Virginia Commerce Bancorp, Inc. (the “Company”), (Nasdaq: VCBI),
parent company of Virginia Commerce Bank (the “Bank”), today
reported a net loss of $6.4 million, or $0.24 per diluted common
share, for the second quarter of 2009, compared with earnings of
$4.9 million, or $0.18 per diluted common share, for the same
period in 2008. The second quarter loss was primarily due to $18.4
million in provisions for loan losses versus $3.7 million for the
three months ended June 30, 2008, as total non-performing assets
and loans 90+ days past due decreased $22.5 million from March 31,
2009, and net-charge-offs of $16.9 million were taken during the
quarter.
Peter A. Converse, Chief Executive Officer, commented, “In the
second quarter, we made progress in reducing our overall level of
non-performing assets by $22.5 million. That progress included
meaningful reductions of $19.7 million in non-accrual loans and
$18.6 million in loans 90+ days past due, as $16.9 million in
charge-offs were taken and other real estate owned increased $15.7
million through foreclosures. To achieve the reductions, the
Company incurred an operating loss, primarily due to increased loan
loss reserve provisions in the quarter. That is in keeping with our
commitment to fully utilize operating earnings and, if necessary,
our capital cushion, to aggressively address our problem loans.
Along with the reduction in problem loans, the Company is pleased
to report that loans 30 to 89 days past due declined significantly
from $55.7 million at the end of the first quarter to $19.2 million
as of June 30.”
Converse continued, “Management is cautiously optimistic that we
are headed in the right direction and expects continued improvement
in asset quality measures going forward, notwithstanding market or
economic headwinds beyond our control. While our bottom line will
continue to be challenged at least through the end of this year, we
believe that our capital is sufficient to absorb loan-related
losses and still be maintained at well-capitalized levels. We will
continue to pursue all appropriate measures to significantly
decrease non-performing assets with the goal of reducing them from
the high point of $162.1 million at the end of the first quarter to
$100 million or less by year-end. A case in point is the recent
introduction of our Stimulus Mortgage Program to assist our home
builder and lot developer loan customers with selling inventory by
providing special mortgage financing to purchasers. We are already
experiencing positive results from this program, especially in
paydowns on problem construction and development loans from
property sales enabled through these special mortgage terms.”
“Clearly we are committed to aggressive problem loan resolution
as our top priority this year. At the same time, we also remain
focused on our core competencies and the other elements of our
action plan to restore stockholder value. Before loan loss reserve
provisioning, our pre-tax operating income in the second quarter
was $10.4 million after accruing for a $1.2 million special FDIC
insurance assessment, as compared to pre-provision, pre-tax income
of $9.5 million for the first quarter. We continue to be an active,
responsive lender as we reposition our loan portfolio by pursuing
alternative lending strategies, including ramping up our government
contract lending. Efforts to reduce our acquisition, development
and construction lending concentration have resulted in that
portfolio category declining by $78.8 million year-to-date. We are
making good progress in improving our deposit mix with second
quarter growth of $21.1 million in demand deposits and $111.6
million in savings and interest-bearing checking accounts, while
time deposits, or CDs, decreased by $180.6 million. The decline in
CDs has lowered that deposit concentration from 67.2% of total
deposits at year-end 2008 to 54.4% at the end of the second
quarter, and is expected to reach the 45 - 50% level by the end of
2009. These improvements in our deposit mix have contributed nicely
to a lowering of our cost of funds and a sequential improvement of
20 basis points in our net interest margin from 3.15% in the first
quarter of 2009 to 3.35% this quarter.”
Converse concluded, “It appears that our ship is moving in the
right direction and we are determined to keep it on course to
improve operating performance and restore stockholder value.”
SUMMARY REVIEW OF FINANCIAL PERFORMANCE
Net (Loss) Income
For the three months ended June 30, 2009, the Company recorded a
net operating loss of $5.2 million. After an effective dividend of
$1.2 million to the U.S. Treasury on preferred stock, the Company
reported a net loss to common stockholders of $6.4 million, or
$0.24 per diluted common share, compared to earnings of $4.9
million, or $0.18 per diluted common share, in the second quarter
of 2008. For the six months ended June 30, 2009, the Company
reported a net loss to common stockholders of $9.6 million compared
to earnings of $9.1 million for the same period in 2008. Earnings
for both the three and six- month periods were significantly
impacted by loan loss provisions of $18.4 million and $31.8
million, respectively, due to the year-over-year increase in the
level of non-performing assets and $29.3 million in net charge-offs
in 2009.
On a pre-tax, pre-provision basis, operating income of $10.4
million for the three months ended June 30, 2009, was down $874
thousand as compared to $11.2 million for the three months
ended June 30, 2008. However, the current quarter results include a
special, one-time FDIC insurance assessment of $1.2 million. On a
sequential basis, pre-tax, pre-provision operating income was up
$809 thousand, despite the special assessment.
