WHITEVILLE, N.C., Nov. 16 /PRNewswire-FirstCall/ -- Waccamaw Bankshares, Inc. (Nasdaq: WBNK) (the "Company"), the holding company for Waccamaw Bank (the "Bank"), today announced its third quarter and year to date financial results. Waccamaw reported net income of $331,038, or $.06 per diluted earnings per share for the three months ended September 30, 2009 versus a net loss of ($916,439), or ($0.17) per diluted share for the third quarter of 2008. For the nine months of 2009, the Company reported a net loss of ($1,714,198), or ($0.31) per diluted share as opposed to net income of $63,572, or $0.01 per diluted share, for the nine month period ended September 30, 2008.

Jim Graham, President and Chief Executive Officer, stated, "While we are pleased to report a profit for the quarter, it is obvious that our financial performance continues to be affected by the significant economic downturn our Nation is experiencing. It is important to note that our expense for provisional loan losses was $4,223,000 greater during the first nine months of 2009 as we aggressively positioned the bank during this time of economic stress. Further, the bank has increased its non-interest income by $1,566,414 during the first nine months of 2009 while we have also achieved cost efficiencies through disciplined management of our expense base. We see signs that our market area is in the process of stabilization, and we feel that the bank is in a position to take advantage of this significant opportunity within our market as a result of the changes in the competitive composition in the environment."

During the third quarter, the Bank increased its reserve for provisional loan losses by $1,230,048 of loans which compares with the provision of third quarter of 2008 of 528,084 with a total loan loss reserve equal to 2.58% of net loans as compared with 1.86% of net loans at December 31, 2008. In the first nine months of 2009, reports net charge-offs equaling $2,482,575.

Despite the economic conditions in the Waccamaw's market area, the Bank's capital levels increased with its total risked based capital ratio equaling 12.10% as of September 30, 2009, which places the Bank above the "well capitalized" rating assigned by Bank Regulators which requires a threshold of 10%.

"We continue to see early signs of positive improvement within our economy but recognize this economic downturn will not subside quickly. Waccamaw has been aggressive in building a strong reserve for provisional loan losses and has maintained solid capital ratios which demonstrate our financial strength to sustain the challenges of this economic period. Waccamaw has an excellent record of servicing the communities in which we conduct business and we are very proud of our abilities to continue to provide conservative management of our Bank's resources as we move forward," Graham commented.

Waccamaw Bankshares, Inc. Chairman Alan W. Thompson concluded, "We believe that Waccamaw continues to compare favorably to other financial institutions within our peer group and are optimistic that our financial performance will continue to be favorable over time. Waccamaw remains "well capitalized" and is in position to remain so as our Nation begins to move forward to a more healthy and stable economic environment. We are proud to serve the communities within our region and are forever grateful for their support"

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.
    Statements of Operations
    (Unaudited)

                                  Three Months and          Nine Months and
                                    Period Ended             Period Ended
                                  ----------------         -----------------
                                    September 30,            September 30,
                                  2009        2008         2009         2008
    Interest income               ----        ----         ----         ----
      Loans and fees on
       loans                 $5,488,874  $5,845,701  $15,977,468  $18,517,798

      Federal funds sold         11,895       9,334       13,914       18,469
      Investment securities,
       taxable                  968,742   1,438,765    3,286,867    4,232,671

      Investment securities,
       nontaxable               141,649     179,678      446,400      536,993
                                -------     -------      -------      -------

      Total interest income   6,611,160   7,473,478   19,724,649   23,305,931

    Interest expense
      Deposits                2,235,730   3,109,265    7,445,004   10,357,456
      Federal funds purchased
       and securities sold
       under agreements to
       repurchase               187,358     254,240      558,197      891,687

      Short-term borrowings      81,563      69,445      253,318      270,545
      Long-term borrowings      552,413     532,401    1,651,178    1,329,829
                                -------     -------    ---------    ---------
          Total interest
           expense            3,057,064   3,965,351    9,907,697   12,849,517
                              ---------   ---------    ---------   ----------

