BEL AIR, Md., Nov. 14 /PRNewswire-FirstCall/ -- SFSB, Inc. (OTC:SFBI) (BULLETIN BOARD: SFBI) today announced that in connection with the preparation of its financial statements for the quarter ended September 30, 2008, the Company made a decision to take a non-cash pre-tax charge to earnings of $1,678,000, as a result of an other-than-temporary impairment (OTTI) in the value of the AMF Ultra Short Mortgage Fund it holds in its investment portfolio. This loss resulted in a net loss of $1,574,000 in the quarter ended September 30, 2008 as compared to net income of $27,000 for the quarter ended September 30, 2007. For the nine months ended September 30, 2008, net loss was $1,390,000 as compared to a net loss of $21,000 for the nine months ended September 30, 2007. President, Chairman and CEO, Phil Logan, stated: "We believe this impairment is related to the continuing uncertainty in spreads in the bond market for mortgage related securities. This uncertainty has negatively impacted the market value of the securities in the fund and thus the net asset value of the fund itself. While the majority of the underlying securities in the fund continue to carry investment grades and acceptable market yields, current accounting rules and related SEC guidance resulted in our determination that the impairment was other-than-temporary. Without the write-down of the AMF Ultra Short Mortgage Fund, SFSB, Inc. would have reported net income of $104,000 for the quarter ended September 30, 2008 and net income of $288,000 for the nine months ended September 30, 2008. "As you can see, we continue to improve earnings with regard to our operating results," said Logan. "The stability of our core banking operations and being well-capitalized, has enabled SFSB, Inc. to withstand the lower values recorded in our investment portfolio without having a material impact on the health of our Bank. In the current environment, our top priority is to maintain the strength of our balance sheet. We were successful in this regard during the third quarter as both loans and deposits increased over the prior period, while our capital levels remained healthy." As of September 30, 2008, SFSB, Inc. had risk weighted capital of 14.82%, while the OTS requires a 10% ratio to be considered "well capitalized". SFSB, Inc., headquartered in Bel Air, Maryland is the holding company of Slavie Federal Savings Bank. The bank is a 108 year old federally chartered, FDIC-insured thrift serving the Baltimore Metropolitan area and surrounding counties in Maryland. The bank offers a wide variety of financial services and products throughout its market area. The bank maintains a website at http://www.slavie.com/. SFSB, INC. UNAUDITED CONDENSED STATEMENTS OF INCOME (In thousands except per share data) Three Months Ended Nine Months Ended September 30 September 30 2008 2007 2008 2007 Interest income $2,466 $2,367 $7,347 $6,992 Interest expense 1,407 1,550 4,361 4,594 Net interest income 1,059 817 2,986 2,398 Provision for loan losses 56 26 130 208 Net interest income after provision for loan losses 1,003 791 2,856 2,190 Non-interest income (1,554) 105 (1,341) 277 Non-interest expenses 948 848 2,698 2,482 Income (Loss) before income tax provision (1,499) 48 (1,183) (15) Income tax provision (benefit) 75 21 207 6 Net income (loss) (1,574) 27 (1,390) (21) Basic earnings (loss) per share (0.59) 0.01 (0.51) (0.01) Diluted earnings (loss) per share (0.59) 0.01 (0.51) (0.01) SFSB, INC. UNAUDITED SELECTED FINANCIAL DATA (In thousands) September 30 December 31 2008 2007 Total assets $175,855 $172,244 Cash and cash equivalents 2,154 1,277 Investment securities 7,808 11,942 Loans receivable-net 155,309 147,744 Deposits 123,819 114,098 Total borrowings 30,500 34,000 Total stockholders' equity 20,162 21,769 SFSB, INC. RECONCILIATION of NON-GAAP FINANCIAL MEASURES (In thousands) For the Quarter For the Nine ended Months ended September 30, 2008 September 30, 2008 Net Loss $(1,574) $(1,390) Adjustment for loss on investment 1,678 1,678 Income after adjustment 104 288 DATASOURCE: SFSB, Inc. CONTACT: Charles E. Wagner, Jr., Sr. Vice President and Corporate Secretary of SFSB, Inc., +1-443-265-5570, Web site: http://www.slavie.com/

Copyright