SUFB First Bankshares (MM)

SUFFOLK, Va., April 24 /PRNewswire-FirstCall/ -- Darrell G. Swanigan, President and CEO of SuffolkFirst Bank (NASDAQ:SUFB), a Virginia state-chartered bank headquartered in Suffolk, VA, commented, "Net income for quarter end March 31, 2008 compared to March 31, 2007 increased $87 thousand or 50%. Earnings per share for the same period were 11 cents and 8 cents respectively. Net income for the March 31, 2008 quarter represented an after tax gain of $174 thousand on the sale of securities. Declining interest rates continue to apply pressure on the net interest margin as specific sectors of the loan portfolio re-price quicker than rates paid on deposits and other funding sources. As a result, the Bank's net interest margin for the quarter ended March 31, 2008 declined .70% compared to March 31, 2007 net interest margin of 3.45%. Total assets grew 30% to end the March 31, 2008 quarter at $178.6 million. Loan growth continues to be strong and reached a new milestone in the bank's history. Net loans as of March 31, 2008 grew to $109.4 million and represented a 41% growth over March 31, 2007 loans of $77.5 million. Total deposits were equally strong and ended the quarter at $117 million and represented a 22% increase for the period March 31, 2007 to March 31, 2008. Net interest income after provisions for loan losses for the quarter ended March 31, 2008 increased 8.6% or $79 thousand compared to the same period ended March 31, 2007. We anticipate further rate reductions in the near term and believe, as rates decline, we will experience more pressure on net interest income. Non interest income for the quarter end March 31, 2008 increased $260 thousand or 198% compared to the same period March 31, 2007 which was primarily due to the gain on securities sales in the first quarter 2008. Time CD's have traditionally been the primary funding source to support loan growth, thus interest expense for the quarter end March 31, 2008 reflected an increase of 55% compared to the same three month period ending March 31, 2007. Non interest expense for the same period increased 20% or $166 thousand and was the result of additional salary, equipment and premises expense related to the opening of the main office facility in North Suffolk. The Allowance for Loan Loss on March 31, 2008 represented .90% of total loans or $999 thousand compared to $827 thousand as of March 31, 2007. Non performing loans as of March 31, 2008 totaled $867 thousand and represented 0.8% of total outstanding loans. Management estimates an approximate $50 thousand loss in non performing loans." Swanigan further commented, "We are pleased with our operating results for the quarter in view of the tension in the financial markets, and we are especially excited about our recent announcement to form First Bankshares, Inc., a one bank holding company. This new corporate structure will enable us to more efficiently manage our capital and to enhance our community-oriented philosophy as we explore other financial related opportunities." SuffolkFirst Bank operates three full service branches in Suffolk. Two in the central City of Suffolk, and a third full service facility and main office located at 3535 Bridge Road, Suffolk, VA. SuffolkFirst shares are traded on the NASDAQ stock exchange under the symbol SUFB. This press release contains forward-looking statements. Words such as "anticipates," "believes," "intends," "should," "expects," "will," variations of similar expressions are intended to identify forward-looking statements. These statements are management's beliefs as to the expected outcome 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, and degree of occurrence. Results and outcome may differ from what may be expressed or forecasted in forward-looking statements. Factors that could make a difference include, among others, changes in local and national economies, or market conditions; changes in interest rates; regulations and accounting principles; changes in policies or guidelines; loan demand and asset quality, including real estate values and collateral values; deposit flow; and the impact of competition from traditional or new sources. These and other issues that may emerge could affect decisions and results to differ materially from current expectations. SuffolkFirst Bank assumes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release. SuffolkFirst Bank Selected Financial Information (Unaudited) (in thousands, except for per share data) SuffolkFirst Bank Summary Balance Sheets (in thousands) Mar. 31, Mar. 31, 2007 2008 Increase/ %Increase/ (unaudited) (unaudited) (Decrease) (Decrease) Cash and due from banks $3,122 $5,089 $1,967 63.00% Securities available-for-sale, at fair value 51,154 53,834 2,680 5.24% Loans, net 77,483 109,432 31,949 41.23% Other assets 5,647 10,239 4,592 81.32% Total assets $137,406 $178,594 41,188 29.98% Deposits Demand $19,372 $22,375 3,003 15.50% Savings 2,355 2,403 48 2.04% Time 74,128 92,286 18,158 24.50% Total deposits 95,855 117,064 21,209 22.13% Federal funds purchased and borrowed funds 24,399 43,279 18,880 77.38% Other liabilities 1,145 1,511 366 31.97% Total liabilities 121,399 161,854 40,455 33.32% Total stockholders' equity 16,007 16,740 733 4.58% Total liabilities and stockholders' equity $137,406 $178,594 41,188 29.98% Summary Statements of Income (in thousands except for per share data) Quarter Ended Mar. 31, Mar. 31, 2007 2008 Increase/ %Increase/ (unaudited) (unaudited) (Decrease) (Decrease) Interest income $1,838 $2,483 $645 35.09% Interest expense 921 1,427 506 54.94% Net interest income 917 1,056 139 15.16% Provision for loan losses - 60 60 - Net interest income after provision for loan losses 917 996 79 8.62% Non interest income 131 391 260 198.47% Non interest expense 828 994 166 20.05% Net income before income tax 220 393 173 78.64% Income tax expense 47 133 86 182.98% Net income $173 $260 $87 50.29% Income per share, basic $0.08 $0.11 $0.03 37.50% Key Ratios Mar. 31, Mar. 31, Increase/ %Increase/ 2007 2008 (Decrease) (Decrease) Return on average assets 0.51% 0.58% 0.07% 13.73% Return on average equity 4.33% 6.18% 1.85% 42.73% Net interest margin 3.45% 2.75% (0.70%) (20.29%) Average earning assets/ total average assets 93.52% 93.28% (0.24%) (0.26%) Average loans/average deposits 80.50% 93.71% 13.21% 16.41% Allowance for loan losses/ period end loans 1.05% 0.90% (0.15%) (14.29%) Period end shareholders' equity/period end assets 11.64% 9.37% (2.27%) (19.50%) Total risk-based capital ratio 19.85% 14.91% (4.94%) (24.89%) Efficiency ratio 82.00% 80.00% (2.00%) (2.44%) DATASOURCE: SuffolkFirst Bank CONTACT: Darrell G. Swanigan, President and CEO, or Robert E. Clary, Chief Financial Officer, +1-757-934-8200, both of SuffolkFirst Bank

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