Asset Quality and Provisions For Loan Losses
Provisions for loan losses were $18.4 million for the three
months ended June 30, 2009, compared to $3.7 million in the same
period in 2008, due to an increase in non-performing assets and
loans 90+ days past due from $43.9 million at June 30, 2008, to
$139.6 million at June 30, 2009. For the six months ended June 30,
2009, provisions totaled $31.8 million compared to $7.8 million for
the six months ended June 30, 2008, with 2009 year-to-date net
charge-offs of $29.3 million compared to $3.9 million in the first
half of 2008. As a result, total loan loss reserves to
non-performing loans rose from 25.1% at March 31, 2009, to 35.0% at
this quarter-end.
The higher levels of provisions and net-charge-offs are
attributable to Management’s focus on aggressive problem loan
resolution, as total non-performing assets and loans 90+ days past
due declined by $22.5 million during the quarter from $162.1
million, or 5.84% of total assets, to $139.6 million, or 5.17% of
total assets. Non-accrual loans decreased by $19.7 million, loans
90+ days past due decreased by $18.6 million and other real estate
owned (foreclosed properties) increased by $15.7 million. In
addition to the quarterly decline in non-accruals and loans 90+
days past due, loans past due 30 to 89 days were reduced
significantly from $55.7 million at March 31, 2009, to $19.2
million.
Non-performing loans continue to be concentrated in residential
and commercial construction and land development loans in outer
sub-markets hardest hit by the residential downturn and commercial
and consumer credits experiencing the after shocks in
sub-contracting businesses and workforce employment. Additions to
non-performing loans in the second quarter included $3.3 million in
one-to-four family residential loans and $7.7 million in non-owner
occupied, non-farm, non-residential loans which were predominantly
located in outer sub-markets and negatively impacted by higher
vacancy and delinquent rents. Additionally, a $2.4 million
commercial and industrial loan impacted by fraud and embezzlement
was added. Overall, as of June 30, 2009, $74.6 million, or 67.0%,
of non-performing loans represented acquisition, development and
construction loans, $14.9 million, or 13.4%, represented non-farm,
non-residential loans, $12.3 million, or 11.0%, represented
commercial and industrial loans and $4.3 million, or 3.9%,
represented loans on one-to-four family residential properties.
Charge-offs for the quarter primarily related to the write-down
to current fair market value of acquisition, development and
construction loans or related other real estate owned by $15.8
million and the recognition of losses on $1.1 million in commercial
and industrial loans, predominantly to real estate-related or small
business concerns.
Net Interest Income
Net interest income for the second quarter of $22.0 million was
up $1.3 million, or 6.2% over the same quarter last year, due to
overall balance sheet growth, and an increase in the net interest
margin from 3.30% in the second quarter of 2008 to 3.35% for the
current three-month period. Year-to-date net interest income of
$42.8 million was up 6.4%, compared to $40.2 million in 2008. On a
sequential basis, net interest income increased $1.2 million as the
net interest margin rose twenty basis points from 3.15% in the
first quarter of 2009, primarily due to a twenty-six basis point
drop in the cost of interest-bearing liabilities. This drop in the
cost of funds is due to significant reductions in the level of time
deposits, increased levels of demand deposits and increased levels
of lower rate interest-bearing transaction accounts. Furthermore,
the improvement in the net interest margin occurred despite the
reversal of $423 thousand in interest on loans placed on
non-accrual, which lowered the yield on loans by seven basis
points.
Year-over-year, yields on loans are down 106 basis points due to
reductions in the prime rate and increases in the level of
non-performing loans, while the cost of interest-bearing
liabilities are down 96 basis points due to the changes noted above
in the funding mix. With market rates expected to remain mostly
unchanged through the remainder of 2009, Management anticipates the
margin to average from 3.30% to 3.40%.
Non-Interest Income
Non-interest income for the second quarter was up $220 thousand,
or 12.7%, from $1.7 million in 2008, to $1.9 million, with a $537
thousand increase in fees and net gains on mortgage loans
held-for-sale more than offsetting declines in other non-interest
income categories, including a $108 thousand impairment loss on
securities. For the six months ended June 30, 2009, non-interest
income was up $409 thousand, or 12.2%, due again to higher levels
of fees and net gains on mortgage loans held-for-sale.
Sequentially, non-interest income was up $129 thousand.
Non-Interest Expense
Non-interest expense increased $2.4 million, or 21.2%, from
$11.2 million in the second quarter of 2008, to $13.6 million, and
was up $4.6 million, or 21.0%, for the six months ended June 30,
2009, to $26.6 million. Compared to the first quarter of 2009,
non-interest expense is up $563 thousand. The majority of the
year-over-year increases were due to significantly higher FDIC
insurance premiums, including a special one-time assessment of $1.2
million in the second quarter, as well as higher legal and
professional services expenses associated with the collection of
non-performing loans and OREO. As a result of these increases in
expenses, the efficiency ratio rose from 49.9% in the second
quarter of 2008 to 56.7% in the current period. Sequentially, the
ratio improved slightly from 57.7%.
