ's mode of oper.. If they deliste one Small Bank they would have to delist over 1400 and with the market maker paying $6.00 per month to be listed on the system as a trader in the stock(that was 1980 numbers} they look the other way.. I will be back in Small Bank mode twards the end of the year.. Be carefull in Calf because they haven't as of yet forced the bank to do meaningful writeoffs.. FRGB is still my all time favorite bank but it too has hit foreclousers... ATBC, BKSC, CACB, CWBS, FCEN, FSGI, IBCA, OPHC, PEBK, SAVB, TOWN, VCBI are others but I haven't done any DD on them for over a year..hank

http://www.malagabank.com/pages/secondary/fin_statements.html

[10 bagger]

http://www.malagabank.com/pages/secondary/fin_statements.html

[mandjb]

Question on SEC filing reqs for small banks

I'm looking into a small bank - mlgf.ob.

I can't find any SEC filings. I thought a stock would have to head for the pinks if it didn't file. Is there a different filing requirement for banks??

TIA for enlightening me.

[Gutsy Will]

Regarding CORS - Friday, was the last day to buy and qualify for special dividend. From the PR....

Corus’ special dividend will be paid to shareholders of record as of July 18, 2007, and will begin trading ex-dividend on July 16, 2007. The special dividend will be paid on August 1, 2007.

Ex-dividend it the first day it trades "without the dividend", so you would of had to own it by Friday's close.

Aside from that, ~55% of the float is short, stock has formed a bottom and headed up. Should be a breeze to get back to $24.

[OracleofNY]

Unusual Payout! CORS announces"Special $1 Dividend":

This coming Monday is THE VERY Last day to buy!(it will settle on the 18th)

On Corus website-Go to Investor's Relations -then -Press Releases:
>
>Corus announces Special div. of $1 payable july18th!
>
>http://www.corusbank.com/Investor%20Relations.asp

[10 bagger]

Mike..

Thats the reason for my choices in areas that are considered dead.. I believe that mortages given in stable semi rural areas by small banks are good paper.. The growth will come from those that have to drive to save on thier mortage payments and as more do so the new area of commuters will develope industry that includes the new populous.. Being there before others including BOA and other chain banks is the key.. As to the percentage of mortages to the banks assets ,, in flat price semi rural areas mark downs are not a problem.. The best is if this area is repopulated by those driving miles to go to work rather than spending all thier money to make mortage payments.. Just a theroy...hank

[MikeDDKing]

Hank, re: criteria...

I think another important criteria this time around is going to be their existing real estate mortgage exposure and type of exposure. I would avoid any that have subprime, Alt-A, and ARM residential real estate loans on their books. Also, all other things being equal, I think those with lower real estate mortgages on the books would be better than those with higher levels of real estate mortgages on the books. I know that generally you look for banks in areas with growing population so this may be less of an issue from a pure economic point of view. However, even if it isn't an economic issue it may be a perception issue with potential stockholders assuming that residential real estate is still in the dumps at that time (likely).

Right now I also don't have any small banks in my portfolio.

Mike

[10 bagger]

It's time to start all over again...

Just sold almost all of my last bank stock.. I posted on VMC the trades....

It's now time to start a bank list.. It will be different from the last and the criteria to be included will be lower...Please take a look at hank's small banks and see what you would change.. The new finds will be many of the old but coastal banks will not be included as much this time because the coastal housing market will be stale for a long time.. ARK,,Ala,, N.TEX,, MO,, Kansas, Western Ohio, W. Va, and OK are my guess for the next population moves for retirement.. LA and S. Miss also look good... Washington State on the shore might work.. But any way I would appreciate your thoughts.. I figure that we are 6 to 9 months away before any real progress will be made in the banking industry but pockets will happen and the job is to find any new small banks that appear without BOA or CITI in the neighborhood.. We need the place where Walmart will be in two years and they still don't have a McDonalds...hank

[biomanbaba]

anybody here study ACAS?.................................
ABOUT AMERICAN CAPITAL

American Capital is the largest U.S. publicly traded alternative asset manager with $12 billion in capital resources under management. American Capital invests directly and through its asset management business and is a global investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital invests from $5 million to $500 million in North America and euro 5 million to euro 400 million in Europe.

As of December 31, 2006, American Capital shareholders have enjoyed a total return of 617% since the Company's IPO -- an annualized return of 23%, assuming reinvestment of dividends.* American Capital has paid a total of $1.3 billion in dividends and paid or declared $22.44 in dividends per share since going public in August 1997 at $15 per share. Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at [phone], or visit http://www.AmericanCapital.com or http://www.EuropeanCapital.com.

