SOURCE: Teche Holding Company

Teche Holding Company

April 23, 2009 09:30 ET

Teche Reports Solid Second Quarter Results

Diluted EPS: $0.78, FYTD EPS: $1.61, FYTD Dividend: $0.70

FRANKLIN, LA--(Marketwire - April 23, 2009) - (NYSE Amex: TSH) (NYSE Alternext US: TSH) -- Patrick Little, President and CEO of Teche Holding Company, holding company for Teche Federal Bank, today reported on earnings for the Company for the quarter ended March 31, 2009, the second quarter of fiscal 2009.

Earnings for the quarter ended March 31, 2009 amounted to $1.7 million or $0.78 per diluted share, while earnings for the fiscal year to date amounted to $3.4 million or $1.61 per diluted share.

The Company reported the following:

--  Diluted EPS for the quarter of $0.78 and YTD Diluted EPS of $1.61.
--  Fiscal year-to-date operating revenue increased 7.7%, or $1.6 million,
    to $22.0 million from $20.4 million in fiscal 2008.
--  SmartGrowth Deposits, in the past six months, increased 13.6%, or
    $44.9 million to $375.3 million from $330.4 million at September 30, 2008.
--  SmartGrowth Loans, in the past six months increased 6.1%, or $26.1
    million to $455.7 million, from $429.5 million at September 30, 2008.
--  Quarterly Dividends increased to $0.35 per share compared to $0.34 per
    share for the quarter ended March 31, 2008, an increase of 2.94%
--  Net Charge Offs for the past twelve months amounted to 0.09% of
    average loans.
--  Non-performing assets amounted to 1.05% of total assets.
--  Allowance for Loan Losses to Loans increases to 1.05%.
--  Tangible equity remained solid at 8.38% at March 31, 2009.
--  The Bank's total risk-based capital was a strong 11.98% at March 31,
    2009.
    

"Teche has not participated in the various practices that have plagued the financial industry," said Little. "Teche has not made sub-prime, teaser-rate, or other risky mortgage loans. Teche has no credit card loans or asset-backed commercial paper. We have never issued preferred stock of any kind and we did not participate in the TARP program."

"We continue to make loans, both commercial and retail, and customers continue to open new accounts. We continue to support our community in many different ways," he said.

"As a result, Teche revenues this quarter were outstanding," said Little, "with increases in both net interest income and non-interest income. Furthermore, we had increases in both SmartGrowth Deposits and SmartGrowth Loans as well as overall loan and deposit growth," he added.

"Not only is Teche profitable and well capitalized," he continued, "Teche declared and paid a $0.35 quarterly cash dividend in the second quarter. Teche has paid a cash dividend now for 55 consecutive quarters."

Earnings

Earnings for the quarter ended March 31, 2009 amounted to $1.7 million or $0.78 per diluted share, compared to the record $2.2 million, or $1.00 per diluted share for the same quarter in fiscal 2008, a decrease of 22%, primarily due to a larger than historical provision for loan losses of $1.0 million. As a result, allowance for loan losses to loans increased to 1.05%, compared to 0.90% at March 31, 2008.

Earnings for the fiscal year to date, or past six months, amounted to $3.4 million or $1.61 per diluted share, compared to $4.1 million or $1.84 per diluted share for the same period in fiscal 2008, a decrease of 17%.

"The Bank achieved these earnings for the past six months while incurring impairment charges of $0.16 per diluted share," Little said. "Our diluted earnings per share for this six month period would have been $1.77 had we not incurred these charges."

Asset Quality

The following table sets forth certain asset quality ratios for the quarters shown.

                          MAR '09   DEC '08   SEP '08   JUNE '08  MAR '08
                          --------  --------  --------  --------  --------
Net Charge-offs/Loans         0.03%     0.01%     0.01%     0.04%     0.01%
ALLL/NPLs                     84.6%     87.5%     86.8%     87.0%     84.6%
ALLL/NPAs                     77.8%     78.8%     82.0%    103.7%    106.6%
ALLL/Loans                    1.05%     0.93%     0.94%     0.93%     0.90%
Non-Accrual Loans/Loans       0.84%     0.81%     0.64%     0.56%     0.40%
NPAs/Assets                   1.05%     0.93%     0.88%     0.68%     0.67%

The provision for loan losses for the quarter ended March 31, 2009 increased to $1.0 million, compared to $155,000 for the linked quarter, and $190,000 for quarter ended March 31, 2008. The increase in the loan loss provision during the quarter ended March 31, 2009, is primarily due to an increase in loans over 90 days past due. The increase in loans over 90 days past due consists primarily of first mortgage loans on non-owner occupied condominium units located in the Baton Rouge area in the amount of $1.5 million. Total loans on non-owner occupied condominium units in the Baton Rouge area amounted to $5.0 million at March 31, 2009.