Loans
Over the past twelve months, loans, net of allowance for loan
losses, increased $33.6 million, or 1.5%, to $2.2 billion, as
non-farm, non-residential real estate loans increased $60.1
million, or 6.1%, one-to-four family residential loans increased
$64.8 million, or 21.3%, while real estate construction loans fell
by $95.9 million, or 15.9%, and commercial and industrial loans
remained unchanged. Since December 31, 2008, net loans are down
$55.1 million, or 2.4%, with non-farm non-residential loans up
$30.9 million, construction loans down $78.8 million, one-to-four
family residential loans for portfolio up $12.4 million. In
addition, one-to-four family residential loans originated for sale
totaled $64.8 million for the quarter ended June 30, 2009, and
$125.9 million year-to-date, compared to $22.5 million and $44.2
million for the same periods in 2008. This contributed to the gain
in non-interest income as noted earlier.
Year-to-date loan production has been negatively impacted by
declining economic activity and demand in both the business and
consumer sectors, a reallocation of personnel resources to problem
loan identification and resolution and a strategic decision to
moderate loan growth in the face of an uncertain economy and
heightened risk factors. Going forward, lending efforts will be
focused on building greater market share in commercial and
industrial lending, especially in sectors forecast for growth, such
as government contract lending and select service industries with
strategic hiring, marketing campaigns and calling efforts.
Deposits
Year-over-year, deposits increased $92.2 million, or 4.4%, from
$2.1 billion to $2.2 billion, with demand deposits increasing $36.3
million, or 17.8%, savings and interest-bearing demand deposits
increasing by $192.1 million, or 33.8%, and time deposits falling
$136.2 million, or 10.3%. Sequentially, deposits were down $47.9
million, or 2.1%, with demand deposits increasing by $21.1 million,
savings and interest-bearing demand accounts growing $111.6
million, and time deposits decreasing by $180.6 million. The
declines in time deposits are reflective of lower loan volume and a
strategy to reduce the Bank's historically heavy reliance on
certificates of deposit as a funding source with deposit gathering
efforts increasingly focused on demand deposits as well as
cross-selling activities tied to the acquisition of savings and
interest-bearing demand accounts. The proportionate share of time
deposits relative to total deposits has declined from 67.2% at
year-end 2008 to 54.4% as of June 30, 2009, and is expected to be
in the 45-50% range by the end of this year.
Repurchase Agreements and Fed Funds Purchased
Repurchase agreements, the majority of which represent sweep
funds of significant commercial demand deposit customers, and Fed
funds purchased decreased $113.2 million, or 40.6%, year-over-year,
to $165.7 million at June 30, 2009, with a $63.0 million decline in
Fed funds purchased. Since December 31, 2008, this funding source
is down $22.2 million, with $12 million of the decline in Fed funds
purchased.
Investment Securities
Investment securities decreased $25.6 million, or 7.4%, from
$346.4 million at June 30, 2008, to $320.8 million at June 30,
2009, and were down $30.6 million sequentially from the first
quarter. The majority of the current period and year-over-year
decline in securities were due to calls and maturities in U.S.
Government agency debt obligations as well as higher levels of
prepayments on mortgage-backed securities. The portfolio also
contains four pooled trust preferred collateralized debt
obligations totaling $8.9 million, for which the Bank performs a
quarterly analysis for other than temporary impairment due to
significantly depressed current market quotes. The analysis
includes stress tests on the underlying collateral and cash flow
estimates based on the current and projected future levels of
deferrals and defaults within each pool. Based on the most recent
analysis, the Bank recorded a $108 thousand impairment loss for the
second quarter on one of the four pools.
Capital and Stockholders’ Equity
Stockholders’ equity increased $67.7 million, or 38.6%, from
$175.4 million at June 30, 2008, to $243.0 million at June 30,
2009, with a net loss to common stockholders of $5.9 million over
the twelve-month period, and $71 million in preferred stock issued
to the U.S. Treasury under the Treasury’s Capital Purchase Program.
In connection with the issuance of the preferred stock, the Company
also issued warrants to purchase an aggregate of 2.7 million shares
of common stock to the Treasury. Additionally, in September 2008,
the Company raised $25 million in qualifying capital through the
sale of trust preferred securities to the Company’s directors and
certain of its executive officers. The issuance of the trust
preferred securities also included warrants to purchase an
aggregate of 1.5 million shares of common stock. As a result of
this issuance, and the issuance of the preferred shares, the
Company’s Tier 1 Capital ratio increased from 9.31% at June 30,
2008, to 12.72% as of June 30, 2009, and its total qualifying
capital ratio increased from 10.42% to 13.97%.