*Including reinvestment of Q4 2006 dividend, which will be paid on 1/18/2007. Q4 dividend reinvestment amount is estimated based on the 12/31/2006 close price less a 5% discount.

Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.

This press release contains forward-looking statements. The statements regarding expected results of American Capital are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.

SOURCE American Capital Strategies Ltd.

[Stock]

Large-Cap & Mid-Cap Bank Valuation Update
Valuation and Performance Spreadsheets for Large Caps: BAC, BK, BBT, C, FITB,
JPM, KEY, MEL, MI, MTB, NCC, NFB, NTRS, PNC, RF, STI, STT, USB, WB, WFC, ZION

And Mid-Cap Bank Stocks: ASO, ASBC, BXS, CBCF, CBSS, CMA, CNB,
CYN, FNB, FHN, FMER, FULT, HBAN, ONB, SKYF, SNV, SUSQ, TCB, UB, WL, VLY

http://home.flash.net/~factoids/fact6/fs0610.htm

[Stock]

Hello. Boardmarked. I'll be back soon.

[MikeDDKing]

CSBQ - Cornerstone Bancshares, Inc. Announces 3rd Quarter 2006 Financial Results
Friday October 13, 8:00 am ET


HIXSON, Tenn., Oct. 13 /PRNewswire-FirstCall/ -- Cornerstone Bancshares, Inc. (OTC Bulletin Board: CSBQ - News) today announced the following:
ADVERTISEMENT


Cornerstone Bancshares, Inc saw its 3rd quarter earnings increase to $1.55 million or $.48 a share and $4.37 million year to date an increase of 46.4% while book earnings per share increased to $1.35 versus $.99, an increase of 36.4%. The earnings growth was the result of continued balance sheet growth and core deposit growth coupled with an increase in Cornerstone's net interest margin to 5.72%. Leading the growth in deposits were certificates of deposit which on average grew 28.9% over the same period in 2005. The Bank experienced continued exceptional loan growth as the loan portfolio finished the quarter with an average 3rd quarter balance of $287 million, up 17.3% over the same period in 2005. The loan growth was concentrated in the business sector especially in asset based and commercial real estate lending as more customers choose customer service and went with a local organization that partnered with its customers. Asset growth followed in line with loan growth as the Bank averaged $350 million in assets for the 3rd quarter of 2006 up from $294 million during the 3rd quarter of 2005 an increase of 18.7%. The elevated net interest margin is due to increased number of participated loan servicing fees and a timing difference between the Bank's repricing of assets and liabilities.

The asset quality improved slightly and remained at the superior level during the first three quarters of 2006 as non-performing assets as a percentage of average total loans remained at 0.36%. The Bank had net charge offs of $90 thousand during the third quarter and $203 thousand year to date, while providing $1,058 thousand to the loan loss allowance year to date. The large provision was created to fully fund the loan loss allowance for the loan growth realized from the first three quarters of 2006, and as a result Cornerstone was able to maintain a 1.53% allowance for possible loan losses compared to average loans.

Cornerstone Bancshares Inc. 3rd quarter 2006 earnings of $1.55 million represent a 25.7% increase over the 3rd quarter in 2005 earnings of $1,230 thousand. Earnings per share for the 3rd quarter 2006 were $0.48 compared to $0.40 per share for the 3rd quarter of 2005.

Cornerstone Bancshares, Inc. is a one-bank holding company serving the Chattanooga, Tennessee MSA with 5 branches and $350 million in assets specializing in business financial services.



CORNERSTONE BANCSHARES, INC.
Selected Financial Information
as of September 30, 2006
(in thousands)
Three Months
Ending September 30 %
EARNINGS SUMMARY 2006 2005 Change

Interest income $7,534 $5,438 38.54%
Interest expense 2,781 1,642 69.37%
Net interest income 4,753 3,796 25.21%
Provision for loan loss 205 350 -41.43%
Net interest income after provision 4,548 3,446 31.98%
Noninterest income 418 492 -15.04%
Noninterest expense 2,423 1,970 22.99%
Pretax income 2,543 1,968 29.22%
Income taxes 997 738 35.09%
Net income $1,546 $1,230 25.69%

Earnings per common share $0.48 $0.40 20.00%
Weighted average common shares
outstanding (1) 3,250,815 3,061,312



Year-to-Date
Ending September 30 %
EARNINGS SUMMARY 2006 2005 Change

Interest income $21,229 $14,604 45.36%
Interest expense 7,375 4,204 75.43%
Net interest income 13,854 10,400 33.21%
Provision for loan loss 1,058 900 17.56%
Net interest income after provision 12,796 9,500 34.69%
Noninterest income 1,535 1,064 44.27%
Noninterest expense 7,221 5,731 26.00%
Pretax income 7,110 4,833 47.11%
Income taxes 2,745 1,851 48.30%
Net income $4,365 $2,982 46.38%

