Mountain 1st Bank & Trust

Mountain 1st Bank & Trust&squo;s parent company, 1st Financial Services Corp., was profitable last year, reporting net income of $207,000 for the full year ending Dec. 31, 2008, but much less profitable than 2007, when the bank reported net income of $3.5 million, and 2006, when net income was $2.8 million.

Greg Gibson, chief executive officer, said the reduction in net income was primarily due to $4.3 million in credit losses in the fourth quarter of 2008.

&dquo;The majority of these losses were centered in a few credits, the largest of which was a well established real estate agency, in business in Western North Carolina for more than 25 years,&dquo; Gibson said.

Gibson also pointed to historically low levels of interest rates, which pushed down the bank&squo;s earning capacity by as much as $5 million for the year. However, he said the bank should be able to improve its net interest income in 2009 by lowering the interest rates it pays out on its certificates of deposit, bringing those rates more into line with current short term interest rates.

&dquo;In retrospect, 2008 was arguably the most challenging year for the banking industry in more than 50 years,&dquo; Gibson said.

During the past year, Mountain 1st&squo;s assets increased by $100.6 million to a total of $707 million. The bank&squo;s loans and deposits increased by about $62 million each to $584 million and $591 million respectively at Dec. 31, 2008.

Alliance Bank & Trust of Gastonia, N.C., which merged with Mountain 1st in February, showed a net loss for the fourth quarter of 2008 of $176,000. Alliance, which opened in 2004, has approximately $170 million in assets.

Macon Bank

Macon Bank Inc. reported net income of $7 million for fourth quarter of 2008 on its Federal Deposit Insurance Corporation (FDIC) &dquo;call sheet,&dquo; a drop of $4.5 million from the fourth quarter of 2007, when net income totaled $11.5 million. Over the full year 2008, Macon Bank reported net income of $19.5 million.

Macon Bank increased its provision for loan losses by $6.2 million in the fourth quarter, ending the year with a $13.1 million provision for losses. Loans actually charged off in the fourth quarter totaled $2.7 million.

Macon Bank&squo;s non-accrual loans, those overdue loans for which the bank is no longer accruing interest, the loans considered most likely to go bad, totaled $7.4 million for residential construction and $24.7 million for other construction and land development.

Macon Bank, Inc. is a North Carolina-chartered, locally owned and operated financial institution headquartered in Franklin, N.C. The bank, which operates eleven offices in Western North Carolina, opened its branch in Columbus in September 2008. On&bsp; Dec. 31, 2008, the bank reported $1.1 billion in assets.

Tryon Federal Bank

HomeTrust Banking Partnership, the parent company of Tryon Federal Bank, has not issued a public statement of its year end results. However, the bank, in its quarterly Consolidated Statement of Operations filings with the Office of Thrift Supervision reported net income for the fourth quarter of $1.5 million, and&bsp; net income of $2.5 million for each of the previous three quarters, for a total net income of $9.2 million for the year.

HomeTrust is a mutually owned bank with an 81-year history in Western North Carolina. HomeTrust Bank, along with Tryon Federal Bank, Shelby Savings Bank, Home Savings Bank and Rutherford County Bank, comprise the HomeTrust Banking Partnership.

Together, the HomeTrust Banking Partnership has assets of over $1.5 billion and is the largest mutual bank headquartered in North Carolina and the 2nd largest in the Southeast.

Carolina First

The South Financial Group (TSFG), parent company of Carolina First Bank, reported operating losses of $134.4 million for 2008. Including a non-cash accounting charge of $426 million reflecting lower valuations of its Florida franchise, net losses for the year were $568.6 million.

The loss, according to chief executive officer H. Lynn Harton was mostly attributable to &dquo;housing related loans&dquo; gone bad in Florida.

TSFG&squo;s allowance for further credit losses is currently $250 million.

TSFG, which has total assets of $13.6 billion, showed at Dec. 31, 2008 nonperforming assets of $421.2 million, or 4.1 percent of loans and foreclosed property. This is up from $293 million at Sept. 30, 2008. TSFG is headquartered in Greenville, S.C.

First Citizens Bank

First Citizens BancShares Inc., parent company of First Citizens Bank, reported net income of $91.1 million for 2008, down only slightly from 2007 net income of $108.6 million.

Net interest income for the bank increased $19.4 million in 2008. &dquo;The impact of a $618.6 million increase in average interest-earning assets more than offset the unfavorable impact of lower interest rates,&dquo; the bank reported. The bank&squo;s provision for credit losses increased $32.2 million during 2008, the result of higher net charge-offs and deterioration in the bank&squo;s residential construction loan portfolio. The bank charged off $45.3 million in bad loans in 2008, up from $28 million in 2007.

The bank&squo;s non-performing assets totaled $71.7 million as of Dec. 31, 2008, compared to $19.9 million a year earlier.

Headquartered in Raleigh, North Carolina, BancShares is the second largest family-controlled financial holding company in the United States and has consolidated assets of more than $16 billion.

Wachovia

Wachovia was a bank holding company headquartered in Charlotte which had total assets of $782.90 billion and deposits of $449.13 billion at Dec. 31 2007. It was acquired by Wells Fargo as of Dec. 31, 2008. Wells Fargo reported a fourth quarter loss for Wachovia of $11.2 billon, including $2.8 billion deferred tax asset write down, $4.2 billion credit reserve build and $4.3 billion of &dquo;market disruption losses.&dquo;

Wells Fargo on the other hand reported net income for 2008 of $2.84 billion, which it touted as &dquo;industry leading.&dquo; Wells Fargo says its had the highest net interest margin, 4.83 percent, the highest return on equity, return on assets and highest total shareholder return among large bank peers.

Bank of America

Bank of America reported a full-year profit of $4.01 billion and net income of $14.98 billion for the year ended Dec. 31, 2008. The company had a net loss of $1.79 billion in the fourth quarter, results which were driven by credit costs, additions to credit loss reserves and &dquo;significant write-downs and trading losses in the capital markets.&dquo;

Bank of America acquired Countrywide Financial on July 1, 2008, and Merrill Lynch on Jan. 1, 2009. The company reported Merrill Lynch lost $15.31 billion in the fourth quarter.

Bank of America increased its provision for further credit losses by $18.4 billion in 2008, to a total of $26.83 billion. Total managed losses were $22.9 billion during 2008, compared to $11.25 billion during the prior year.

Bank of America, headquartered in Charlotte, is one of the world&squo;s largest financial institutions. As of Dec 31 2007, the company had total assets of $1.72 trillion and total deposits of $805.18 billion. It serves more than 59 million customers through 6,100 retail banking outlets and operates 18,700 ATMs.