Compared to the linked quarter, total delinquent loans (which includes loans past due 30 days and over and non accrual loans) decreased this quarter $2.4 million, or 14.4%.

Operating Revenue and Expense

"Our steady increases in operating revenues for over ten years are a result of building customer relationships in the communities we serve and offering superior products and customer service," said Little.

Operating Revenue          Mar '09   Dec '08   Sep '08   Mar '08
                          --------- --------- --------- ---------
Net Interest Income       $     7.1 $     6.8 $     6.8 $     6.3
Non Interest Income       $     4.1 $     4.0 $     3.9 $     4.1
                          --------- --------- --------- ---------
Operating Revenue         $    11.2 $    10.8 $    10.7 $    10.4
                          ========= ========= ========= =========

Operating revenue for the quarter amounted to $11.2 million, an increase of 7.5% or $0.8 million, compared to the same period in fiscal 2008, primarily due to an increase in net interest income.

Net interest income increased 12.0%, or $800,000, to $7.1 million for the quarter ended March 31, 2009, compared to the same period in fiscal 2008, primarily due to an increase in net interest margin.

Non-interest income amounted to 2.12% of average assets for the quarter ended March 31, 2009, compared to 2.20% for the three months ended March 31, 2008 and to 2.05% for the linked quarter. Deposit service charges amounted to 91.0% of total non-interest income for the quarter ended March 31, 2009, compared to 91.8% for the quarter ended December 31, 2008 and 95.8% for the linked quarter.

Non-interest income amounted to 37.0% of operating income for the quarter ended March 31, 2009, compared to 39.3% for the three-months ended March 31, 2008 and 36.6%% for the linked quarter.

Non-interest expense amounted to $7.7 million for the quarter ended March 31, 2009, compared to $7.0 million for the three months ended March 31, 2008, primarily due to compensation expense.

Net Interest Margin

Net interest margin amounted to 3.92% for the quarter ended March 31, 2009; compared to 3.69% in the same period in 2008 and 3.85% for the linked quarter.

Net interest margin amounted to 3.88% for the six-month period ended March 31, 2009; compared to 3.68% for the six-months ended March 31, 2008. The increase was primarily due to a decrease in the average interest rates paid on deposit accounts as a result of increased balances in checking account and savings accounts and to a general decline in market interest rates.

Securities

The Company recorded a $77,000 gain on sale of securities which was partially offset by a $59,000 impairment charge on the portfolio of private label mortgage backed securities for the quarter March 31, 2009. The $5.7 million carrying value of these private label mortgage backed securities amounts to 0.7% of total assets and approximately 90% are rated AAA, AA or A at March 31, 2009.

       Private Label Mortgage Backed Securities as of
                      March 31, 2009

                                   Carrying Value
                                as of March 31, 2009
                                --------------------   Percent
Bond                   Face       $ in                    of
Ratings                Value    Millions   % of Face    Assets
                     ---------- ---------- ---------  ---------

AAA to A             $      6.1 $      5.1        83%      0.60%

BBB to B             $      1.7 $      0.5        29%      0.10%

CCC to C             $      0.5 $      0.1        21%      0.00%
                     ---------- ---------- ---------  ---------
                     $      8.3 $      5.7        69%      0.70%
                     ========== ========== =========  =========

Capital

The ratio of tangible equity to total assets at March 31, 2009 amounted to 8.38%, compared to 8.40% at September 30, 2008. The decrease is primarily due to stock repurchases in fiscal 2008 and an increase in assets, offset somewhat by earnings for fiscal 2008.

Total risk-based capital amounted to 11.98% compared to 12.43% at December 31, 2008 and 12.21% at September 30, 2008.

