MIDLOTHIAN, Va., Oct. 30, 2009 (GLOBE NEWSWIRE) -- Bank of Virginia (Nasdaq:BOVA) (www.bankofva.com) announced the Bank's third quarter 2009 financial performance today. For the third quarter of 2009, the Bank reported net income of $530 thousand or basic earnings per share of 17 cents, versus $117 thousand or earnings per share of 4 cents, for the comparable period last year. In addition, non-performing assets, on a linked quarter basis, declined $244.5 thousand from $5.6 million at June 30, 2009 to $5.4 million at September 30, 2009. The allowance for loan losses as a percent of total loans was 2.62% at September 30, 2009. Non-performing assets, including nonaccrual loans, foreclosed real estate, and loans 90 days or more past due and still accruing, totaled $5.4 million, or 2.37% of total assets of $226.3 million at September 30, 2009.
The Bank finished the third quarter of 2009 with total assets of $226.3 million, an increase of $22.6 million or 11% from year-end 2008. During the first nine months of 2009, the Bank increased its total core deposits and loan volume. Total deposits were $201.0 million, up $30 million, or 17.5% over the year-ended 2008. At September 30, 2009, total net loans were $166.1 million compared to $153.0 million at December 31, 2008, an increase of $13.2 million or 8.6%. Income components for the quarter were comprised of operational income, securities gains and a negative provision for loan losses. The negative provision for loan losses in the third quarter was driven by the reduction in non-performing assets and recoveries on loans which had specific reserves.
The net loss for the first nine months of the year was $2.7 million, or a basic loss per share of 90 cents, compared to net income of $85 thousand or basic earnings per share of 3 cents for the first nine months of 2008. The year to date loss is primarily due to the Bank's increase in loan loss provision in the second quarter resulting from the continued deterioration in the real estate market.
Frank Bell, President & CEO commented, "We are encouraged to report that during the third quarter we were able to have solid growth in both core deposits and loans. I am also encouraged that during the third quarter the Bank experienced loan recoveries of $420,000 on certain loans that had specific reserves, and as a result, the total provision decreased. Also as a result, the specific reserves attached to these loans were reduced."
The Bank is focused on understanding and proactively addressing issues in the loan portfolio. Given the current economic struggles, the Bank has made aggressive increases to our overall loan loss reserves and collection efforts.
On a year-to-date basis, the Bank remains in a loss position principally due to the increased loan loss reserves, as well as several loans that were charged off in the second quarter 2009. The Bank's reserve for loan losses at September 30, 2009 was $4.5 million or 2.62% of total loans as compared to $2.9 million or 1.89% for year-end 2008.
Additionally, 2009 year-to-date results include an unprecedented FDIC Deposit Insurance Fund special assessment of over $100,000 in the second quarter. This assessment (based on asset size) was imposed on all FDIC insured institutions. In summary, our negative earnings position for the first nine of months of 2009 results from increased loan loss reserves driven primarily by loan growth, economic trends, strategic investments we have made through a core system conversion in growing Bank of Virginia, and an economy that continues to stress our net interest margins.
This August 2009, Bank of Virginia opened a new 3000 square foot branch office in Chesterfield County, Virginia, which was a relocation of an existing retail storefront branch. Management feels positive that with the existing shareholder and customer base that surrounds the office, it will prove to be a positive addition to Bank of Virginia.
Mr. Bell stated that he: "...expects that we will enter a written agreement with the Federal Reserve during the fourth quarter of 2009. While we do not know the exact contents of the written agreement at this time, we expect that it will require us to implement plans to improve our risk management and compliance systems, oversight functions, operating and financial management and capital plans. We also expect to curb asset growth and focus on improving profitability until capital levels are increased."
In addition, the Bank today announced that it intends to offer up to $10 million of common stock in lieu of its offering of investment units. McKinnon & Company, Inc. will serve as the underwriter for this offering and will conduct the offering on a best-efforts basis.