Earnings per common share $1.35 $0.99 36.36%
Weighted average common shares
outstanding (1) 3,235,682 3,012,731



Three Months
AVERAGE BALANCE Ending September 30 %
SHEET SUMMARY 2006 2005 Change

Loans, net of unearned income 287,354 $245,014 17.28%
Investment securities & Other 43,486 32,092 35.50%
Earning assets 330,840 277,106 19.39%
Total assets 349,508 294,367 18.73%
Noninterest bearing deposits 35,752 35,371 1.08%
Interest bearing transaction deposits 92,026 83,245 10.55%
Certificates of deposit 136,164 105,662 28.87%
Total deposits 263,942 224,278 17.69%
Other interest bearing liabilities 46,708 39,125 19.38%
Shareholder's equity 36,359 28,901 25.81%



Year-to-Date
AVERAGE BALANCE Ending September 30 %
SHEET SUMMARY 2006 2005 Change

Loans, net of unearned income $280,166 $228,142 22.80%
Investment securities & Other 38,817 32,393 19.83%
Earning assets 318,983 260,535 22.43%
Total assets 338,902 276,952 22.37%
Noninterest bearing deposits 36,139 33,853 6.75%
Interest bearing transaction deposits 91,970 78,093 17.77%
Certificates of deposit 129,905 98,427 31.98%
Total deposits 258,014 210,373 22.65%
Other interest bearing liabilities 43,715 37,328 17.11%
Shareholder's equity 34,917 27,486 27.04%



Three Months
Ending September 30
SELECTED RATIOS 2006 2005

Average equity to average assets 10.40% 9.82%
Average net loans to average total assets 82.22% 83.23%
Return on average assets 1.77% 1.67%
Return on average total equity 17.01% 17.02%
Actual Equity on September 30, $36,864,528 $30,042,401
Actual # shares outstanding on
September 30 3,253,159 3,072,334
Book value per common share $11.33 $9.78



Year-to-Date
Ending September 30
SELECTED RATIOS 2006 2005

Average equity to average assets 10.30% 9.92%
Average net loans to average total assets 82.67% 82.38%
Return on average assets 1.72% 1.44%
Return on average total equity 16.67% 14.47%
Actual Equity on September 30,
Actual # shares outstanding on
September 30
Book value per common share





--------------------------------------------------------------------------------
Source: Cornerstone Bancshares, Inc.

[10 bagger]

CHKJ..
This is my last position in Hanks's Small Banks,, It's a very small bank that I know inside out.. The market is $19.25 bid and offered at $36.00.. I am on both sides of the trade and my position is 10X ave daily trading volume.. I suspect a buy out is comming but have nothing but a gut feeling to confirm.. hank

[MikeDDKing]

CSBQ - I sold out of my CSBQ today for a slight profit.

Mike

[MikeDDKing]

I sold out of my CWBS on Wednesday and Thursday. I made 3.4% in 3 months which is better than I can say for most of my investments in that time period.

Mike

[10 bagger]

Week Ending 08/11/06..

This posting takes in the period which I was on vacation.. As I have posted on VMC I have unwound my small banks portfolio,, Not because I'm bearish but because I think Small Banks will be dead money for the rest of the year.. The banks that I keep are within a driving range from where I live in Florida..The positions in each are large when compaired to the volumes in each but they are still growing at a rate far in excess of thier PE's.. I believe the market is in stall mode and once the large INSTITUTIONS commit thier funds into large cap stocks,, any underpinions of this market will disappear..I believe 9200 before 12200 on the dow.. Since the last posting I sold 4601 CWBS@ 27.46,, 3095 FCEN @33.06,, 565 FSGI @11.28 and 1660 PEBK @27.18.. Total closed position profits on the sold positions were $29,435.50...hank

[10 bagger]

TEST..

[stock_peeker]

Hank, you've not posted here very recently. Which banks do you currently own? I think I heard or read somewhere that you may have sold all your small banks due to pessimism about general market. Correct or not?

[10 bagger]

CHKJ earnings..