CONFERENCE CALL
Virginia Commerce Bancorp will host a teleconference call for
the financial community on July 24, 2009, at 11:00 a.m. Eastern
Daylight Time to discuss the first quarter 2009 financial results.
The public is invited to listen to this conference call by dialing
866-261-3182 at least 10 minutes prior to the call.
A replay of the conference call will be available from 2:00 p.m.
Eastern Daylight Time on July 24, 2009, until 11:59 p.m. Eastern
Daylight Time on July 31, 2009. The public is invited to listen to
this conference call replay by dialing 888-266-2081 and entering
access code 1380066.
ABOUT VIRGINIA COMMERCE
BANCORP, INC.
Virginia Commerce Bancorp, Inc. is the parent bank holding
company for Virginia Commerce Bank, a Virginia state chartered bank
that commenced operations in May 1988. The Bank pursues a
traditional community banking strategy, offering a full range of
business and consumer banking services through twenty-seven branch
offices, one residential mortgage office and one investment
services office, principally to individuals and small-to-medium
size businesses in Northern Virginia and the Metropolitan
Washington, D.C. area.
NON-GAAP
PRESENTATIONS
This press release refers to the efficiency ratio, which is
computed by dividing non-interest expense by the sum of net
interest income on a tax equivalent basis and non-interest income.
This is a non-GAAP financial measure that we believe provides
investors with important information regarding our operational
efficiency. Comparison of our efficiency ratio with those of other
companies may not be possible because other companies may calculate
the efficiency ratio differently. The Company, in referring to its
net income, is referring to income under accounting principals
generally accepted in the United States, or “GAAP”.
FORWARD LOOKING
STATEMENTS
This press release may contain forward-looking statements within
the meaning of the Securities and Exchange Act of 1934, as amended,
including statements of goals, intentions, and expectations as to
future trends, plans, events or results of Company operations and
policies and regarding general economic conditions. In some cases,
forward-looking statements can be identified by use of words such
as “may,” “will,” “anticipates,” “believes,” “expects,” “plans,”
“estimates,” “potential,” “continue,” “should,” and similar words
or phrases. These statements are based upon current and anticipated
economic conditions, nationally and in the Company’s market,
interest rates and interest rate policy, competitive factors, and
other conditions which by their nature, are not susceptible to
accurate forecast, and are subject to significant uncertainty.
Because of these uncertainties and the assumptions on which this
discussion and the forward-looking statements are based, actual
future operations and results may differ materially from those
indicated herein. Readers are cautioned against placing undue
reliance on any such forward-looking statements. The Company’s past
results are not necessarily indicative of future performance.
Virginia Commerce Bancorp, Inc. Financial Highlights
(Dollars in thousands, except per share data) (Unaudited)
Three Months Ended June 30, Six Months Ended
June 30,
2009 2008 % Change
2009 2008 % Change
Summary Operating Results:
Interest and dividend income $37,183 $40,400 -8.0 % $74,737 $80,463
-7.1 % Interest expense 15,183 19,686 -22.9 % 31,980 40,284 -20.6 %
Net interest and dividend income 22,000 20,714 6.2 % 42,757 40,179
6.4 % Provision for loan losses 18,423 3,656 403.9 % 31,813 7,768
309.5 % Non-interest income 1,949 1,729 12.7 % 3,769 3,360 12.2 %
Non-interest expense 13,586 11,206 21.2 % 26,609 21,998 21.0 %
(Loss) income before income taxes (8,060 ) 7,581 -206.3 % (11,896 )
