Only three of the seven banks doing business in Polk County and Landrum remained profitable in the third quarter of 2009.

Losses for the parent companies of Carolina First and Mountain 1st banks grew substantially from the second quarter. In addition, Macon Bank and Bank of America, which had shown income previously, slipped into the loss column in the third quarter.

The South Financial Group, parent of Carolina First, saw its losses reach $340.8 million in just the period July through September. The third quarter report was preliminary only as the bank was reevaluating the goodwill of its Carolina operations.

1st Financial Services Corp., the parent of Mountain 1st, saw its losses rise from $1.5 million in the second quarter to $7.8 million in the second quarter, ended Sept. 30. In October, Mountain 1st chief executive officer Greg Gibson resigned and the banks planned merger with AB&T Financial Corp. of Gastonia was terminated by AB&T.

Tryon Federal Bank, First Citizens and Wells Fargo continued to operate safely in the black.

Working with the Federal Deposit Insurance Corp. (FDIC), First Citizens acquired two west coast banks at favorable prices and terms, resulting in a $63.9 million after-tax gain. Wells Fargo continued a year of record earnings.

A quick look at the operating results for each bank, arranged in order of smallest to largest, follows.

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Mountain 1st Bank

1st Financial Services Corp., parent company of Mountain 1st Bank & Trust Co., reported a net loss of $7.8 million for the third quarter 2009, bringing the net loss for the year to $8.9 million. This compares to a net income for the first nine months of 2008 of $1.8 million.

In a letter to stockholders, 1st Financial president Vincent Rees said the bank has suspended branch expansions, frozen bonuses and implemented other measures to reduce costs.

The banks founding chief executive officer, Greg Gibson, resigned at the end of October, and a new chief risk officer was hired and several loan officers were changed, Rees said.

1st Financial also reported in October that AB&T Financial Corp. had chosen to terminate its merger plans with 1st Financial because required regulatory approvals had not been obtained by Sept. 30, the date after which either party could terminate.

In the banks press release, Rees said, The banks third quarter results are primarily due to the banks proactive stance on increasing the banks loan loss reserve to $18 million.

This increase came about primarily due to the lower valuation of property resulting from the current recession, he said, which impacted the quality of loan collateral in our portfolio.

We are cautiously optimistic and hopeful that real estate conditions and the general economic climate will continue to recover for the remainder of this year and next, the chairman said.

However, Rees said, Mountain 1st is not suffering from the other pressures facing most community banks. Mountain 1st remains well capitalized, he said, has actually improved its net interest margin to 3.4 percent, and the banks liquidity remains exceptionally strong.

1st Financial stock was selling for $2.20 last week, up from its 52-week low of $1.77 on Nov. 6, 2009 and down from its high of $7.50 reached on Jan. 2, 2009.

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Macon Bank

Macon Bank reported a third quarter loss of $886,000, after compiling a net income in the first two quarters of $1.5 million.

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Carolina First

The South Financial Group (TSFG), parent company of Carolina First, reported a preliminary third quarter 2009 net loss of $340.8 million. TSFG reported $134.4 million in losses in 2008, and with preliminary third quarter results this year has reported losses of $543.1 million so far in 2009.

As of October, the bank was waiting for final quarterly results pending a goodwill impairment analysis of its Carolina First operations.

During 2008, TSFG recorded impairment charges related to its Mercantile banking segment (comprised of TSFGs Florida banking operations); however, no impairment was indicated for its Carolina First banking segment (comprised of the companys South Carolina and North Carolina banking operations) based on evaluations through June 30, 2009, the bank announced. However, as TSFG, including its Carolina First banking segment, has continued to report additional losses and other conditions have changed during the third quarter, TSFG is performing an updated evaluation of the goodwill related to the Carolina First banking segment.

TSFG stock was selling for 55 cents last Friday, very near its 52-week low of 53 cents. Its 52-week high of $4.75 was reached last December.

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Tryon Federal Bank

HomeTrust Bank, parent company of Tryon Federal Bank, reported third quarter 2009 net income of $900,000, bringing total income for the year to $2.13 million.

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First Citizens Bank

First Citizens Bancshares Inc., parent company of First Citizens Bank, earned $82.5 million for the quarter ending Sept. 30, 2009. That included after-tax gains of $63.9 million related to FDIC-assisted acquisitions of two banks, one in California and another in Washington. As part of the purchase, the Federal Deposit Insurance Corp. (FDIC) agreed to a loss-sharing arrangement with First Citizens for the acquired banks loans and foreclosed properties. That agreement provides further protection to First Citizens, the bank said.

The (after-tax) gains resulted from the excess of the fair value of th recorded assets over the fair value of the liabilities assumed, according to Frank B. Holding Jr., chairman of the First Citizens board.

First Citizens stock was at $156 last Friday, down from its 52-week high of $167 and up from its 52-week low of $73.

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Wells Fargo

Wells Fargo, parent company of Wachovia Bank, continued its record earnings, showing net income of $3.24 billion in the third quarter of 2009, up 98 percent from the same period last year. In the first nine months of 2009, Wells Fargo reported $9.45 billion in net income, up 75 percent from last year, even after building credit reserves by $3 billion.

Wells Fargo reported that 13,000 of its employees are working to help people stay in their homes, and that the bank has completed 355,000 home loan modifications, and offered some payment relief to 1.3 million customers. Checking and savings deposits are up 11 percent.

Current projections show credit losses peaking in 2010, with consumer losses potentially peaking in the first half of the year and gradually declining, absent further economic deterioration, the company stated in its 3rd quarter press release.

Wells Fargo stock reached its 52-week high a year ago in December, 2009 at $32.76 a share, but had fallen to $7.80 by March of this year. However, it was back up to $26.81 as of last week.

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Bank of America

Bank of America reported a third quarter 2009 net loss of $1 billion, down from a net income of $1.2 million in the same quarter last year. Through the first nine months of this year, the company had a net income of $6.5 billion, up from $5.8 billion during the same period last year.

The bulk of the third quarter losses were in Bank of Americas mortgage and credit card businesses.

BoA stock was around $16.10 last Friday, down only slightly from its 52-week high of $19.10 and greatly recovered from its 52-week low of $2.53.