Cherokee Banking Company Announces Bank Earnings for 2nd Quarter 2006

Jul 25, 2006 10:02:34 (ET)


CANTON, Ga., July 25, 2006 /PRNewswire-FirstCall via COMTEX/ -- Cherokee Banking Company (CHKJ, Trade ), the holding company of Cherokee Bank, N.A., reported that the bank had improved earnings for the second quarter of 2006 over the same time last year. For the three months ended June 30, 2006, Cherokee Bank reported net income of $387,364 compared to $326,927, for the three months ended June 30, 2005. For the first six months of 2006, net income increased to $706,883 from $554,795 in the respective period in 2006, an increase of 27%.

Dennis Burnette, President & CEO noted that there were also improvements in key balance sheet areas. As of June 30, 2006 total assets were $194.4 million, versus $164.9 million as of June 30, 2005. Net loans increased 34% to $125.3 million from $93.4 and all asset quality indicators remain positive. Total deposits increased to $178.7 million from $142.3 million for the same period.

Cherokee Banking Company, a bank holding company, owns 100% of the outstanding common stock of Cherokee Bank, N.A., which operates two full service offices in Canton, Georgia. The bank has a loan production office in Woodstock and a full service office in Woodstock is under construction. The bank also has a Loan Production Office in adjoining Pickens County. The Company's stock trades on the OTC bulletin board under the symbol "CHKJ".

SOURCE Cherokee Banking Company


Dennis W. Burnette - President & CEO of Cherokee Banking Company, [phone]



http://www.prnewswire.com

[MikeDDKing]

CWBS - Commonwealth Bankshares, Inc., Norfolk, VA, Announces Record Earnings for the Quarter and Six Months Ended June 30, 2006 and Declares Quarterly Cash Dividend
Tuesday July 25, 9:22 am ET


NORFOLK, Va., July 25 /PRNewswire-FirstCall/ -- Commonwealth Bankshares, Inc. (Nasdaq: CWBS - News) today reported record earnings of $4.6 million for the first six months of 2006, an increase of $1.9 million or 69.2% over the comparable period in 2005. For the quarter ended June 30, 2006, the Company earned a record $2.5 million, an increase of 70.2% over the $1.5 million reported in the second quarter of 2005. On a per share basis, diluted earnings increased 29.0% to $0.89 for the six months ended June 30, 2006 compared to $0.69 for the same period in 2005. For the quarter ended June 30, 2006, diluted earnings per share was $0.49, up from $0.37 for the second quarter in 2005.

In consideration of the Company's strong financial performance and proven track record, the Directors of Commonwealth Bankshares, Inc. declared a quarterly cash dividend in the amount of 5.5 cents per share on its common stock, payable August 31, 2006, to shareholders of record as of August 21, 2006. This is the third quarterly dividend declared in 2006, for a total year to date dividend of 16.4 cents per share, up 20% from the 13.7 cents per share dividend declared during the first three quarters of 2005. Total dividends paid in 2005 and 2004 were 19.1 cents and 18.2 cents per share, respectively. All share and per share amounts have been restated for all periods presented to reflect the eleven-for-ten stock split distributed on June 30, 2006 to shareholders of record on June 19, 2006.

Edward J. Woodard, Jr., CLBB, Chairman of the Board, President and Chief Executive Officer, commented, "Our tremendous growth rate continues unabated into the first half of 2006. We are pleased to report another record quarter in both earnings and asset growth. Our second quarter earnings surpassed any previously reported quarterly earnings. Equally meaningful, our exceptional growth rate has been achieved while, at the same time, improving profitability, maintaining our sound asset quality and building our capital base. We continue to seek opportunities to grow and expand our network. In June 2006, we opened a private banking center in Norfolk. Furthermore, we plan to open additional branches over the next twelve months. As we continue to grow we are continuously looking to expand our traditional nonbanking services as well as searching for new avenues of revenue. Our mortgage subsidiary, Bank of the Commonwealth Mortgage, has expanded its mortgage lending services to the outer banks of North Carolina. Our fourth mortgage office in Kill Devil Hills, NC at 2603 N. Croatan Highway opened in May 2006. As we look to the remainder of the year, we believe we are positioned for continued strong performance and growth. Our expansion strategy, combined with sound asset quality, expanding margins and improved operating efficiencies, continues to drive our results. We look forward to continuing to execute on a strategy we believe will enhance the long-term growth of the company and value for our stockholders."

The Company's record earnings resulted in favorable profitability ratios. Profitability as measured by the Company's return on average assets (ROA) was 1.53% for the six months ended June 30, 2006 up 17 basis points from 1.36% for the first six months of 2005. Return on average equity (ROE) increased 10 basis points to 14.11% for the six months ended June 30, 2006 as compared to 14.01% for the six months ended June 30, 2005. For the quarter ended June 30, 2006, ROA was 1.60% and ROE was 15.15%. Year to date average assets increased $202.6 million or 50.7% from June 30, 2005 to June 30, 2006. Year to date average equity increased $26.4 million or 68.1% as of June 30, 2006 as compared to the comparable period in 2005, as a result of the additional capital raised in the second quarter of 2005. In addition, the Company's efficiency ratio (tax equivalent basis) was 49.37% and 47.92% for the six months and three months ended June 30, 2006 compared to 52.92% and 49.84%, respectively, during the comparable period in 2005.

