TAPPAHANNOCK, Va., April 30 /PRNewswire-FirstCall/ -- BOE Financial
Services of Virginia, Inc. (the "Company" or "BOE") (NASDAQ:BSXT)
reported net income was $374,000 for the quarter ended March 31,
2008 compared to $552,000 for the first quarter in 2007. Earnings
per share, on a diluted basis, were $0.31 per share for the first
quarter of 2008 compared to $0.45 per share for the same period in
2007. These results were largely impacted by the recognition of
one-time merger related expenses associated with our proposed
merger with Community Bankers Acquisition Corp ("CBAC"). Increases
in net interest income of $82,000 and non-interest income of
$101,000 were exceeded by a $417,000 increase in non-interest
expenses primarily due to merger and branch expansion activities.
Direct expenses related to BOE's proposed merger with Community
Bankers Acquisition Corporation ("CBAC") resulted in an increase in
noninterest expenses of $194,000 in the first quarter of 2008
compared to the same period in 2007. The BOE special meeting of
shareholders originally scheduled for Friday, April 25, 2008, to
consider and vote on its proposed merger with CBAC, was adjourned
until Wednesday, May 21, 2008. This was after learning that CBAC
planned to adjourn its two shareholder meetings in order to provide
its shareholders more time to consider and vote on the proposed
merger with BOE, its proposed merger with TransCommunity Financial
Corporation and related matters. Other nonrecurring items during
the first quarter of 2008 included a one-time gain by BOE of
$90,000 related to the sale of the Company's credit card portfolio
and a write down of $88,000 on BOE's ownership interest in Bankers
Investments, which announced its sale to Infinex. The net impact of
non-recurring items in the first quarter of 2008 was $192,000 in
additional expenses, pre-tax, and subsequently resulted in a
reduction in net income of $154,000, after applying the Company's
effective tax rate. Excluding the nonrecurring items mentioned
above, total noninterest expenses increased $223,000 during the
first quarter of 2008 compared to the same period in 2007. Salaries
represented the largest component of this increase, amounting to
$118,000, or 13.7%, over the same period in 2007. Employee benefits
and costs also increased, $32,000, or 11.8%, during the first
quarter of 2008 compared to the same period in 2007. The increases
in salaries and employee benefits and costs were largely composed
of adding additional banking staff to operate two new branches in
Northumberland County, Virginia. The Burgess office opened October
15, 2007 and Callao opened on January 2, 2008. Expansion efforts
were the primary component, $48,000, or 44.4%, in increases in
furniture and equipment related expenses for the first quarter of
2008 compared to the same period in 2007. Offsetting these
decreases to net income for the quarter ended March 31, 2008 was an
increase of $99,000, or 23.2%, in total noninterest income.
Provision for loan losses was $0 for both the first quarter of 2008
and 2007. Loan quality remains strong as nonaccruing loans were
$73,000 on March 31, 2008, or 0.03% of total loans, compared to
$96,000, or 0.04% of total loans at December 31, 2007. Loans past
due 90 days or more and accruing interest were $95,000 at March 31,
2008 and $17,000 at December 31, 2007. Net charged-off loans were
$36,000 in the first quarter of 2008. "Our two newly opened offices
in Northumberland County are off to a tremendous start," said
George M. Longest, Jr., President and Chief Executive Officer. "The
Burgess and Callao Offices have quickly established strong deposit
and loan relationships. We feel Northumberland County possesses
outstanding demographics. We also are incurring expenses related to
our merger proposal with CBAC but hope to wrap up the transaction
in the second quarter of this year. We are looking forward to
operating in a new holding company environment but with the
historic Bank of Essex name still in place. We are also pleased
that our net interest income held steady in a rapidly decreasing
interest rate environment and that our loan quality ratios,
including past due and classified loans, have improved in the first
three months of the year." BOE, which offers a broad range of
financial services to consumers and businesses, currently operates
eight Bank of Essex offices in Essex, King William, Hanover,
Henrico and Northumberland counties. As of March 31, 2008 the
Company had $315.848 million in total assets, which was an increase
of $34.330 million, or 12.2%, from March 31, 2007 total assets of
$281.518 million. Total deposits at March 31, 2008 increased
$19.225 million, or 8.2%, over the same total one year earlier to
$252.993 million. Total loans at March 31, 2008 were $230.262
