the little bank (OTCBB: LTLB) reports annual earnings and fourth quarter earnings.

The little bank (the ?Bank?), today announced unaudited net income for the year ended December 31, 2010 of $1,710,000 or $.67 per basic share compared to audited net income of $1,360,000 or $.56 per basic share for the year ended December 31, 2009. After adjusting for dividends and the accretion of discount on preferred stock under the Capital Purchase Program, net income available to common shareholders was $1,232,000, or $.48 per basic share for the year ended December 31, 2010, compared to $929,000 or $.38 per basic share for the prior year. Net interest income before the provision for loan losses increased $1.3 million, or 15.3% during 2010 compared to the prior year. The provision for loan losses was increased $325,000, or 25% to $1,600,000 during 2010, compared to a provision of $1,275,000 during the prior year.

Unaudited net income for the quarter ended December 31, 2010 was $525,000 or $.20 per basic share compared to $388,000 or $.16 per basic share for the quarter ended December 31, 2009. After adjusting for dividends and the accretion of discount on preferred stock, net income available for common shareholders for the fourth quarter ended December 31, 2010 was $405,000 or $.16 per basic share, compared to $220,000 or $.09 per basic share for the quarter ended December 31, 2009.

Total assets as of December 31, 2010 were $299.4 million, compared to total assets of $303.6 million as of December 31, 2009. Total loans, net of reserves, were $199.2 million and deposits were $238.3 million, representing decreases of 11.7% and 3.8%, respectively, over the December 31, 2009 levels. Nonperforming assets, which include nonaccrual loans and other real estate owned, have increased from $3.1 million at December 31, 2009 to $3.6 million at December 31, 2010. Currently, 2,562,086 shares of common stock are issued and outstanding.

Rob Jones, President and Chief Executive Officer stated, ?Given continued struggles in the economy, we are pleased with the performance of our Bank for the fourth quarter and all of 2010. While loan demand remains weak, we are seeing signs of improvement as measured by pending loan requests. Also, loan quality seems to be stabilizing as the number of new past due loans are decreasing. We expect future net charge offs to be well controlled but elevated over the next 18 months.? Mr. Jones further remarked, ?We continue to focus on growing our customer base through local marketing efforts as well as looking for opportunities to grow through branch purchases, whole bank acquisitions, and acquisitions in FDIC assisted transactions of failed banks.

Executive Committee Chairman Felix Harvey added, ?I am proud of our Bank management team and how they have navigated through the recession thus far as evidenced by the Bank's consistent positive earnings. While I credit much of this success to our team, I also want to recognize the markets in which we operate. Although no one has been immune to the hard pinch of this economy, our markets have held up better than most. We are fortunate to be a part of Eastern North Carolina.? Jones further commented, ?I am also proud that 2010 represents the 6th consecutive year that the Bank has paid a cash dividend to its shareholders.?

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,

2010

December 31,

2009

December 31,

2010

December 31,

2009

 
Interest Income $ 3,251 $ 3,524

$

13,323

$ 14,355
 
Interest Expense   729     1,087    

3,327

     5,663  
 
Net interest income 2,522 2,437

9,996

8,692
 
Provision for loan losses   350     430     1,600     1,275  
 
Net interest income after
Provision for losses   2,172     2,007     8,396     7,417  
 
Non-interest income 368 355 1,335 1,446
 
Non-interest expense   1,713     1,739     7,059     6,753  
 
Income before taxes 827 623 2,672 2,110
 
Income taxes   302     235     962     750  
 
Net Income 525 388 1,710 1,360
Preferred Stock Dividends (102 ) (102 ) (408 ) (366 )
Accretion of Discount, net   (18)   (65)   (70)

(65)  

 
Net Income available

for common shareholders

$ 405   $ 221   $ 1,232   $ 929  
Net Income available

per basic common share

$ 0.16   $ 0.09   $ 0.48   $ 0.38  
 

the little bank

Balance Sheets

(000's omitted except per share data)

   
December 31, September 30, December 31,
2010 2010 2009 *
(un-audited) (un-audited)
Assets
 
Cash and due from banks $ 2,811 $ 4,228 $ 4,313
Overnight investments 5,935 13,616 12,512
Investment securities AFS 77,624 57,178 48,235
 
Loans 203,017 205,213 229,401
Less Allowance for loan losses   (3,834)   (4,291)   (3,929)
Net Loans 199,183 200,922 225,472
 
Other Assets   13,864     12,634     13,007  
Total Assets $ 299,417   $ 288,578   $ 303,539  
 
 
Liabilities & Stockholders' Equity
 
Liabilities
Deposits $ 238,310 $ 232,215 $ 247,706
FHLB Advances 28,000 23,000 23,000
Other liabilities   578     472     892  
Total liabilities 266,888 255,687 271,598
 
Stockholders' Equity
Preferred stock, Series A & B $ 7,635 $ 7,617 $ 7,565
Common stock, no par value 23,189 20,198 21,868
Retained earnings 1,993 4,754 2,404
Accumulated other comprehensive income   (288)   322     104  
Total stockholders' equity$32,529   $32,891   $31,941  
 
Total liabilities and stockholders' equity $ 299,417   $ 288,578   $ 303,539  

* Derived from audited financial statements

the little bank
Doyle M. Thigpen, Chief Financial Officer
252-317-2804