Record Annual Earnings Announced By the little bank

KINSTON, N.C.--(BUSINESS WIRE)--the little bank, (OTCBB:LTLB) (the “Company”) is pleased to report record annual net income in fiscal year 2012. Unaudited net income for the year ended December 31, 2012, was $2,468,000, or 87 cents per basic share, up from $2,257,000, or 84 cents per basic share, in the prior year. The Company reported higher annual net income for the third straight year. The record earnings result was driven by improvement in revenues and a decreased loan-loss provision, reflecting further improvements in the Company’s credit quality.

“We can continue to pursue loan growth with confidence because of our process, and that benefits our shareholders and our customers alike.”

For the quarter ended December 31, 2012, unaudited net income was $554,000, or 20 cents per basic share. This compares favorably to the $545,000, or 20 cents per basic share, reported in the quarter ended December 31, 2011.

Total assets as of December 31, 2012 were $306.0 million, compared to total assets of $312.4 million as of December 31, 2011. Total loans, net of reserves, were $210.7 million, representing a 6.9% year-over-year increase.

“We’re pleased to set a new record for earnings at the little bank,” said Vincent R. Jones, President and CEO of the little bank. “We look forward to 2013 with cautious optimism and are prepared to respond to opportunities for quality growth within our markets.”

The Company has consistently produced quarterly earnings and paid a common stock cash dividend throughout the down economic cycle. Due to this core franchise strength, the little bank had the opportunity in the fourth quarter to retire a significant portion of the preferred stock it issued to the U.S. Treasury in December 2008. The lower resulting preferred dividend will be accretive to earnings per share beginning with the first quarter of 2013.

ASSET QUALITY

In 2012, the little bank recorded a loan-loss provision of $815,000, 32% lower than during the same period in 2011. The allowance for loan losses grew to $4.0 million at December 31, 2012, or 1.90% of gross loans as of the same date. “Sound underwriting and aggressive credit management contributed to our results,” Jones said. “We can continue to pursue loan growth with confidence because of our process, and that benefits our shareholders and our customers alike.”

The Company has consistently reported superior credit quality metrics compared to its peers during the past several years. According to data compiled by SNL Financial LC, the little bank has had lower quarterly nonperforming assets/total assets ratios than the median for all North Carolina-chartered commercial banks and savings banks in each period since credit quality began to deteriorate broadly in the fourth quarter of 2007. The lower this ratio is, the fewer credit problems a bank has on its balance sheet.

Nonperforming assets were just 0.60% of total assets as of year-end 2012, marking the lowest quarter-end nonperforming assets/total assets ratio for the Company since 2008 and the sixth straight quarter with a nonperforming assets/total assets ratio of less than 1.00%.

CAPITAL

Capital remains strong, despite the previously announced retirement of a portion of the Company’s senior preferred stock. Total stockholders’ equity was $31.7 million at December 31, 2012, or 10.4% of total assets. The Company will remain “Well Capitalized” for regulatory capital purposes, even if it decides to retire the remainder of its senior preferred stock.

The little bank is headquartered in Kinston, North Carolina and currently serves the Lenoir, Wayne, Onslow, Pitt, and Craven county markets. The Bank prides itself on the special care with which it serves its customers. The Bank’s website is www.thelittlebank.com. The little bank stock can be found on the Over-the-Counter Electronic Bulletin Board trading under the symbol LTLB. This press release includes certain forward-looking statements in reliance on the “safe-harbor” provisions of The Private Securities Litigation Reform Act of 1995. Any such forward-looking statements are subject to a number of risks and uncertainties. Actual results may differ materially from those anticipated in any such forward-looking statements. The Company undertakes no obligation to update or revise any such forward-looking statements.

the little bank
Summary of Operations (un-audited)
(000’s omitted except per share data)
	Three Months			Three Months			Twelve Months			Twelve Months
	Ended			Ended			Ended			Ended
	December 31, 2012			December 31, 2011			December 31, 2012			December 31, 2011 *
Interest Income	$	3,117		$	3,265		$	12,628		$	13,214
Interest Expense		476			646			2,129			2,785
Net interest income		2,641			2,619			10,499			10,429
Provision for loan losses		175			350			815			1,200
Net interest income after
Provision for losses		2,466			2,269			9,684			9,229
Non-interest income		403			371			1,490			1,324
Non-interest expense		2,001			1,807			7,355			7,047
Income before taxes		868			833			3,819			3,506
Income taxes		314			288			1,351			1,249
Net Income		554			545			2,468			2,257
Preferred Stock Dividends		(92	)		(102	)		(398	)		(409	)
Accretion of Discount, net		(9	)		(19	)		(69	)	(74)
Net Income available for common shareholders	$	453		$	424		$	2,001		$	1,774
Net Income available per basic common share	$	0.16		$	0.16		$	0.71		$	0.66

the little bank
Balance Sheets
(000’s omitted except per share data)
	December 31,			September 30,			December 31,
	2012			2012			2011 *
	(un-audited)			(un-audited)
Assets
Cash and due from banks	$	6,266		$	5,973		$	3,522
Overnight investments		6,161			13,432			13,752
Investment securities AFS		69,820			76,290			85,003
Loans		214,728			207,079			200,874
Less Allowance for loan losses		(4,073	)		(4,040	)		(3,898	)
Net Loans		210,655			203,039			196,976
Other Assets		13,131			13,486			13,156
Total Assets	$	306,033		$	312,220		$	312,409
Liabilities & Stockholders' Equity
Liabilities
Deposits	$	250,225		$	250,986		$	251,723
FHLB Advances		23,500			23,000			25,000
Other liabilities		582			1,535			700
Total liabilities		274,307			275,521			277,423
Stockholders' Equity
Preferred stock, Series A & B	$	2,763		$	7,769		$	7,710
Common stock, no par value		25,573			24,409			24,395
Retained earnings		2,658			3,574			2,211
Accumulated other comprehensive income		732			947			670
Total stockholders' equity	$	31,726		$	36,699		$	34,986
Total liabilities and stockholders' equity	$	306,033		$	312,220		$	312,409

* Derived from audited financial statements