          Net interest
           income             3,554,096   3,508,127    9,816,952   10,456,414

    Provision for loan
     losses                   1,230,048     528,084    4,856,894      634,084
      Net interest income
       after provision
       for loan losses        2,324,048   2,980,043    4,960,058    9,822,330
                              ---------   ---------    ---------    ---------

    Non-interest income (loss)
      Service charges on
       deposit accounts         886,191     568,300    2,263,858    1,583,581
      Mortgage origination
       income                    91,576      91,887      294,983      260,564

      Income from financial
       services                  56,251      45,823      110,423      200,240

      Earnings on bank owned
       life insurance           195,787     145,824      547,060      406,038

      Net realized gains on
       sale or maturity
       of investment
       securities               483,758           -    1,354,435       40,446

      Impairment on investment
       securities               (10,000) (1,853,572)  (2,319,476)  (1,853,572)
      Other operating income    100,645     244,698      664,607      712,179
                                -------     -------      -------      -------

        Total non-interest
         income (loss)        1,804,208    (757,040)   2,915,890    1,349,476
                              ---------    --------    ---------    ---------


    Non-interest expense
      Salaries and employee
       benefits               1,736,058   2,050,830    5,441,093    6,176,312
      Occupancy expense         519,374     512,982    1,566,101    1,449,229

      Data processing           250,324     337,138      895,189      960,140

      Amortization expense
       of intangible assets      46,119      73,462      145,471      214,052

      Other expense           1,289,402     908,764    3,097,230    2,717,222
                              ---------     -------    ---------    ---------

        Total non-interest
         expense              3,841,277   3,883,176   11,145,084   11,517,025
                              ---------   ---------   ----------   ----------

        Income (loss) before
         income taxes           286,979  (1,660,173)  (3,269,136)    (345,219)


    Income tax expense
     (benefit)                  (44,059)   (743,734)  (1,554,938)    (408,791)
        Net income (loss)      $331,038   $(916,439) $(1,714,198)     $63,572
                               ========   =========  ===========      =======


    Basic income per share         $.06       $(.17)       $(.31)        $.01
    Diluted income per share       $.06       $(.17)       $(.31)        $.01
    Weighted average shares
     outstanding              5,540,833   5,523,549    5,529,540    5,480,047
    Diluted average shares
     outstanding              5,548,564   5,523,549    5,529,540    5,508,231



    Waccamaw Bankshares, Inc.
    Balance Sheets
                                                     (Unaudited)   (Audited)
                                                   September 30, December 31,
                                                          2009        2008
                                                          ----        ----
    Assets

    Cash and due from banks                          $7,481,102   $8,947,752
    Interest-bearing deposits with banks              5,113,077    2,684,741

    Federal funds sold                               20,890,000    4,281,000

    Investment securities, available-for-sale        86,303,949   87,402,799

    Restricted equity securities                      4,041,350    4,131,906

    Loans, net of allowance for loan losses of
     $9,562,301 in 2009, and $7,187,981 in 2008     360,824,683  378,882,889
    Other real estate owned                           5,453,713      956,832

    Property and equipment, net                      17,196,786   17,597,502

    Goodwill                                          2,727,152    2,727,152

    Intangible assets, net                              280,222      416,194

    Accrued income                                    2,053,028    2,448,477

    Bank owned life insurance                        18,381,823   17,834,763

    Other assets                                      7,263,235    9,138,427
                                                      ---------    ---------

          Total assets                             $538,010,120 $537,450,434
                                                   ============ ============

    Liabilities and Stockholders' Equity

    Liabilities
    Demand deposits                                 $38,515,011  $36,159,809
    Interest-bearing deposits                       386,263,156  382,420,080
                                                    -----------  -----------