The record earnings were driven by the $197.5 million or 47.6% increase in the Bank's loan portfolio from June 30, 2005 to June 30, 2006. Total loans at June 30, 2006 reached a record $612.6 million. Our strong loan demand generated record increases in interest income. Interest income on loans increased $9.7 million or 68.9% to $23.8 million for the six months ended June 30, 2006. For the quarter ended June 30, 2006 interest income on loans increased 67.6% to $12.8 million up from the $7.6 million reported in the second quarter of 2005.

Interest expense of $10.2 million for the six months ended June 30, 2006 represented a $4.9 million increase from the comparable period in 2005. For the second quarter of 2006, interest expense was $5.5 million, an increase of $2.7 million over the second quarter of 2005. The increase was primarily attributable to the record increase in the Company's average interest bearing liabilities, along with the increase in overall rates paid on liabilities as a result of the rising interest rate environment.

A fundamental source of the Company's earnings, net interest income, is defined as the difference between income on earning assets and the cost of funds supporting those assets. Significant categories of earning assets are loans and securities, while deposits and short-term borrowings represent the major portion of interest bearing liabilities. The level of net interest income is impacted primarily by variations in the volume and mix of these assets and liabilities, as well as changes in interest rates when compared to previous periods of operations. As a result of the record increases in interest income, our net interest income reached an all time quarterly high of $7.5 million for the quarter ended June 30, 2006, an increase of $2.6 million or 52.7% over the comparable period in 2005. For the six months ended June 30, 2006, net interest income reached a record $14.1 million, an increase of $5.0 million over the comparable period in 2005.

Net interest margin, which is calculated by expressing net interest income as a percentage of average interest earning assets, is an indicator of effectiveness in generating income from earning assets. The Company's net interest margin (tax equivalent basis) increased 11 basis points from 4.80% during the first six months of 2005 to 4.91% for the same period in 2006. For the quarter ended June 30, 2006, the net interest margin was 4.94% compared to 4.80% for the comparable period in 2005.

Commonwealth Bankshares exceeded its goal for asset growth. Total assets at June 30, 2006 reached a new high of $658.6 million, up 38.5% or $183.1 million from $475.4 million at June 30, 2005.

Despite the rapid growth in the Company's loan portfolio, our asset quality remains exceptional. Net charge-offs for the six months ended June 30, 2006 were $61.3 thousand, or 0.01% of year to date average loans. Non- performing assets were $255.6 thousand or 0.04% of total assets at June 30, 2006 compared to $442.0 thousand or 0.09% of total assets at June 30, 2005.

About Commonwealth Bankshares

Commonwealth Bankshares, Inc. is the parent of Bank of the Commonwealth which opened its first office in Norfolk, Virginia, in 1971, creating a community bank that was attuned to local issues and could respond to the needs of local citizens and businesses. Over the last three decades, the Company's growth has mirrored that of the communities it serves. Today, Bank of the Commonwealth has eleven bank branches strategically located throughout the Hampton Roads region and an extensive ATM network for added convenience. The Company continues to grow and develop new services, such as Online Banking and a Corporate Cash Management program and at the same time, maintain the longstanding commitment to personal service. Our slogan conveys our true corporate philosophy: "When you bank with us, you bank with your neighbors." Bank of the Commonwealth offers insurance services through its subsidiary BOC Insurance Agencies of Hampton Roads, Inc., title services through its subsidiary Executive Title Center, mortgage funding services through its subsidiary, Bank of the Commonwealth Mortgage, and investment related services through its new subsidiary Commonwealth Financial Advisors, LLC.* Additional information about the company, its products and services, can be found on the Web at http://www.bankofthecommonwealth.com.