13,773 -186.4 % Net (loss) income ($5,184 ) $ 4,921 -205.3 %
($7,593 ) $9,069 -183.7 % Effective dividend on preferred stock
1,251 -- N/A 2,037 -- N/A Net (loss) income available to common
stockholders ($6,435 ) $ 4,921 -230.8 % ($9,630 ) $9,069 -206.2 %
Performance Ratios: Return on average assets -0.77 %
0.76 % -0.56 % 0.73 % Return on average equity -8.36 % 11.18 %
-6.11 % 10.43 % Net interest margin 3.35 % 3.30 % 3.25 % 3.32 %
Efficiency ratio (1) 56.7 % 49.9 % 57.2 % 50.5 %
Per
Share Data: (2) Net (loss) income per common share-basic ($0.24
) $0.18 -233.3 % ($0.36 ) $0.34 -205.9 % Net (loss) income per
common share-diluted ($0.24 ) $0.18 -233.3 % ($0.36 ) $0.33 -209.1
% Average number of shares outstanding: Basic 26,691,430 26,553,361
26,693,074 26,532,984 Diluted 26,909,417 27,153,901 27,001,579
27,201,418 As of June 30, 2009 2008
% Change
Selected Balance Sheet Data: Loans,
net $2,217,945 $2,184,359 1.5 % Investment securities 320,842
346,403 -7.4 % Assets 2,699,494 2,655,417 1.5 % Deposits 2,191,473
2,099,286 4.4 % Stockholders’ equity 243,013 175,363 38.6 % Book
value per common share (2) $6.44 $6.60 -2.4 %
Capital
Ratios (% of risk weighted assets): Tier 1 capital: Company
12.72 % 9.31 % Bank 12.68 % 7.56 % Total qualifying capital:
Company 13.97 % 10.42 % Bank 13.93 % 10.39 % Tier 1 leverage:
Company 11.18 % 8.40 % Bank 11.35 % 6.81 % Tangible common equity:
Company 6.37 % 6.60 % Bank 11.34 % 6.57 %
As of June 30, 2009 2008 3/31/09
Asset Quality: Non-performing assets: Non-accrual
loans: Commercial $ 12,259 $ 1,951 $ 10,433 Real estate-one-to-four
family residential: Closed end first and seconds 3,843 173 735 Home
equity lines
494 395
319 Total Real estate-one-to-four
family residential $ 4,337 $ 568 $ 1,054 Real estate-non-farm,
non-residential: Owner Occupied 6,462 2,534 6,319 Non-owner
occupied
8,460 411
792 Total Real estate-non-farm,
non-residential $ 14,922 $ 2,945 $ 7,111 Real estate-construction:
Residential-Owner Occupied 2,389 3,889 5,115 Residential-Builder
53,251 23,278 67,274 Commercial
18,955
1,513 34,829
Total Real estate-construction: $ 74,595 $ 28,680 107,218 Consumer
23 40 -2 Total Non-accrual loans 106,136 34,184 125,814 OREO
28,198 6,091
12,455 Total non-performing assets $ 134,334 $
40,275 $ 138,269 Loans 90+ days past due and still accruing
5,232 3,641
23,790 Total non-performing assets and past due
loans $ 139,566 $ 43,916 $ 162,059 Non-performing assets to
total loans: 5.94 % 1.82 % 6.05 % to total assets: 4.98 % 1.52 %
4.99 % Non-performing assets and past due loans to total loans:
6.17 % 1.98 % 7.09 % to total assets: 5.17 % 1.65 % 5.84 %
Allowance for loan losses to total loans 1.72 % 1.18 % 1.64 %
Allowance for loan losses to non-performing loans 35.00 % 69.01 %
25.06 % Loans 30 to 89 days past due $ 19,243 $ 41,095 $
55,730 Net charge-offs Commercial $ 3,176 $ 1,993 $ 2,097
Real estate-one-to-four family residential: Closed end first and
seconds 1,156 686 115 Home equity lines
824
-- 826
Total Real estate-one-to-four family residential $ 1,980 $ 686 $
941 Real estate-multi-family residential -- -- -- Real
estate-non-farm, non-residential: Owner Occupied 211 -- 211
Non-owner occupied
--
-- -- Total Real
estate-non-farm, non-residential $ 211 $ -- $ 211 Real
estate-construction: Residential-Owner Occupied 702 -- 40
Residential-Builder 12,896 1,119 3,542 Commercial
10,223 --
5,509 Total real estate-construction: $ 23,821
$ 1,119 $ 9,091 Farmland -- -- -- Consumer
122
127 31
Total Net charge-offs $ 29,310 $ 3,925 $ 12,371 Net charge-offs to
average loans outstanding 1.27 % 0.19 % 0.53 % As of
June 30, 2009 2008 %
Change 3/31/09 % Change
Loan Portfolio: Commercial $ 259,812 $ 254,110 2.2 % $
265,279 -2.1 % Real estate-one to four family residential: Closed
