Siuslaw Announces Third Quarter Earnings Less Than the Same Quarter Last Year

Siuslaw Financial Group (SFGP) today announced operating results for the third quarter, ending September 30, 2009, including after tax net income of $780,000. This is compared to net income of $1,179,000 reported for the same period last year. Earnings per diluted common share totaled $0.19 for the quarter compared to $0.28 last year.

The $400,000 difference in net income is a result of Siuslaw Bank, the Group’s major subsidiary, reserving $450,000 for future loan losses during the quarter, an allocation of $100,000 was made during the same period a year ago. Also, the special assessment for FDIC insurance premium of $125,000 impacted third quarter earnings.

Year-to-date after tax earnings totaled $2.719 million compared to $3.449 million reported on September 30, 2008, down $730 thousand, a reflection of a $1.1 million allocation for future loan losses made during the first three quarters this year, compared to $100 thousand allocated during the same period in 2008. Despite the allocation for future loan losses, the reported after tax net income represents a return on shareholder equity (ROE) of 12.27% and return on average assets (ROA) at 1.28% which are substantially above industry norms.

“Contrary to national trends and statistics, Siuslaw continues to lend money to its customers and increased loans by $6.5 million over the same period a year ago,” states Bruce Webber, Chief Credit Officer. Net loans totaled $219 million on September 30, 2009 compared to $212.5 million a year ago. Deposits remained steady at $235 million and assets increased to $283.4 million on September 30, 2009.

“Bad real estate loans continue to hammer Oregon banks. The state’s 33 chartered banks collectively lost $280 million in the first half of this year, according to figures released by the FDIC. The news is not all bad, especially among smaller banks with limited exposure to Portland and central Oregon housing markets. Citizens Bank in Corvallis, Siuslaw Bank in Florence and Bank of Eastern Oregon all reported profits in the first half of this year,” according to the Portland Business Journal.

Siuslaw Financial Group (SFGP) is quoted on the NASDAQ over-the-counter bulletin board. Its stock closed on September 30, 2009 at 8.50 and has a 52-week price range of $8.15-16.00.

Headquartered in Florence, Siuslaw Financial Group is the parent company of Siuslaw Bank, with offices in Cottage Grove, Creswell, Eugene, Florence, Mapleton, Oakridge, Pleasant Hill, Springfield and Veneta, all in Lane County.

SIUSLAW FINANCIAL GROUP
SELECTED FINANCIAL HIGHLIGHTS
(IN THOUSANDS, EXCEPT PER SHARE DATA, UNAUDITED)
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			09/30/09		09/30/08		09/30/07
INCOME STATEMENT DATA
	TOTAL INTEREST INCOME		12,321		13,152		14,230
	TOTAL INTEREST EXPENSE		2,076		3,251		3,779
	NET INTEREST INCOME		10,245		9,901		10,451
	PROVISION FOR LOAN LOSSES		1,100		100		1,315
	NET INTEREST INCOME AFTER RLL		9,145		9,801		9,136
	NON INTEREST INCOME		2,897		2,598		4,338
	NON INTEREST EXPENSE		7,841		7,021		7,783
	INCOME BEFORE TAXES		4,201		5,378		5,691
	PROVISION FOR TAXES		1,482		1,929		2,039
	NET INCOME		2,719		3,449		3,652
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SHARE DATA
	EARNINGS PER COMMON SHARE		0.66		0.83		0.88
	BOOK VALUE PER COMMON SHARE		7.20		6.91		6.71
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			09/30/09		09/30/08		09/30/07
BALANCE SHEET DATA
	INVESTMENT SECURITIES AVAILABLE FOR SALE		19,677		28,477		34,514
	NET LOANS		218,969		212,467		196,275
	TOTAL ASSETS		283,401		282,872		269,664
	TOTAL DEPOSITS		235,772		235,553		230,935
	TOTAL SHAREHOLDERS' EQUITY		29,567		28,520		27,864
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KEY RATIOS
	Return on Equity (ROE)		12.27%		16.12%		17.48%
	Return on Assets (ROA)		1.28%		1.63%		1.81%

Contacts:

Siuslaw Financial Group
Johan Mehlum, 541-342-4000
Chairman of the Board and Chief Executive
[e-mail]