Increase in Dividends

The Company has increased dividends for six consecutive years and on March 31, 2009 paid a $0.35 per share quarterly dividend. Based on the closing price of the Company's common stock on March 31, 2009 of $30.50, the annualized dividend yield was 4.59%.

Loan Growth

Total loans and SmartGrowth loans receivable experienced growth in each of the last four quarters. "Many of the major loan conduits have experienced upheaval over the last year creating opportunities for community banks like Teche Federal to originate more high quality loans in our markets," said Little.

Six Month Growth: Loans Receivable increased 4.0%, or $23.5 million to $613.6 million at March 31, 2009, from $590.1 million at September 31, 2008. SmartGrowth Loans, consisting of commercial loans, home equity loans, alternative mortgage loans and consumer loans, were $455.7 million, or 74.3% of total loans at March 31, 2009, compared to $429.5 million, or 72.8% at September 30, 2008, a six month increase of $26.1 million, or 6.1%.

Commercial loan balances at March 31, 2009 increased 9.2%, or $17.2 million to $205.0 million, compared to $187.8 million at September 30, 2008. Consumer loan balances at March 31, 2009 increased 6.0%, or $5.9 million to $104.5 million, compared to $98.6 million at September 30, 2008.

Three Month Growth: For the linked quarter Loans Receivable increased 1.5%, or $9.1 million to $613.6 million at March 31, 2009 from $604.5 million at December 31, 2008. SmartGrowth Loans increased 2.6%, or $11.6 million to $455.7 million at March 31, 2009, from $444.1 million at December 31, 2008.

Commercial loan balances at March 31, 2009 amounted to $205.0 million, compared to $195.8 million at December 31, 2008 a linked quarter increase of $9.2 million, or 4.7%. Consumer loan balances at March 31, 2009 amounted to $104.5 million, a linked quarter increase of $2.1 million, or 2.0%.

Deposit Growth

"Total deposits and especially SmartGrowth deposits experienced solid growth over the past three and six months," said Little. "During this period, deposit insurance was suddenly increased amid what may be the most significant financial turmoil experienced since the Great Depression."

"Customers switched to insured depositories very quickly. We believe that Teche Federal benefited more than proportionately from this transfer due to our reputation in the communities that we serve, and to our ongoing, effective marketing emphasis on SmartGrowth deposits," said Little. "These benefits continue to enhance our core profitability, as demonstrated in our continued growth in revenues."

Six Month Growth: Total Deposits increased to $611.7 million at March 31, 2009, from $589.2 million at September 30, 2008, a six month increase of $22.5 million or 3.8%. The Company's SmartGrowth Deposit Accounts, consisting of checking accounts, money market accounts, and savings accounts, had solid growth. Total SmartGrowth Deposits grew $44.9 million to $375.3 million or 13.6% at March 31, 2009, from $330.4 million at September 30, 2008.

Checking account balances at March 31, 2009 increased $30.9 million, or 21.4%, to $175.5 million from $144.6 million at September 30, 2008

Three Month Growth: Total Deposits increased to $611.7 million at March 31, 2009, from $588.8 million at December 31, 2008, a three month increase of $22.9 million, or 3.9%. Total SmartGrowth Deposits grew $37.5 million, or 11.1% from $337.8 million at December 31, 2008.

SmartGrowth Deposits amounted to 61.4% of total deposits as of March 31, 2009. Checking account balances at March 31, 2009 increased 10.5%, or $16.7 million in the past three months. Checking account balances now account for 28.7% of total deposits.

Teche Holding Company is the parent company of Teche Federal Bank, which operates twenty offices in South Louisiana and serves over 60,000 customers. Teche Federal Bank is the fourth largest publicly traded bank based in Louisiana with over $750 million in assets. Deposits at Teche Federal Bank are insured up to the legal maximum amount by the Federal Deposit Insurance Corporation (FDIC). Teche Holding Company's common stock is traded under the symbol "TSH" on the NYSE AMEX.

Statements contained in this news release, which are not historical facts, are 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 which could cause actual results to differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, factors discussed in documents filed by Teche Holding Company with the Securities and Exchange Commission from time to time. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company.