million compared to $199.126 million at March 31, 2007, an increase
of $31.136 million, or 15.6%. BOE Financial Services of Virginia,
Inc. stock trades on the Nasdaq Capital Market under the symbol
BSXT. BOE Financial Services of Virginia, Inc. Consolidated Balance
Sheets (Unaudited) (in thousands) March 31, December 31, March 31,
Assets 2008 2007 2007 Cash and due from banks $4,222 $4,100 $3,879
Federal funds sold 4,038 - 736 Securities available for sale, at
fair value 52,500 52,543 54,415 Securities held to maturity (fair
values approximates $3,029, $3,010 and $2,960, respectively) 3,000
3,000 3,000 Equity securities, restricted, at cost 2,136 1,761
1,536 Loans held for sale 883 497 250 Loans, net of allowance for
loan losses ($2,559, $2,595 and $2,405, respectively) 227,703
218,954 196,720 Bank premises and equipment, net 10,801 10,663
10,336 Accrued interest receivable 1,494 1,514 1,467 Intangible
assets, net 367 398 493 Other assets 8,704 9,001 8,704 Total assets
$315,848 $302,431 $281,536 Liabilities and Stockholders' Equity
Liabilities Deposits: Non-interest bearing deposits $26,876 $26,220
$27,532 Interest bearing deposits 226,117 218,373 206,235 Total
deposits $252,993 $244,593 $233,767 Federal funds purchased - 3,152
- Federal Home Loan Bank advances 24,500 17,000 12,000 Trust
preferred capital notes 4,124 4,124 4,124 Accrued interest payable
990 1,007 809 Other liabilities 2,812 2,445 2,469 Total liabilities
$285,419 $272,321 $253,169 Commitments and Contingent Liabilities
Stockholders' Equity Common stock $6,070 $6,062 $6,045 Surplus
5,613 5,577 5,503 Retained earnings 18,780 18,872 17,578
Accumulated other comprehensive (loss) (34) (401) (759) Total
stockholders' equity $30,429 $30,110 $28,367 Total liabilities and
stockholders' equity $315,848 $302,431 $281,536 BOE Financial
Services of Virginia, Inc. Consolidated Income Statements
(Unaudited) (in thousands) For the For the quarter quarter ended
ended March 31, March 31, Percent 2008 2007 change Interest and
Dividend Income Interest and fees on loans $4,071 $3,759 8.3%
Interest and dividends on securities: U.S. Treasury 4 4 0.0% U.S.
Government agencies 204 208 -1.9% State and political subdivisions,
nontaxable 332 354 -6.2% State and political subdivisions, taxable
30 24 25.0% Other securities 45 47 -4.3% Interest on federal funds
sold 13 18 -27.8% Total interest and dividend income $4,699 $4,414
6.5% Interest Expense Interest on deposits $2,000 $1,819 10.0%
Interest on borrowings 304 282 7.8% Total interest expense $2,304
$2,101 9.7% Net interest income $2,395 $2,313 3.5% Provision for
Loan Losses - - Net interest income after provision for loan losses
$2,395 $2,313 3.5% Noninterest Income Service charge income $275
$235 17.0% Net security gains 6 1 500.0% Net gains on sales of
loans 98 - Write-down of LLC membership (88) - Other income 236 190
-17.9% Total noninterest income $527 $426 23.7% Noninterest
Expenses Salaries $980 $862 13.7% Employee benefits and costs 304
272 11.8% Occupancy expenses 130 123 5.7% Furniture and equipment
related expenses 156 108 44.4% Data processing 144 140 2.9%
Stationery and printing 117 38 207.9% Postage 42 60 -30.0% Bank
franchise tax 66 61 8.2% Other operating expenses 518 376 37.8%
Total noninterest expenses $2,457 $2,040 20.4% Net income before
income taxes $465 $699 -33.5% Income Taxes 91 147 -38.1% Net income
$374 $552 -32.2% Earnings Per Share, basic $0.31 $0.46 Earnings Per
Share, diluted $0.31 $0.45 Additional Information About the Mergers
and Where to Find It Additional information about the proposed
merger can be found in the definitive joint proxy
statement/prospectus. The definitive joint proxy
statement/prospectus relating to the BOE special meeting was filed
with the SEC on March 31, 2008 and is available at
http://www.sec.gov/. In connection with the proposed mergers, CBAC
has filed with the SEC a registration statement on Form S-4 to
register the shares of CBAC common stock to be issued to the
shareholders of TFC as well as a registration statement on Form S-4
to register the shares of CBAC common stock to be issued to the
shareholders of BOE. Each registration statement includes a joint
proxy statement/prospectus, which has been mailed to the
shareholders of CBAC and to the shareholders of TFC or BOE, as
applicable, seeking their approval of the applicable merger. In
addition CBAC, TFC, and BOE may file other relevant documents
concerning the proposed mergers with the SEC. WE URGE INVESTORS AND
SECURITY HOLDERS TO READ THE REGISTRATION STATEMENTS ON FORM S-4
AND THE JOINT PROXY STATEMENT/PROSPECTUSES FILED WITH THE SEC AND
ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION
WITH THE PROPOSED MERGERS, BECAUSE THEY CONTAIN IMPORTANT
INFORMATION ABOUT CBAC, TFC, AND BOE AND THE PROPOSED TRANSACTIONS.