end first and seconds 236,523 197,858 19.5 % 229,062 3.3 % Home
equity lines
133,176
107,025 24.4 %
128,291 3.8 %
Total Real estate-one-to-four family residential $ 369,699 $
304,883 21.3 % $ 357,353 3.5 % Real estate-multifamily residential
69,616 62,667 11.1 % 66,577 4.6 % Real estate-non-farm,
non-residential: Owner Occupied 428,372 411,357 4.1 % 428,112 0.1 %
Non-owner occupied
613,825
570,731 7.6 %
594,423 3.3 %
Total Real estate-non-farm, non-residential $ 1,042,197 $ 982,088
6.1 % $ 1,022,535 1.9 % Real estate-construction: Residential-Owner
Occupied 23,047 24,308 -5.2 % 24,119 -4.4 % Residential-Builder
259,370 310,907 -16.6 % 289,375 -10.4 % Commercial
223,916 266,981
-16.1 % 247,695
-9.6 % Total Real
estate-construction: $ 506,333 $ 602,196 -15.9 % $ 561,189 -9.8 %
Farmland 2,678 2,003 33.7 % 2,498 7.2 % Consumer
10,532 7,641
37.8 % 9,934
6.0 % Total loans $ 2,260,867 $ 2,215,588
2.0 % $ 2,285,365 -1.1 % Less unearned income 3,944 5,126 -23.1 %
3,911 0.8 % Less allowance for loan losses
38,978 26,103
49.3 % 37,494
4.0 % Loans, net $ 2,217,945 $ 2,184,359
1.5 % $ 2,243,960 -1.2 % As of June 30, 2009
Residential, Acquisition,
Development and Construction
Non-accruals Net charge- Total Percentage Non-accrual as a % of
offs as a % of
By County/Jurisdiction of Origination:
Outstandings of Total Loans Outstandings
Outstandings District of Columbia $ 19,958 7.1 % $ -- -- --
Montgomery. MD 11,069 3.9 % 4,413 1.6 % 0.7 % Prince Georges, MD
33,885 12.0 % 10,016 3.5 % 1.3 % Other Counties in MD 5,711 2.0 %
344 0.1 % 0.4 % Arlington/Alexandria, VA 48,225 17.1 % 5,698 2.0 %
-- Fairfax, VA 73,948 26.2 % 15,347 5.4 % 0.5 % Culpeper/Fauquier,
VA 1,762 0.6 % 320 0.1 % -- Frederick, VA 6,750 2.4 % 6,750 2.4 %
0.8 % Loudoun, VA 29,280 10.4 % 770 0.3 % 0.2 % Prince William, VA
13,083 4.6 % 4,009 1.4 % 0.2 % Spotsylvania, VA 1,491 0.5 % -- --
-- Stafford, VA 21,851 7.7 % 4,898 1.7 % -- Other Counties in VA
15,293 5.4 % 3,075 1.1 % 0.3 % Outside VA, D.C. & MD
111 0.0 %
-- --
0.4 % $ 282,417 100.0 % $ 55,640 19.7 %
4.8 %
As of June 30, 2009
Commercial, Acquisition, Development and Construction
Non-accruals Net charge- Total Percentage Non-accrual as a % of
offs as a % of
By County/Jurisdiction of Origination:
Outstandings of Total Loans Outstandings
Outstandings District of Columbia $ 11,315 5.1 % $ -- -- --
Montgomery. MD 1,422 0.6 % -- -- -- Prince Georges, MD 10,155 4.5 %
-- -- -- Other Counties in MD 7,747 3.5 % -- -- --
Arlington/Alexandria, VA 3,220 1.4 % -- -- -- Fairfax, VA 25,357
11.3 % 1,513 0.7 % 4.6 % Henrico, VA 11,798 5.3 % -- -- -- Loudoun,
VA 42,049 18.8 % 15,181 6.8 % -- Prince William, VA 57,112 25.5 %
2,261 1.0 % -- Spotsylvania, VA 10,498 4.7 % -- -- -- Stafford, VA
37,489 16.7 % -- -- -- Other Counties in VA
5,754 2.6 %
-- --
-- $ 223,916 100.0 % $ 18,955 8.5 % 4.6 %
As of June 30,
2009 2008 % Change 3/31/09 % Change
Investment Securities (at book value):
Available-for-sale: U.S. Government Agency obligations $ 204,896 $
262,724 -22.0 % $ 239,346 -14.4 % Domestic corporate debt
obligations 1,864 6,786 -72.5 % 1,239 50.4 % Obligations of states
and political subdivisions 40,219 29,242 37.5 % 33,473 20.2 %
Restricted stock: Federal Reserve Bank 5,597 1,442 288.1 % 5,597 --
Federal Home Loan Bank 6,010 6,459 -7.0
%
6,009 -- Community Bankers’ Bank
145
55 163.6
%
145 -- $ 258,731 $
306,708 -15.6 % $ 285,809 -9.5 % Held-to-maturity: U.S. Government
Agency obligations $ 15,258 $ 20,974 -27.3 % $ 17,382 -12.2 %
Obligations of states and political subdivisions
46,853 18,721
150.3 % 48,281
3.0 % $ 62,111 $ 39,695 56.5 % $ 65,663
-5.4 %
(1) Computed by dividing non-interest
expense by the sum of net interest income on a tax equivalent basis
using a 35% rate and non-interest income.