                       TECHE HOLDING COMPANY

             (Dollars in thousands, except per share data)
                             Franklin, LA
                        Statements of Income
                              (UNAUDITED)

                                  Three months  Three months  Three months
                                     ended         ended         ended
                                     March       December        March
                                      2009          2008          2008
                                  ------------  ------------  ------------

Interest Income                   $     11,013  $     11,214  $     11,391
Interest Expense                         3,950         4,378         5,082
                                  ------------  ------------  ------------
Net Interest Income                      7,063         6,836         6,309
Provision for Loan Losses                1,035           155           190
                                  ------------  ------------  ------------
Net Interest Income after
 Provision for Loan Losses               6,028         6,681         6,119
Non Interest Income                      4,114         3,952         4,083
Non Interest Expense                     7,678         7,595         6,979
                                  ------------  ------------  ------------
Income Before Gain on Sales of
 Securities and Income Taxes             2,464         3,038         3,223
Gain(Loss) on Securities                    18          (436)           --
Income Taxes                               826           838         1,039
                                  ------------  ------------  ------------

Net Income                        $      1,656  $      1,764  $      2,184
                                  ============  ============  ============

Selected Financial Data

Dividends Declared Per Share      $       0.35  $       0.35  $       0.34
Basic Earnings Per Common Share   $       0.78  $       0.83  $       1.01
Diluted Earnings Per Common Share $       0.78  $       0.83  $       1.00
Annualized Return on Avg. Assets          0.85%         0.92%         1.18%
Annualized Return on Avg. Equity          9.24%        10.37%        12.39%
Annualized Return on Avg.
 Tangible Equity (1)                      9.79%        11.00%        13.15%
Yield on Interest Earning Assets          6.11%         6.31%         6.65%
Cost of Interest Bearing
 Liabilities                              2.47%         2.77%         3.31%
Spread                                    3.64%         3.54%         3.35%
Net Interest Margin                       3.92%         3.85%         3.69%
Non-Interest Income/Avg. Assets           2.12%         2.05%         2.20%
Non-Interest Expense/Avg. Assets          3.94%         3.94%         3.76%
Quarterly Net Charge Offs/Avg.
 Loans                                    0.03%         0.01%         0.01%
Weighted avg. shares Outstanding
    Basic                                2,118         2,118         2,170
    Diluted                              2,128         2,128         2,183

AVERAGE BALANCE SHEET DATA
Total Assets                      $    780,054  $    770,227  $    743,423
Earning assets                    $    720,998  $    710,543  $    684,758
Loans                             $    606,951  $    595,771  $    588,962
Interest-bearing deposits         $    532,033  $    528,575  $    522,464
Total deposits                    $    596,291  $    590,537  $    576,453
Total stockholders' equity        $     71,689  $     68,057  $     70,499

(1) Eliminates the effect of goodwill and the core deposit intangible
    assets and the related amortization expense on a tax-effected basis.
    The amount was calculated using the following information

Average Stockholders' Equity      $      71,689 $      68,057 $      70,499
Less average goodwill and other
 intangible assets, net of
 related income taxes                     3,708         3,715         3,744
                                  ------------- ------------- -------------
Average Tangible Equity           $      67,981 $      64,342 $      66,755
                                  ============= ============= =============

Net Income                        $       1,656 $       1,764 $       2,184
Plus Amortization of core deposit
 intangibles, net of related
 income taxes                                 7             7            10
                                  ------------- ------------- -------------
Net Income, as adjusted           $       1,663 $       1,771 $       2,194
                                  ============= ============= =============




                             TECHE HOLDING COMPANY

                 (Dollars in thousands, except per share data)
                                 Franklin, LA
                             Statements of Income
                                 (UNAUDITED)

                                            Six months       Six months
                                            ended March      ended March
                                               2009             2008
                                          ---------------  ---------------

Interest Income                           $        22,227  $        22,753
Interest Expense                                    8,329           10,314
                                          ---------------  ---------------
Net Interest Income                                13,898           12,439
Provision for Loan Losses                           1,190              370
                                          ---------------  ---------------
Net Interest Income after Provision for
 Loan Losses                                       12,708           12,069
Non Interest Income                                 8,068            7,990
Non Interest Expense                               15,273           13,973
                                          ---------------  ---------------
Income Before Gain on Sales of Securities
 and Income Taxes                                   5,503            6,086
Gain (Loss) on Securities                            (419)              --
Income Taxes                                        1,664            2,019
                                          ---------------  ---------------