The securities being offered have not been, and will not be, registered under the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws, and are being offered and sold in reliance on exemptions from the registration requirements of the Securities Act and such state laws. A copy of the offering circular relating to the offering may be obtained from McKinnon & Company, Inc., Norfolk, Virginia (www.mckinnonco.com) by telephone at (800) 853-4636.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful.
Bank of Virginia, a Virginia state chartered bank headquartered in Midlothian, Virginia currently operates five full-service offices in the counties of Chesterfield and Henrico, Virginia. Bank of Virginia common stock is traded on the NASDAQ stock market under the quotation symbol "BOVA". Additional investor relations information can be found on the internet at www.bankofva.com.
DISCLAIMER
This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Bank's periodic filings with the Board of Governors of the Federal Reserve System, including the Bank's annual report on Form 10-K as filed with the Board of Governors of the Federal Reserve. Pursuant to the Private Securities Litigation Reform Act of 1995, the Bank does not undertake to update forward-looking statements contained within this news release.
BANK OF VIRGINIA
Statements of Operations
(Unaudited)
Three Months Nine Months
and Period Ended and Period Ended
------------------------ ------------------------
September 30, September 30,
2009 2008 2009 2008
----------- ----------- ----------- -----------
Interest
Income:
Interest and fees
on loans $ 2,546,598 $ 2,602,195 $ 7,461,677 $ 7,624,427
Investment
securities 528,506 517,698 1,597,999 1,636,512
Interest on
federal funds
sold and
deposits with
banks 1,913 12,384 5,602 64,289
----------- ----------- ----------- -----------
Total interest
income 3,077,017 3,132,277 9,065,278 9,325,228
----------- ----------- ----------- -----------
Interest
Expense:
Interest on
deposits 1,389,661 1,550,136 4,296,035 4,907,023
Interest on fed
funds purchased
and FHLB
borrowings 115,773 144,348 353,742 395,493
----------- ----------- ----------- -----------
Total interest
expense 1,505,434 1,694,484 4,649,777 5,302,516
----------- ----------- ----------- -----------
Net interest
income 1,571,583 1,437,793 4,415,501 4,022,712
Provision for
loan losses (181,576) 105,574 3,458,699 248,825
----------- ----------- ----------- -----------
Net interest
income after
provision for
loan losses 1,753,159 1,332,219 956,802 3,773,887
----------- ----------- ----------- -----------
Non-interest
Income:
Service charges
on deposit
accounts 42,441 63,991 136,443 168,051
Net gain on
available for
sale securities 119,361 25,405 275,293 149,069
Other fee income 46,895 35,273 144,442 99,767
----------- ----------- ----------- -----------
Total non-
interest
income 208,697 124,669 556,178 416,887
----------- ----------- ----------- -----------
Non-interest
Expense:
Salaries and
employee
benefits 826,966 789,538 2,400,192 2,340,768
Occupancy expense 105,208 99,844 328,898 304,520
Equipment expense 56,358 80,259 171,011 236,190
Data processing 127,435 106,526 354,064 308,863
Marketing expense 30,778 20,948 87,372 161,879
Legal and pro-
fessional fees 41,970 46,684 120,040 152,632
FDIC insurance
assessments 36,345 22,264 203,906 66,311
Other operating
expenses 206,427 173,518 573,684 534,838
----------- ----------- ----------- -----------
Total non-
interest
expenses 1,431,487 1,339,581 4,239,167 4,106,001
----------- ----------- ----------- -----------
Net income
(loss) $ 530,369 $ 117,307 $(2,726,187) $ 84,773
=========== =========== =========== ===========