Contact: Edward J. Woodard, Jr., CLBB, Chairman of the Board, President and Chief Executive Officer, P.O. Box 1177, Norfolk, Virginia 23501, Phone: [phone] or [e-mail] Web Site: http://bankofthecommonwealth.com

*Securities and Insurance Products are: *not insured by FDIC or any Federal Government Agency * May Lose Value * Not a Deposit of or Guaranteed by the Bank or any Bank Affiliate. Securities and insurance offered through BI Investments, LLC. member NASD and SIPC. BI Investments is associated with Bank of the Commonwealth. Commonwealth Financial Advisors, LLC is a wholly-owned subsidiary of Bank of the Commonwealth. This press release contains forward- looking statements. Words such as "anticipates," "believes," "estimates," "expects," "intends," "should," "will," variations of such words and similar expressions are intended to identify forward-looking statements. These statements reflect management's current beliefs as to the expected outcomes 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, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. Factors that could cause a difference include, among others: changes in the national and local economies or market conditions; changes in interest rates, deposit flows, loan demand and asset quality, including real estate and other collateral values; changes in banking regulations and accounting principals, policies or guidelines; and the impact of competition from traditional or new sources. These and other factors that may emerge could cause decisions and actual results to differ materially from current expectations. Commonwealth Bankshares, Inc. undertakes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.



Commonwealth Bankshares, Inc. and Subsidiaries
Selected Financial Information (Unaudited)

(in thousands, except
per share data) Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2006 2005 2006 2005
Operating Results:
Interest Income $12,991 $7,746 $24,287 $14,381
Interest Expense 5,498 2,840 10,158 5,210
Net interest income 7,493 4,906 14,129 9,171
Provision for loan losses 750 685 1,420 1,015
Noninterest income 1,267 941 2,351 1,687
Noninterest expense 4,191 2,922 8,134 5,762
Income before provision for
income taxes and
noncontrolling interest 3,819 2,240 6,926 4,081
Provision for income taxes 1,296 762 2,352 1,386
Income before noncontrolling
interest 2,523 1,478 4,574 2,695
Noncontrolling interest in
subsidiary 8 - 14 -
Net income $2,515 $1,478 $4,560 $2,695

Per Share Data**:
Basic earnings $0.54 $0.43 $0.99 $0.80
Diluted earnings $0.49 $0.37 $0.89 $0.69
Book value $14.66 $13.23 $14.66 $13.23
Dividends $0.055 $0.045 $0.109 $0.091
Basic weighted average
shares outstanding 4,637,621 3,410,330 4,602,860 3,368,221
Diluted weighted average
shares outstanding 5,266,764 4,130,471 5,250,648 4,094,732
Shares outstanding at
period-end 4,662,820 4,439,808 4,662,820 4,439,808


Period End Balances:
Assets $658,554 $475,439 $658,554 $475,439
Loans* 612,607 415,086 612,607 415,086
Loans held for sale - 32,004 - 32,004
Investment securities 8,558 5,696 8,558 5,696
Deposits 474,770 353,581 474,770 353,581
Shareholders' equity 68,376 58,752 68,376 58,752

Average Balance:
Assets $631,738 $424,799 $602,211 $399,633
Loans* 591,281 384,924 563,494 363,551
Loans held for sale - 13,901 - 10,885
Investment securities 8,787 6,715 8,838 6,805
Deposits 445,726 315,460 418,126 298,630
Shareholders' equity 66,557 39,995 65,188 38,787

Financial Ratios:
Return on average assets 1.60 % 1.40 % 1.53 % 1.36 %
Return on average
shareholders' equity 15.15 % 14.82 % 14.11 % 14.01 %
Efficiency ratio (tax
equivalent basis) 47.92 % 49.84 % 49.37 % 52.92 %
Shareholders' equity to total
assets 10.38 % 12.36 % 10.38 % 12.36 %
Loan loss allowance to loans 1.12 % 0.92 % 1.12 % 0.92 %
Loan loss allowance to
non-performing assets 2692.00 % 861.21 % 2692.00 % 861.21 %
Non-performing assets to
total assets 0.04 % 0.09 % 0.04 % 0.09 %
Net interest margin (tax
equivalent basis) 4.94 % 4.80 % 4.91 % 4.80 %
Bank's Tier 1 capital to
average assets 14.15 % 14.53 % 14.15 % 14.53 %
Bank's Tier 1 capital to risk
weighted assets 14.77 % 15.28 % 14.77 % 15.28 %
Bank's Total capital to risk
weighted assets 15.91 % 16.22 % 15.91 % 16.22 %

* Net of unearned income and loans held for sale
** All share and per share amounts have been restated for all periods
presented to reflect the eleven-for-ten stock split distributed on
June 30, 2006

[10 bagger]

FCEN and the markets..