Net Income                                $         3,420  $         4,067
                                          ===============  ===============

Selected Financial Data
Dividends Declared Per Share              $          0.70  $         0.675
Basic Earnings Per Common Share           $          1.61  $          1.86
Diluted Earnings Per Common Share         $          1.61  $          1.84
Annualized Return on Avg. Assets                     0.88%            1.11%
Annualized Return on Avg. Equity                     9.68%           11.79%
Annualized Return on Avg. Tangible
 Equity (1)                                         10.26%           12.52%
Yield on Interest Earning Assets                     6.21%            6.74%
Cost of Interest Bearing Liabilities                 2.62%            3.40%
Spread                                               3.59%            3.33%
Net Interest Margin                                  3.88%            3.68%
Non-Interest Income/Avg. Assets                      2.08%            2.18%
Non-Interest Expense/Avg. Assets                     3.94%            3.81%
FYTD Charge Offs/Avg. Loans                          0.04%            0.01%
Weighted avg. shares Outstanding
  Basic                                             2,118            2,190
  Diluted                                           2,128            2,212

AVERAGE BALANCE SHEET DATA

Total Assets                              $       775,087  $       733,582
Earning assets                            $       715,784  $       675,578
Loans                                     $       601,299  $       582,540
Interest-bearing deposits                 $       529,407  $       511,369
Total deposits                            $       593,382  $       564,644
Total stockholders' equity                $        70,648  $        68,998

(1) Eliminates the effect of goodwill and the core deposit intangible
    assets and the related amortization expense on a tax-effected basis.
    The amount was calculated using the following information

Average Stockholders' Equity              $        70,648  $         68,998
Less average goodwill and other
 intangible assets, net of related income
 taxes                                              3,712             3,749
                                          ---------------  ----------------
Average Tangible Equity                   $        66,936  $         65,249
                                          ===============  ================

Net Income                                $         3,420  $          4,067
Plus Amortization of core deposit
 intangibles, net of related income taxes              14                19
                                          ---------------  ----------------
Net Income, as adjusted                   $         3,434  $          4,086
                                          ===============  ================




                            TECHE HOLDING COMPANY
                (Dollars in thousands, except per share data)
                                Franklin, LA
                               Balance Sheets
                                 (UNAUDITED)
                                     at

                                Mar. 31,   Dec. 31,   Sept. 30,  Mar. 31,
                                  2009       2008       2008       2008
                                ---------  ---------  ---------  ---------

SmartGrowth Loans
  Consumer                      $ 104,524  $ 102,438  $  98,632  $  87,532
  Commercial                      204,973    195,754    187,791    176,859
  Home Equity                      57,852     57,720     55,713     54,027
  Alternative Mortgage Loans       88,305     88,181     87,404     88,710
                                ---------  ---------  ---------  ---------
Total SmartGrowth Loans           455,654    444,093    429,540    407,128
Mortgage Loans (owner occupied
 conforming)                      157,954    160,410    160,596    187,592
                                ---------  ---------  ---------  ---------
                                  613,608    604,503    590,136    594,720
Allowance for Loan Losses          (6,478)    (5,631)    (5,545)    (5,388)
                                ---------  ---------  ---------  ---------
Loans Receivable, Net             607,130    598,872    584,591    589,332

Cash and Securities               139,149    120,235    135,819    117,446
Goodwill and Other Intangibles      3,734      3,745      3,756      3,782
Foreclosed Real Estate                672        672        343      1,104
Other                              44,811     44,094     44,979     43,901
                                ---------  ---------  ---------  ---------
TOTAL ASSETS                    $ 795,496  $ 767,618  $ 769,488  $ 755,565
                                =========  =========  =========  =========

SmartGrowth Deposits
  Checking                      $ 175,477  $ 158,742  $ 144,601  $ 146,837
  Money Market                    120,865    121,621    130,399    135,349
  Savings                          78,944     57,387     55,390     54,106
                                ---------  ---------  ---------  ---------
Total Smart Growth Deposits       375,286    337,750    330,390    336,292
Time Deposits                     236,403    251,032    258,838    261,716
                                ---------  ---------  ---------  ---------
Total Deposits                    611,689    588,782    589,228    598,008