Income (loss) per
share, basic and
diluted $ 0.17 $ 0.04 $ (0.90) $ 0.03
=========== =========== =========== ===========
Weighted Average
Shares
Outstanding:
Basic 3,031,866 3,031,866 3,031,866 3,031,866
=========== =========== =========== ===========
Diluted 3,031,866 3,031,866 3,031,866 3,033,028
=========== =========== =========== ===========
At period end:
Book value
per share 4.77 5.66
Market value
per share 3.71 6.30
Tangible common
equity to
assets 6.39% 8.71%
BANK OF VIRGINIA
Balance Sheets
September 30, December 31,
2009 2008
Unaudited Audited
------------- -------------
Assets
Cash and due from banks $ 3,204,538 $ 2,608,500
Federal funds sold and interest-
bearing balances with banks 4,177,664 42,194
------------- -------------
7,382,202 2,650,694
Securities available for sale, at
fair market value 44,010,046 39,474,175
Restricted securities 1,531,200 1,534,550
Loans, net of allowance for loan
losses of $4,476,947 in 2009 and
$2,942,988 in 2008 166,141,103 152,962,046
Premises and equipment, net 5,854,685 5,688,585
Accrued interest receivable 830,198 864,630
Other real estate owned 308,019 308,019
Other assets 265,522 229,220
------------- -------------
Total assets $ 226,322,975 $ 203,711,919
============= =============
Liabilities
Deposits:
Noninterest-bearing $ 15,997,362 $ 12,483,762
Savings and interest-bearing demand 28,231,758 18,770,259
Time, $100,000 and over 67,233,095 55,939,332
Other time 89,508,597 83,818,330
------------- -------------
Total deposits 200,970,812 171,011,683
Accrued expenses and other
liabilities 898,556 1,208,215
FHLB borrowings 10,000,000 15,000,000
Federal funds purchased -- 176,000
------------- -------------
Total liabilities 211,869,368 187,395,898
------------- -------------
Stockholders' Equity
Preferred stock, $5 par value,
5,000,000 shares authorized, none
issued -- --
Common stock, $2.50 par value,
40,000,000 shares authorized,
3,031,866 shares issued and
outstanding in 2009 and 2008,
respectively 7,579,665 7,579,665
Additional paid-in capital 14,713,504 14,705,508
Retained (deficit) (8,640,128) (5,913,941)
Accumulated other comprehensive
income (loss) 800,566 (55,211)
------------- -------------
Total stockholders' equity 14,453,607 16,316,021
------------- -------------
Total liabilities and
stockholders' equity $ 226,322,975 $ 203,711,919
============= =============
BANK OF VIRGINIA
Selected Historical Information
(Unaudited)
As of and for the Quarter Ended
Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
2009 2009 2009 2008 2008
--------- ---------- --------- --------- ---------
Asset Quality
Analysis:
Allowance for
loan losses:
Beginning
balance 4,690,071 3,012,738 2,942,988 1,525,551 1,419,977
Provision (181,575) 3,570,525 69,750 1,515,500 105,574
Charge-offs (31,549) (1,893,192) -- (98,063) --
Recoveries -- -- -- -- --
--------- ---------- --------- --------- ---------
Net charge-
offs (31,549) (1,893,192) -- (98,063) --
--------- ---------- --------- --------- ---------
Ending
Balance 4,476,947 4,690,071 3,012,738 2,942,988 1,525,551
========= ========== ========= ========= =========
Nonperforming
Assets:
Nonaccrual
loans 5,065,056 4,541,510 -- 244,273 413,195
Foreclosed
real estate 308,019 308,019 308,019 308,019 --
Loans 90 days
or more past
due and still
accruing -- 768,088 3,197,350 696,000 691,500
--------- ---------- --------- --------- ---------
Nonperforming
assets 5,373,075 5,617,617 3,505,369 1,248,292 1,104,695
========= ========== ========= ========= =========
Allowance for
loan losses as
a percent of
loans 2.62% 2.82% 1.89% 1.89% 1.00%
Non-performing
assets to
total assets 2.37% 2.49% 1.58% 0.61% 0.55%