WHITEVILLE, N.C., Aug. 19 /PRNewswire-FirstCall/ -- Waccamaw Bankshares, Inc. (Nasdaq Global: WBNK) (the "Company"), the holding company for Waccamaw Bank (the "Bank"), has announced its second quarter and year to date financial results.
Jim Graham, President and Chief Executive Officer, stated, "During the second quarter our financial performance continued to be affected by the long and deep economic downturn our nation has experienced. Waccamaw has not participated in the Government's Troubled Asset Relief Program (TARP) and has maintained strong capital levels without becoming indebted to the United States Treasury. Our Company's capital levels are strong and well in excess of those required to maintain the highest capital rating assigned by bank regulators as "well capitalized" with the total capital risk based asset ratio of 11.45% which compares favorably to the 10% threshold to be rated in this category. In fact, the Bank's regulatory capital ratios have improved during the year as a result of restructuring the Bank's balance sheet despite the weak operating environment and increasing the Bank's provisional reserve for loan losses by 94%.
The Company reported a net loss of $2,119,491, or $(.38) per diluted share for the three months ended June 30, 2009 versus net income of $469,668, or $0.09 per diluted share for the second quarter of 2008. For the first six months of 2009, the Company reports a loss of $2,255,030, or $0.41 per diluted share. Significant items which created the change in year to year profitability were an increase in expense for provisional loan losses, reduction in net interest margin, an increase in FDIC insurance premiums and Other Than Temporarily Impairment (OTTI) of securities. During the first half of 2009 FDIC insurance premiums increased by $288,000 as a result of a one time surcharge placed upon the banking industry and the Company's expense for provisional loan losses was $2,297,000 during the first six months of the year.
Waccamaw continues to operate in a difficult economic environment with unemployment rising throughout the Company's footprint, and a decline in real estate values. In addition, the Company has taken an aggressive position to build its loan loss reserve for provisional loan losses which dampens current earnings, but provides a strong reserve in the event of higher future loan losses. For the first six months of 2009, Waccamaw increased its loan loss reserve by $2,639,196 versus actual losses of $352,508. Despite the economic issues our Nation faces, Waccamaw remains financially sound and continues to bring in a rewarding number of new customers to the Bank by offering high quality service and innovative products. During the year, the Bank has successfully grown its deposit base in every market it serves in North and South Carolina while building a more advantageous deposit mix.
"We have seen some positive factors in the area economy over the last quarter and it now appears that the lengthy recession is showing signs of subsiding. It is important to note that Waccamaw Bank remains financially strong with capital ratios that reflect a position of strength and a strong loan loss reserve. With the significant deposit growth experienced, the Bank has increased the level of liquidity it carries to an all time high level and has created a more favorable deposit composition while doing so. Our Bank has a strong record of excellent service to the communities we serve and we are forever mindful of the trust and confidence our communities place with our Bank. We will continue to provide conservative management of our Bank's resources as we position our Bank to take advantage of competitive opportunities as the economic environment improves. I applaud and thank our hard working employees at Waccamaw for the many wonderful contributions they make both to our Bank and to our communities. We have an exceptional team of dedicated and loyal employees," Graham commented.
Waccamaw Bankshares, Inc. Chairman Alan W. Thompson concluded, "While we are all too well aware of the difficulties experienced within the markets we serve, we remain quite confident that the Bank will return to the level of profitability it has become known for. We believe that, when compared to the financial performance of other financial institutions in our area, the results are quite favorable and will continue to be over time. Waccamaw is well capitalized and will remain so despite the negative economic environment we are now experiencing. We appreciate the communities that have supported us from our beginning and are thankful for the strong relationship we have built over the last twelve years."
Waccamaw Bankshares, Inc. has recently filed required documents with the Securities and Exchange Commission in order to offer Series B Preferred Stock. This offering is intended to allow the Bank to take advantage of strategic opportunities, to provide for growth and additional strength to the Company's balance sheet. More information on this offering is available by contacting the Bank at 910-641-0044 or by email at waccamaw@waccamawbank.com.
Waccamaw Bank, the primary subsidiary of Waccamaw Bankshares, Inc., is a state chartered bank operating seventeen offices in Whiteville, Wilmington, Shallotte (2), Sunset Beach, Oak Island, Holden Beach, Chadbourn, Tabor City, Southport (2) and Elizabethtown, North Carolina. Offices in South Carolina include Little River, Conway (2), Myrtle Beach, and Heath Springs. In addition to primary banking operations, the Bank's Investment Group provides consumer investment and insurance services. Common stock of Waccamaw Bankshares, Inc. is listed on the NASDAQ Global Market and trades under the symbol WBNK. Additional corporate information, product descriptions, and online services can be located on the Bank's website at http://www.waccamawbank.com/.
Information in the press release contains "forward-looking statements." These statements involve risks and uncertainties that could cause actual results to differ materially, including without limitation, the effects of future economic conditions, governmental fiscal and monetary policies, legislative and regulatory changes, the risks of changes in interest rates and the effects of competition. Additional factors that could cause actual results to differ materially are discussed in Waccamaw Bankshares, Inc.'s recent filings with the Securities Exchange Commission, including but not limited to its Annual Report on Form 10-K and its other periodic reports.
Waccamaw Bankshares, Inc.
CONTACT: Jim Graham, President and CEO, Waccamaw Bankshares, Inc.,
+1-910-641-0044
Web Site: http://www.waccamawbank.com/