FHLB Advances                     107,089    103,491    104,877     84,599
Other Liabilities                   6,656      6,013      7,339      5,479
Stockholders' Equity               70,062     69,332     68,044     67,479
                                ---------  ---------  ---------  ---------
TOTAL LIABILITIES AND
 STOCKHOLDERS' EQUITY           $ 795,496  $ 767,618  $ 769,488  $ 755,565
                                =========  =========  =========  =========

Ratio of Equity to Assets            8.81%      9.03%      8.84%      8.93%
Tangible Equity Ratio (2)            8.38%      8.59%      8.40%      8.48%
Risk-Based Capital Ratio            11.98%     12.43%     12.21%     12.10%
Book Value per Common Share     $   33.08  $   32.72  $   32.12  $   31.94
Tangible Book Value Per Common
 Share (2)                      $   31.33  $   31.00  $   30.37  $   30.18
Non-performing Assets/Total
 Assets                              1.05%      0.93%      0.88%      0.67%
Shares Outstanding (in
 thousands)                         2,118      2,116      2,118      2,112

(2) Eliminates the effect of goodwill and the core deposit intangible
    assets and the related accumulated amortization on a tax-effected
    basis.  The amount was calculated using the following information:

Stockholders' Equity            $  70,062  $  69,332  $  68,044     67,479
Less goodwill and other
 Intangible assets, net of
 related income taxes              (3,704)    (3,712)    (3,721)    (3,737)
                                ---------  ---------  ---------  ---------
Tangible Stockholders' Equity   $  66,358  $  65,620  $  64,323  $  63,742
                                =========  =========  =========  =========

Total Assets                    $ 795,496  $ 767,619  $ 769,488  $ 755,565
Less goodwill and other
 Intangible assets, net of
 related income taxes              (3,704)    (3,712)    (3,721)    (3,737)
                                ---------  ---------  ---------  ---------
Total Tangible Assets           $ 791,792  $ 763,907  $ 765,767  $ 751,828
                                =========  =========  =========  =========




Allowance for Loan Loss


(in 000's)                 MAR '09   DEC '08   SEP '08  JUNE '08   MAR '08
                          --------- --------- --------- --------- ---------
Beginning ALLL            $   5,631 $   5,545 $   5,470 $   5,388 $   5,261
Provision for Loan Losses     1,035       155       160       295       190
Net Charge-offs                 188        69        85       213        63
Ending ALLL               $   6,478 $   5,631 $   5,545 $   5,470 $   5,388




                                                      90 Days + 9 0 Days +
Quarter-End Loan Data    Total    Charge-   Charge-     Non        Non
March 31, 2009           Loans     Offs      Offs     Accrual    Accrual
                        Dollars   Dollars Percentage  Dollars   Percentage
                       ---------  ------- ----------  --------- ----------
Real Estate Loans
  Construction         $  26,846  $     0       0.00% $      54       0.20%
  Permanent, Secured
   by:
    1-4 Dwelling
     Units:
      Revolving,
       Open-End Loans     14,322        0       0.00%        19       0.13%
      All Other
        Secured by
         First Liens     329,032       14       0.00%     3,366       1.02%
        Secured by
         Junior Liens     14,964       62       0.41%        79       0.53%
    Multifamily (5+
     Dwelling Units)      28,031        0       0.00%     2,725       9.72%
    Nonresidential
     Property (Except
     Land)                80,382        0       0.00%       371       0.46%
    Land                  33,707        2       0.01%       360       1.07%

Non-Real Estate Loans:
  Commercial Loans        29,746       20       0.07%       271       0.91%
  Consumer Loans:
      Loans on
       Deposits            7,571        1       0.01%       121       1.60%
      Auto Loans           3,309        3       0.09%        51       1.54%
      Mobile Home
       Loans              39,902       77       0.19%       197       0.49%
      Other                5,796        9       0.16%        47       0.81%
                       ---------  -------             ---------

Gross Loans            $ 613,608  $   188       0.03% $   7,661       1.25%
                       =========  =======             =========

Non-accruals           $   5,152
OREO & Foreclosed            672
90 + Days Past Due         2,509
                       ---------
    Nonperforming
     Assets            $   8,333
                       =========