          Total deposits                            424,778,167  418,579,889


    Securities sold under agreements to repurchase   23,139,000   23,830,000
    Other short-term borrowings                       6,500,000   10,000,000

    Long-term debt                                   40,000,000   42,500,000

    Junior subordinated debentures                   12,372,000   12,372,000

    Accrued interest payable                          1,077,885    1,328,976

    Other liabilities                                   229,063      995,414
                                                        -------      -------

          Total liabilities                         508,096,115  509,606,279
                                                    -----------  -----------

    Commitments and contingencies                             -            -

    Stockholders' equity
    Preferred stock, Series A, non-cumulative, non-voting,
     no par value; 1,000,000 shares authorized;
     7,311 and 28,184 issued and outstanding at
     September 30, 2009 and December 31, 2008,
     respectively                                       120,483      464,476

    Common stock, no par value; 25,000,000 shares
     authorized; 5,544,422 and 5,523,549 shares issued
     and outstanding at September 30, 2009 and
     December 31, 2008, respectively                 24,974,604   24,591,884

    Retained earnings                                 7,670,171    8,907,591

    Accumulated other comprehensive (loss)           (2,851,253)  (6,119,796)
                                                     ----------  ----------

          Total stockholders' equity                 29,914,005   27,844,155
                                                     ----------   ----------

          Total liabilities and stockholders'
           equity                                  $538,010,120 $537,450,434
                                                   ============ ============


    At period end:
          Book value per share                             5.40         5.04
           Market value per share                          3.14         5.01

           Tangible common equity to assets                4.98%        4.51%



    WACCAMAW BANKSHARES, INC.
    Selected Historical Information
    (Unaudited)
    As of and for the Quarter Ended

                     Sept. 30    June 30    March 31     Dec. 31    Sept. 30
                       2009       2009         2009       2008         2008
                       ----       ----         ----       ----         ----
    Allowance for
     Loan Losses:

    Balance at
     beginning of
     period       $10,484,950  $8,081,431  $7,187,981  $5,601,730  $5,246,439
                  -----------  ----------  ----------  ----------  ----------

    Provision for
     loan losses    1,230,048   2,639,196     987,650   2,356,012     528,084
      Charge-offs  (2,163,335)   (246,663)   (105,844)   (771,223)   (173,598)

     Recoveries        10,638      10,986      11,644       1,462         805
                       ------      ------      ------       -----         ---

     Net
      charge-offs  (2,152,697)   (235,677)    (94,200)   (769,761)   (172,793)
                   ----------    --------     -------    --------    --------

    Balance at
     the end of
     period        $9,562,301 $10,484,950  $8,081,431  $7,187,981  $5,601,730
                   ========== ===========  ==========  ==========  ==========


    ALLL/Gross loans     2.58%       2.76%       2.10%       1.86%       1.46%
    NCOs/Average loans    .67%        .09%        .02%        .32%        .11%

    Nonperforming
     Assets:

    Nonaccrual
     loans        $22,806,702 $26,010,130 $19,014,659 $15,633,308 $12,333,662

    Other real
     estate and
     repossessed
     personal
     property       5,455,313     739,368   1,057,570   1,451,040     725,237
    Loans past
     due 90 days
     or more and
     still accruing
     interest       2,435,826     748,185   1,868,829     963,513   2,564,858
                    ---------     -------   ---------     -------   ---------

        Total
         nonperforming
         assets   $30,697,841 $27,497,683 $21,941,058 $18,047,861 $15,623,757
                  =========== =========== =========== =========== ===========



    Nonperforming
     assets as a
     percentage of
     gross loans         8.29%       7.24%       5.71%       4.67%       4.08%

    Nonperforming
     assets as a
     percentage of
     total assets        5.71%       4.79%       3.92%       3.36%       2.91%

                                           

SOURCE Waccamaw Bankshares, Inc.

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http://www.waccamawbank.com