MONROEVILLE, Pa., Jan. 23 /PRNewswire-FirstCall/ -- Parkvale Financial Corporation (Nasdaq: PVSA) reported net income for the quarter ended December 31, 2008 of $2.1 million or $0.37 per diluted share compared to net income of $3.6 million or $0.64 per diluted share for the quarter ended December 31, 2007. The $1.5 million decrease in net income for the December 2008 quarter reflects a $1.1 million writedown of equity securities and a $1.8 million increase in the provision for loan losses, partially offset by a $749,000 decrease in income tax expense and an increase of $818,000 in net interest income. On an operating basis, excluding the security writedowns, net income for the December 2008 quarter would have been $2.8 million or $0.50 per share. Net interest income increased to $10.6 million from $9.8 million for the prior period. The higher loan loss provision relates to a higher level of classified assets, as the ratio of non-performing loans and real estate owned to total assets increased to 1.10% up from 0.85% at June 30, 2008. Return on average equity was 5.68% for the December 2008 quarter compared to 11.01% for the December 2007 quarter.

For the six month period ended December 31, 2008, net income was $3.2 million or $0.57 per diluted share compared to net income of $7.2 million or $1.29 per diluted share for the six-month period ended December 31, 2007. The $4.0 million decrease in net income for the December 2008 six months reflects $5.0 million of writedowns of equity and debt securities and a $2.2 million increase in the provision for loan losses, partially offset by an increase in net interest income of $1.8 million and a decrease in income tax expense of $1.4 million. On an operating basis, excluding the security writedowns, net income for the December 2008 six month period would have been $6.4 million or $1.16 per share. Net interest income for the six months ended December 31, 2008 increased to $21.5 million from $19.7 million for the six months ended December 31, 2007. Return on average equity was 4.52% for the six months ended December 2008 compared to 11.14% for the six months ended December 2007.

(Condensed Consolidated Statement of Operations and selected financial data is attached.)


                        PARKVALE FINANCIAL CORPORATION
                CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
              (Dollar amounts in thousands, except per share data)
                                  (Unaudited)

                                            Three months
                                               ended       Six months ended
                                             December 31,     December 31,
                                            2008     2007    2008     2007
                                            ----     ----    ----     ----

    Total interest income                $23,135  $24,976 $46,955  $49,790
    Total interest expense                12,513   15,172  25,436   30,077
                                          ------   ------  ------   ------
      Net interest income                 10,622    9,804  21,519   19,713
    Provision for loan losses              2,129      288   3,156      991
                                           -----      ---   -----      ---
      Net interest income after
       Provision for losses                8,493    9,516  18,363   18,722

    Net gain on sale and (writedown) of
     securities                           (1,060)       -  (4,982)       -
    Other noninterest income               2,613    2,921   5,353    5,668
    Total noninterest expense              7,151    7,288  14,247   14,498
                                           -----    -----  ------   ------

    Income before income taxes             2,895    5,149   4,487    9,892
    Income tax expense                       830    1,579   1,317    2,673
                                             ---    -----   -----    -----

    Net income                            $2,065   $3,570  $3,170   $7,219
                                          ======   ======  ======   ======

    Basic earnings per common share        $0.37    $0.65   $0.57    $1.30
    Diluted earnings per common share      $0.37    $0.64   $0.57    $1.29
    Dividends per common share             $0.22    $0.22   $0.44    $0.44



                             SELECTED FINANCIAL DATA
               (Dollar amounts in thousands, except per share data)

                                             Dec. 31,    June 30,    Dec. 31,
                                                2008        2008        2007
                                                ----        ----        ----

    Total assets                          $1,890,250  $1,851,392  $1,828,508
    Total deposits                         1,481,785   1,493,685   1,458,688
    Total loans, net                       1,163,968   1,201,665   1,207,837
    Loan loss allowance                       15,897      15,249      14,819
    Non-performing loans and foreclosed
     real estate                              20,780      15,808       9,357
      Ratio to total assets                     1.10%       0.85%       0.51%
    Allowance for loan losses as a % of
     gross loans                                1.35%       1.25%       1.21%
    Total shareholders' equity              $163,264    $131,631    $128,080
    Book value per common share               $24.23      $23.58      $23.46



                            OTHER SELECTED DATA


                                             Three months    Six months
                                                 ended         ended
                                             December 31,   December 31,
                                             2008   2007    2008   2007
                                             ----   ----    ----   ----

    Average yield earned on all interest-
     earning assets                          5.38%  5.79%   5.43%  5.77%
    Average rate paid on all interest-
     earning liabilities                     3.00%  3.58%   3.04%  3.56%
    Average interest rate spread             2.38%  2.21%   2.39%  2.21%
    Net yield on average interest earning
     assets                                  2.47%  2.27%   2.49%  2.29%
    Return on average assets                 0.45%  0.78%   0.34%  0.79%
    Return on average equity                 5.68% 11.01%   4.52% 11.14%
    Other expense to average assets          1.56%  1.59%   1.55%  1.58%

SOURCE Parkvale Financial Corporation