NPAs/Assets                 1.05%
NPAs/(Loans + OREO)         1.36%
LLR/Loans                   1.05%
Net Charge-offs/Loans       0.03%




                                                     90 Days +  90 Days +
Quarter-End Loan Data   Total    Charge-   Charge-      Non         Non
December 31, 2008       Loans     Offs      Offs      Accrual     Accrual
                       Dollars   Dollars Percentage   Dollars   Percentage
                      ---------  ------- ----------  ---------- ----------
Real Estate Loans
  Construction        $  26,309  $     -       0.00% $        -       0.00%
  Permanent, Secured
   by:
    1-4 Dwelling
     Units:
      Revolving,
       Open-End
       Loans             12,116        -       0.00%         19       0.16%
      All Other
        Secured by
         First Liens    327,762       14       0.00%      4,030       1.23%
        Secured by
         Junior
         Liens           15,472        -       0.00%        110       0.71%
    Multifamily (5+
     Dwelling Units)     29,091        -       0.00%        559       1.92%
    Nonresidential
     Property (Except
     Land)               74,665        -       0.00%        371       0.50%
    Land                 34,888        -       0.00%        265       0.76%

Non-Real Estate
 Loans:
  Commercial Loans       28,445        -       0.00%        315       1.11%
  Consumer Loans:
      Loans on
       Deposits           8,304        -       0.00%        258       3.11%
      Auto Loans          2,951        -       0.00%         39       1.32%
      Mobile Home
       Loans             38,833       36       0.09%        455       1.17%
      Other               5,666       19       0.34%         13       0.23%
                      ---------  -------             ----------

Gross Loans           $ 604,502  $    69       0.01% $    6,434       1.06%
                      =========  =======             ==========

Non-accruals          $   4,908
OREO & Foreclosed           672
90 + Days Past Due        1,526
                      ---------
     Nonperforming
      Assets          $   7,106
                      =========

NPAs/Assets                0.93%
NPAs/(Loans + OREO)        1.17%
LLR/Loans                  0.93%
Net Charge-offs/Loans      0.01%




Average
 Loan
 Balances &
 Yields
Linked
 Quarter
 Comparison 03/31/2009 03/31/2009  12/31/2008 12/31/2008   Change   Change
             Balance     Yield      Balance     Yield     Balance   Yield
            ---------- ----------  ---------- ----------  --------- ------
Real Estate
 Loans
  1-4
   Family   $  374,209       6.34% $  373,041       6.32% $   1,168   0.02%
  Commercial   127,325       6.23%    119,505       6.62%     7,820  -0.39%
            ----------             ----------             ---------
               501,534       6.32%    492,546       6.39%     8,988  -0.07%

Non-Real
 Estate
 Loans
  Commercial    28,849       6.46%     29,500       6.52%      -651  -0.06%
  Consumer      75,567       9.30%     74,929       9.16%     1,638   0.13%
            ----------             ----------             ---------
               105,416       8.52%    104,429       8.42%       987   0.10%

            ----------             ----------             ---------
Total All
 Loans      $  606,950       6.70% $  596,975       6.74% $   9,975  -0.04%
            ==========             ==========             =========


Average
 Loan
 Balances &
 Yields
Prior Year
 Comparison 03/31/2009 03/31/2009  03/31/2008 03/31/2008   Change   Change
              Balance    Yield       Balance    Yield      Balance   Yield
            ---------- ----------  ---------- ----------  --------- ------

Real Estate
 Loans
  1-4
   Family   $  374,209       6.34% $  390,031       6.62% $ -15,822  -0.28%
  Commercial   127,325       6.23%    115,384       7.37%    11,941  -1.14%
            ----------             ----------             ---------
               501,534       6.32%    505,415       6.79%    -3,881  -0.47%

Non-Real
 Estate
 Loans
  Commercial    28,849       6.46%     20,870       7.53%     7,979  -1.07%
  Consumer      76,567       9.30%     64,998       9.43%    11,569  -0.13%
            ----------             ----------             ---------
               105,416       8.52%     85,868       8.96%    19,548  -0.44%

            ----------             ----------             ---------
Total All
 Loans      $  606,950       6.70% $  591,283       7.11% $  15,667  -0.41%
            ==========             ==========             =========