A poster has asked me to defend from it's last PR Release... I have highlighted some very important items from this release,, The return on STKholders equity and assets has jumped well above the normal rates of returs within the calif markets.. This is due the the type of loans that FCEN has on the books.. About one half are construction loan commitments made in the past 18 months and are for inital construction and not in the somewhat toppy housing markets for mortages...Thier gains from income from non interest items has declined as the bank has not participated in conduit or sold loans off creating profits from this source.. As FCEN also has almost 110 mil in non interest deposits this speaks well for the offsetting compensating balances required to do business with the bank..Salaries and offsetting expenses have come down and the bank seems able to contain any costs due to the cost of money in rising rate enviorments... while the bank has made earnings postings this reporting period of 50% + I still feel that the normal for this bank should be over 40% for the rest of the year... As it also has a religious division some of it's deposits are less likely to leave for a 1/4 point higher rate some where else.. I own 3095 shares at a cost aver below $30.00 and have actually bought more since the earnings release... hank

1st Centennial Bancorp Announces Record Earningsel
1st Centennial Bancorp (OTCBB:FCEN), parent holding company of 1st Centennial Bank, today announced second quarter operating results. The company reported earnings for the quarter ended June 30, 2006, of $1.8 million, compared to earnings of $1.2 million for the second quarter 2005, representing a 50%, or $618,000 increase. Basic earnings per share(1) were 58 cents for the current quarter compared to 39 cents for the same period last year. Year to date income for 2006 was $3.6 million compared to $2.2 million for 2005, an increase of $1.4 million, or 59%. Year to date basic earnings per share(1) were $1.12 compared to $0.72 for the same period last year.

The Return on Average Equity and Return on Average Assets as of June 30, 2006, were 20.03% and 1.54%, respectively, compared to 15.56% and 1.16% for the same period in 2005, respectively. The increases in Return on Average Equity and Return on Average Assets are attributed to our record earnings, which resulted primarily from an increase in average earning assets.

Total net loans increased $29.6 million, or 8% from $381.2 million at Dec. 31, 2005, to $410.8 million at June 30, 2006. Deposits, at $431.9 million on June 30, 2006, increased $30.6 million, or 8% from $401.3 million at Dec. 31, 2005. Total assets reached a record high of $491 million at June 30, 2006, up 8%, or $35.0 million, from $456 million at Dec. 31, 2005. The growth in assets, loans, and deposits was due to the continued success of our business development efforts in and around the marketplaces we serve.

Thomas E. Vessey, president and chief executive officer, stated: "Management is again proud to report the most profitable quarter in the company's history. We will stay the course of our Strategic Plan for targeted results for the balance of 2006."

Patrick J. Meyer, chairman of the board, stated: "We are pleased to continue our record performance during the second quarter of 2006. We are grateful for the continued trust and confidence shown to us by our shareholders and customers, and thank our employees for their commitment to excellent customer service."

1st Centennial Bank operates its main office and construction/real estate loan production offices in downtown Redlands; its Religious Lending Group and its SBA/Commercial Lending Group and a full-service branch in Brea, Calif.; its Homeowners Association and a full-service branch in Escondido; and full-service branches in Palm Desert, Irwindale and Temecula, Calif.

The statements contained in this release that are not historical facts are forward-looking statements based on management's current expectations and beliefs concerning future developments and their potential effects on the company. Readers are cautioned not to unduly rely on forward-looking statements. Actual results may differ from those projected. These forward-looking statements involve risks and uncertainties including but not limited to the health of the national and California economies, the company's ability to implement its strategy and expand its lending operations, the company's ability to attract and retain skilled employees, customers' service expectations, the company's ability to successfully deploy new technology and gain efficiencies therefrom, the success of branch expansion, changes in interest rates, loan portfolio performance, and other factors detailed in the company's SEC filings.

Additional information is available on the Internet at www.1stcent.com or by contacting Beth Sanders, executive vice president and chief financial officer, at [e-mail].


--------------------------------------------------------------------------------

1ST CENTENNIAL BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CONDITION
June 30, 2006 and Dec. 31, 2005

Dollar amounts in thousands 2006 2005
(Unaudited)
ASSETS
Cash and due from banks $11,124 $16,862
Federal funds sold 22,730 21,505
Total cash and cash equivalents 33,854 38,367
Interest-bearing deposits in financial
institutions 2,497 2,334
Investment securities, available for sale 17,274 12,208
Stock investments restricted, at cost 1,650 1,620
Loans, net of allowance for loan losses of
$5,845 and $5,376 410,751 381,153
Accrued interest receivable 2,495 2,425
Premises and equipment, net 3,391 3,652
Goodwill 4,180 4,180
Cash surrender value of life insurance 11,400 6,735
Other assets 3,737 3,518

Total assets $491,229 $456,192

LIABILITIES
Deposits:
Noninterest-bearing demand deposits $109,761 $106,121
Interest-bearing deposits 322,183 295,154