Virginia Commerce Bancorp, Inc. Consolidated Balance Sheets
(Dollars in thousands, except per share data) As of June 30,
(Unaudited) 2009
2008
Assets Cash and due from banks $ 31,693 $ 44,068
Interest-bearing deposits with other banks -- 16,715 Securities
(fair value: 2009, $322,100; 2008, $346,485) 320,842 346,403
Federal funds sold 22,999 -- Loans held-for-sale 12,940 3,415
Loans, net of allowance for loan losses of $38,978 in 2009 and
$26,103 in 2008 2,217,945 2,184,359 Bank premises and equipment,
net 14,601 13,601 Accrued interest receivable 9,826 10,992 Other
assets 68,648 35,864 Total assets $
2,699,494 $ 2,655,417
Liabilities and
Stockholders’ Equity Deposits Demand deposits $ 239,658
$ 203,362 Savings and interest-bearing demand deposits 759,861
567,757 Time deposits 1,191,954 1,328,167
Total deposits $ 2,191,473 $ 2,099,286 Securities sold under
agreement to repurchase and federal funds purchased 165,730 278,895
Other borrowed funds 25,000 50,000 Trust preferred capital notes
65,929 41,244 Accrued interest payable 5,237 7,329 Other
liabilities 3,112 3,300 Total
liabilities $ 2,456,481 $ 2,480,054
Stockholders’
Equity Preferred stock, net of discount, $1.00 par, 1,000,000
shares authorized, Series A; $1,000.00 stated value; 71,000 issued
and outstanding $ 63,267 $ --
Common stock, $1.00 par,
50,000,000 shares authorized, issued and outstanding 2009,
26,693,074; 2008, 26,566,711
26,693 26,567 Surplus 96,200 94,244 Warrants 8,520 -- Retained
earnings 50,904 56,777 Accumulated other comprehensive loss, net
(2,571 ) (2,225 ) Total stockholders’ equity $
243,013 $ 175,363 Total liabilities and stockholders’ equity $
2,699,494 $ 2,655,417 Virginia Commerce
Bancorp, Inc. Consolidated Statements of Operations (Dollars in
thousands except per share data) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30,
2009 2008 2009 2008
Interest and dividend
income: Interest and fees on loans $ 33,186 $
35,935 $ 66,629 $ 71,826 Interest and dividends on investment
securities: Taxable 3,495 3,769 7,157 7,548 Tax-exempt 406 298 751
569 Dividends 84 100 168 192 Interest on deposits with other banks
- 85 - 102 Interest on federal funds sold 12
213 32 226 Total interest
and dividend income $ 37,183 $ 40,400 $ 74,737
$ 80,463
Interest expense: Deposits $ 12,796 $
17,307 $ 27,427 $ 35,337
Securities sold under agreement to
repurchase and federal funds purchased
835 1,418 1,455 3,101 Other borrowed funds 269 270 534 464 Trust
preferred capital notes 1,283 691
2,564 1,382 Total interest
expense $ 15,183 $ 19,686 $ 31,980
$ 40,284
Net interest income: $ 22,000 $ 20,714 $
42,757 $ 40,179 Provision for loan losses 18,423
3,656 31,813 7,768
Net interest income after provision for loan losses $ 3,577
$ 17,058 $ 10,944 $ 32,411
Non-interest income: Service charges and other fees $ 903 $
945 $ 1,790 $ 1,866 Non-deposit investment services commissions 122
199 279 349 Fees and net gains on loans held-for-sale 952 415 1,759
851 Impairment loss on securities (108 ) -- (138 ) -- Other
80 170 79
294 Total non-interest income $ 1,949 $ 1,729
$ 3,769 $ 3,360
Non-interest expense: Salaries
and employee benefits $ 5,694 $ 5,853 $ 11,615 $ 11,709 Occupancy
expense 2,437 2,167 5,204 4,314 Data processing expense 576 542
1,176 1,081 Other operating expense 4,879
2,644 8,614 4,894 Total
non-interest expense $ 13,586 $ 11,206 $
26,609 $ 21,998 (Loss) income before taxes $ (8,060 )
$ 7,581 $ (11,896 ) $ 13,773 (Benefit) provision for income taxes
(2,876 ) 2,660 (4,303 )
4,704
Net (loss) income $ (5,184 ) $ 4,921
$ (7,593 ) $ 9,069 Effective dividend on preferred
stock 1,251 -- $ 2,037
--
Net (loss) income available to common
stockholders $ (6,435 ) $ 4,921 $ (9,630 ) $ 9,069 Earnings per
common share, basic (1) $ (0.24 ) $ 0.18 $ (0.36 ) $ 0.34 Earnings
per common share, diluted (1) $ (0.24 ) $ 0.18 $ (0.36 ) $ 0.33
Virginia Commerce Bancorp, Inc. Consolidated Average
Balances, Yields, and Rates Three Months Ended June 30, (Unaudited)
2009 2008 (Dollars in
thousands)
Average
Balance
Interest
Income-
Expense
Average
Yields
/Rates
Average
Balance
Interest
Income-
Expense
Average
Yields
/Rates
Assets Securities (1) $ 334,487
$ 3,985 4.93 % $ 331,321 $ 4,167 5.14 % Loans, net of unearned