Interest-bearing Liabilities:  Linked Quarter Comparison


Average balances            03/31/2009  03/31/2009  12/31/2008  12/31/2008
                             $Balance   Avg. Yield   $Balance   Avg. Yield
                            ----------- ----------  ----------- ----------
  NOW Accounts              $   102,831       0.60% $    92,918       0.58%
  Non-interest bearing
   Deposits                      64,437       0.00%      61,691       0.00%
                            ----------- ----------  ----------- ----------
    Checking Total              167,268       0.37%     154,879       0.35%

  Savings Accounts               65,605       0.90%      55,794       0.82%
  Money Market Accounts         120,379       1.46%     123,950       1.92%
                            ----------- ----------  ----------- ----------

  Total Smart Growth
   Deposits                     353,252       0.84%     334,623       1.01%

  Time Deposits                 243,039       3.27%     255,914       3.65%

  Total Deposits            $   596,291       1.83% $   590,537       2.15%

  FHLB Advances                 106,795       4.57%     103,974       4.62%
                            -----------             -----------

Total Interest-bearing
 liabilities                $   638,649       2.47% $   632,550       2.77%
                            ===========             ===========


Average balances              Change      Change     %Balance
                             $Balance   Avg. Yield    Change
                            ----------- ----------  ----------
  NOW Accounts              $     9,913       0.02%       10.7%
  Non-interest bearing
   Deposits                       2,476       0.00%        4.5%
                            ----------- ----------  ----------
    Checking Total               12,389       0.02%        8.0%

  Savings Accounts                9,811      -0.07%       17.6%
  Money Market Accounts          -3,571      -0.46%       -2.9%
                            ----------- ----------  ----------

  Total Smart Growth
   Deposits                      18,629      -0.17%        5.6%

  Time Deposits                 -12,875      -0.38%       -5.0%

  Total Deposits            $     5,754      -0.32%        1.0%

  FHLB Advances                   2,821      -0.05%        2.7%
                            -----------

Total Interest-bearing
 liabilities                $     6,099      -0.29%        1.0%
                            ===========


Interest-bearing Liabilities: Prior Year Comparison


Average balances             03/31/2009 03/31/2009   03/31/2008 03/31/2008
                              $Balance  Avg. Yield    $Balance  Avg. Yield
                            ----------- ----------  ----------- ----------
  NOW Accounts              $   102,831       0.60% $    83,756       0.53%
  Non-interest bearing
   Deposits                      64,437       0.00%      53,987       0.00%
                            ----------- ----------  ----------- ----------
    Checking Total              167,268       0.37%     137,743       0.32%

  Savings Accounts               65,605       0.90%      51,521       0.75%
  Money Market Accounts         120,379       1.46%     121,946       3.19%
                            ----------- ----------  ----------- ----------

  Total Smart Growth
   Deposits                     353,252       0.84%     311,210       1.52%

  Time Deposits                 243,039       3.27%     265,241       4.27%

  Total Deposits            $   596,291       1.83% $   576,451       2.40%

  FHLB Advances                 106,795       4.57%      92,457       4.63%
                            -----------             -----------

Total Interest-bearing
 liabilities                $   638,649       2.47% $   614,921       3.31%
                            ===========             ===========


Average balances              Change      Change     %Balance
                             $Balance   Avg. Yield    Change
                            ----------- ----------  ----------
  NOW Accounts              $    19,075       0.07%       22.8%
  Non-interest bearing
   Deposits                      10,450       0.00%       19.4%
                            ----------- ----------  ----------
    Checking Total               29,525      -0.05%       21.4%

  Savings Accounts               14,084       0.15%       27.3%
  Money Market Accounts          -1,567      -1.73%       -1.3%
                            ----------- ----------  ----------

  Total Smart Growth
   Deposits                      42,042      -0.68%       13.5%

  Time Deposits                 -22,202      -1.00%       -8.4%

  Total Deposits            $    19,840      -0.57%        3.4%

  FHLB Advances                  14,338      -0.06%       15.5%
                            -----------

Total Interest-bearing
 liabilities                $    23,728      -0.84%        3.9%
                            ===========

Contact Information

  • For More Information Contact:
    Patrick Little
    President and CEO
    (337) 560-7151