Investors and security holders may obtain free copies of these
documents through the website maintained by the SEC
athttp://www.sec.gov. Free copies of both joint proxy
statement/prospectuses also may be obtained by directing a request
by telephone or mail to: Community Bankers Acquisition Corp., 9912
Georgetown Pike, Suite D203, Great Falls, Virginia 22066,
Attention: Investor Relations (telephone: (703) 759-0751). Free
copies of the joint proxy statement/prospectus relating to the
proposed merger of CBAC with TFC also may be obtained by directing
a request by telephone or mail to: TransCommunity Financial
Corporation, 4235 Innslake Drive, Glen Allen, Virginia 23060,
Attention: Investor Relations (telephone: (804) 934-9999), or by
accessing TFC's website at http://www.tcfcorp.com/ under "Investor
Relations." Free copies of the joint proxy statement/prospectus
relating to the proposed merger of CBAC with BOE also may be
obtained by directing a request by telephone or mail to: BOE
Financial Services of Virginia, Inc., 1325 Tappahannock Boulevard,
Post Office Box 965, Tappahannock, Virginia 22560, Attention:
Investor Relations (telephone: (804) 443-4343), or by accessing
BOE's website at http://www.bankofessex.com/ under "Investor
Relations." The information on BOE's and TFC's websites is not, and
shall not be deemed to be, a part of this release or incorporated
into other filings either company, or CBAC, makes with the SEC.
CBAC, TFC and BOE and their respective directors, executive
officers and members of management may be deemed to be participants
in the solicitation of proxies from the shareholders of BOE and
TFC, as applicable, and/or CBAC in connection with the mergers.
Information about the directors and executive officers of CBAC is
set forth in the Annual Report on Form 10-K filed with the SEC on
March 31, 2008. Information about the directors and executive
officers of TFC is set forth in the Annual Report on Form 10-K
filed with the SEC on March 31, 2008. Information about the
directors and executive officers of BOE is set forth in the Annual
Report on Form 10-K filed with the SEC on March 31, 2008.
Additional information regarding the interests of these
participants and other persons who may be deemed participants in
the mergers may be obtained by reading the joint proxy
statement/prospectuses regarding the mergers filed with the SEC on
March 31, 2008. Caution Regarding Forward-Looking Statements
Statements made in this release, other than those concerning
historical financial information, may be considered forward-looking
statements, which speak only as of the date of this release and are
based on current expectations and involve a number of assumptions.
These include statements as to the anticipated benefits of the
mergers, including future financial and operating results, cost
savings and enhanced revenues that may be realized from the mergers
as well as other statements of expectations regarding the mergers
and any other statements regarding future results or expectations.
Each of CBAC, TFC and BOE intends such forward-looking statements
to be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995 and is including this statement for purposes of these
safe harbor provisions. The companies' respective abilities to
predict results, or the actual effect of future plans or
strategies, are inherently uncertain. Factors which could have a
material effect on the operations and future prospects of each of
CBAC, TFC and BOE and the surviving corporation, include but are
not limited to: (1) the businesses of CBAC, TFC, and BOE may not be
integrated successfully or such integration may be more difficult,
time-consuming or costly than expected; (2) expected revenue
synergies and cost savings from the mergers may not be fully
realized or realized within the expected time frame; (3) revenues
following the mergers may be lower than expected; (4) customer and
employee relationships and business operations may be disrupted by
the mergers; (5) the ability to obtain required regulatory and
stockholder approvals, and the ability to complete the mergers on
the expected timeframe may be more difficult, time-consuming or
costly than expected; (6) changes in interest rates, general
economic conditions, legislative/regulatory changes, monetary and
fiscal policies of the U.S. government, including policies of the
U.S. Treasury and the Federal Reserve Board may adversely impact
income; (7) changes in the quality and composition of the loan and
securities portfolios, demand for loan products, deposit flows,
competition, demand for financial services in BOE's and TFC's
market areas may adversely affect operations; (8) CBAC, TFC and
BOE's implementation of new technologies and their ability to
develop and maintain secure and reliable electronic systems may
impact their respective businesses; (9) changes in accounting
principles, policies, and guidelines may impact reported earnings;
and (10) other risk factors detailed from time to time in filings
made by CBAC, BOE or TFC with the SEC may be associated with their
respective businesses. CBAC, TFC and BOE undertake no obligation to
update or clarify these forward-looking statements, whether as a
result of new information, future events or otherwise. This release
shall not constitute an offer to sell or the solicitation of an
offer to buy securities in any jurisdiction in which such
solicitation would be unlawful. DATASOURCE: BOE Financial Services
of Virginia, Inc. CONTACT: Bruce E. Thomas, Sr. Vice President,
Chief Financial Officer of BOE Financial Services of Virginia,
Inc., +1-804-443-4343 Web site: http://www.bankofessex.com/
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