income (2) 2,294,007 33,186 5.81 % 2,150,165 35,935 6.71 %
Interest-bearing deposits in other banks 79 -- 0.12 % 13,311 85
2.58 % Federal funds sold 27,400 12
0.17 % 41,595 213 2.03 %
Total
interest-earning assets $ 2,655,973 $ 37,183 5.65 % $ 2,536,392
$ 40,400 6.41 % Other assets 60,769 54,700
Total
Assets $ 2,716,742 $ 2,591,092
Liabilities and
Stockholders’ Equity Interest-bearing deposits: NOW accounts $
229,785 $ 717 1.25 % $ 167,541 $ 689 1.65 % Money market accounts
160,923 573 1.43 % 212,071 1,437 2.72 % Savings accounts 304,347
1,720 2.27 % 180,939 1,367 3.03 % Time deposits 1,264,340
9,786 3.10 % 1,346,262
13,814 4.12 % Total interest-bearing deposits $ 1,959,395 $
12,796 2.62 % $ 1,906,813 $ 17,307 3.64 %
Securities sold under agreement to
repurchase and federal funds purchased
187,897 835 1.78 % 231,347 1,418 2.46 % Other borrowed funds 25,000
269 4.25 % 25,275 270 4.23 % Trust preferred capital notes
65,898 1,283 7.70 % 40,000
691 6.83 %
Total interest-bearing liabilities
$ 2,238,190 $ 15,183 2.72 % $ 2,203,435 $ 19,686 3.58 % Demand
deposits and other liabilities 229,881 211,168
Total liabilities $ 2,468,071 $ 2,414,603 Stockholders’
equity 248,671 176,489
Total liabilities and
stockholders’ equity $ 2,716,742 $ 2,591,092 Interest rate
spread 2.93 % 2.83 % Net interest income and margin $ 22,000 3.35 %
$ 20,714 3.30 %
(1) Yields on securities
available-for-sale have been calculated on the basis of historical
cost and do not give effect to changes in the fair value of those
securities, which are reflected as a component of stockholders’
equity. Average yields on securities are stated on a tax equivalent
basis, using a 35% rate.
(2) Loans placed on non-accrual status are
included in the average balances. Net loan fees and late charges
included in interest income on loans totaled $892 thousand and $1.4
million for the three months ended June 30, 2009 and 2008,
respectively.
Virginia Commerce Bancorp, Inc. Consolidated Average
Balances, Yields, and Rates Six Months Ended June 30, (Unaudited)
2009 2008 (Dollars in
thousands)
Average
Balance
Interest
Income-
Expense
Average
Yields
/Rates
Average
Balance
Interest
Income-
Expense
Average
Yields
/Rates
Assets Securities (1) $ 336,576
$ 8,076 4.95 % $ 326,155 $ 8,309 5.20 % Loans, net of unearned
income (2) 2,303,301 66,629 5.84 % 2,090,394 71,826 6.90 %
Interest-bearing deposits in other banks 91 -- 0.12 % 7,340 102
2.79 % Federal funds sold 34,354 32
0.18 % 21,899 226 2.04 %
Total
interest-earning assets $ 2,674,322 $ 74,737 5.66 % $ 2,445,788
$ 80,463 6.62 % Other assets 57,411 58,133
Total
Assets $ 2,731,733 $ 2,503,921
Liabilities and
Stockholders’ Equity Interest-bearing deposits: NOW accounts $
210,409 $ 1,326 1.27 % $ 156,930 $ 1,201 1.53 % Money market
accounts 155,362 1,151 1.49 % 209,303 3,093 2.96 % Savings accounts
273,059 3,159 2.33 % 172,887 2,808 3.26 % Time deposits
1,343,894 21,791 3.27 % 1,281,000
28,235 4.42 % Total interest-bearing deposits
$ 1,982,724 $ 27,427 2.79 % $ 1,820,120 $ 35,337 3.89 % Securities
sold under agreement to repurchase and federal funds purchased
186,561 1,455 1.57 % 232,771 3,101 2.67 % Other borrowed funds
25,000 534 4.25 % 25,138 464 3.66 % Trust preferred capital notes
65,865 2,564 7.74 % 40,000
1,382 6.83 %
Total interest-bearing
liabilities $ 2,260,150 $ 31,980 2.85 % $ 2,118,029 $ 40,284
3.81 % Demand deposits and other liabilities 221,005
211,456
Total liabilities $ 2,481,155 $ 2,329,485
Stockholders’ equity 250,578 174,436
Total
liabilities and stockholders’ equity $ 2,731,733 $ 2,503,921
Interest rate spread 2.81 % 2.81 % Net interest income and margin $
42,757 3.25 % $ 40,179 3.32 %
(1) Yields on securities
available-for-sale have been calculated on the basis of historical
cost and do not give effect to changes in the fair value of those
securities, which are reflected as a component of stockholders’
equity. Average yields on securities are stated on a tax equivalent
basis, using a 35% rate.
(2) Loans placed on non-accrual status are
included in the average balances. Net loan fees and late charges
included in interest income on loans totaled $1.7 million and $2.7
million for the six months ended June 30, 2009 and 2008,
respectively.
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