Total deposits 431,944 401,275
Accrued interest payable 192 170
Other liabilities 3,209 3,020
Subordinated notes payable to subsidiary
trusts 18,306 18,306

Total liabilities 453,651 422,771

SHAREHOLDERS' EQUITY
Common stock, no par value; authorized
10,000,000 shares, issued and outstanding
3,200,661 and 2,100,075 shares at June 30,
2006, and Dec. 31, 2005, respectively 27,533 26,803
Retained earnings 10,174 6,617
Accumulated other comprehensive income (loss) (129) 1

Total shareholders' equity 37,578 33,421

Total liabilities and
shareholders' equity $491,229 $456,192




1ST CENTENNIAL BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
Three and Six Months Ended June 30, 2006, and 2005 (unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
Dollar amounts in thousands, 2006 2005 2006 2005
except per share amounts

Interest income:
Interest and fees on loans $9,316 $7,941 $17,874 $14,941
Deposits in financial
institutions 31 34 59 73
Federal funds sold 281 31 552 42
Investments:
Taxable 101 112 196 251
Tax-exempt 70 42 110 83

Total interest income 9,799 8,160 18,791 15,390

Interest expense:
Interest bearing demand and
savings deposits 1,427 423 2,589 775
Time deposits $100,000 or
greater 637 513 1,198 788
Other time deposits 344 263 665 468
Interest on borrowed funds 356 473 695 871

Total interest expense 2,764 1,672 5,147 2,902

Net interest income 7,035 6,488 13,644 12,488

Provision for loan losses 155 660 620 1,010

Net interest income
after provision for
loan losses 6,880 5,828 13,024 11,478

Noninterest income:
Customer service fees 357 354 685 675
Gains from sale of loans 52 250 317 305
Conduit loan sale income 63 344 558 646
Other income 174 173 254 409

Total noninterest
income 646 1,121 1,814 2,035

Noninterest expense:
Salaries and employee benefits 2,465 2,956 4,952 5,914
Net occupancy expense 571 483 1,122 930
Other operating expense 1,524 1,489 2,967 3,017

Total noninterest
expense 4,560 4,928 9,041 9,861

Income before provision
for income taxes 2,966 2,021 5,797 3,652

Provision for income taxes 1,119 792 2,234 1,413

Net income $1,847 $1,229 $3,563 $2,239

Basic earnings per share(1) $0.58 $0.39 $1.12 $0.72
Diluted earnings per share(1) $0.52 $0.36 $1.01 $0.66


(1) All per share data has been adjusted for the 50% stock
distribution declared to shareholders of record on March 3, 2006,
and distributed April 3, 2006.


1st Centennial Bancorp
Beth Sanders, 909-798-3611
Fax: [phone]
[e-mail]
www.1stcent.com

[10 bagger]

Small Banks and the markets...

For the first time i have noticed that there have been no movements in the trading of Small Banks... The earnings reports while strong by industrial or servvice companies have not been robust when compaired to other fast growing small banks.. I have sold out positions in PKBK,, PSBC,, ANCX,, FNRN and SAVB... All indications appear even though I sold nothing has occured in those markets.. ANCX is located in the Wash DC market and is one that i was always worried about.. My trade of buying on the secondary announcement and bringing my cost basis down has actually resulted in a no win or loss situation on the position...PKBK was sold at a $1720.00 loss and even though earnings appeared solid the management was not honest in thier headlines of PKBK's earnings release...PSBC and FNRN,, both Calif, were sold as that market seems unreliable at best in reporting future earnings... So in the past few days i have lightened up my in position while only buying one new,,, CSQB.. Mike brought it to my attention and it has the required screen to qualify in my portfolio.. I made my first purchase today of 888 shares at $25.50... The lightening process was due to my screens being tightened a little bit and no positions were granfathered...hank

[10 bagger]

Banks trade sometimes very strange.. Take a look at FRGB chart and the same for IBCA.. Sometimes it looks as though someone is trying to buy a large amount but break the biggest rule in buying small banks.. never pay the offer.. If you do you will pay for every share on an uptic.. as most that own these stocks never care about thier prices on a day to day basis they rarely see `that they are up.. aso keep your orders GTC.. about half my trades are made before 9:35 and then the real bids come in...

Another thing I have noticed in the last few days,, No position has gone up on earnings.. I have used this occasion to sell any position where earnings were not up at least 25%.. Just tightening my belt a little so the positions will become larger in each stock.. SAVB disappointed me but the bid was $37.05 and I offered the whole position at $37.00 and it traded at $37.06.. on over 4500 shares..The next day no trades were done in SAVB as the Volume was 0.... hank