Virginia Commerce Bancorp, Inc. (the “Company”), (Nasdaq: VCBI),
parent company of Virginia Commerce Bank (the “Bank”), today
reported net income to common stockholders of $4.3 million, or
$0.15 per diluted common share, for the second quarter of 2010,
compared with a net loss of $6.4 million, or $0.24 per diluted
common share, for the same period in 2009. Lower loan loss
provisions and a higher net interest margin drove the
year-over-year increase in earnings, while non-performing assets
and loans 90+ days past due declined $17.2 million during the
quarter.
Peter A. Converse, Chief Executive Officer, commented, “It is
gratifying to be able to report a third consecutive quarter of
improved earnings as well as a meaningful reduction in
non-performing assets. We are certainly encouraged by the earnings
progress year-to-date as net income available to common
stockholders for the six months ended June 30 exceeded $7.5 million
as compared to a net loss of $9.6 million for the same period last
year. The turnaround continues to benefit from lower provisioning
expense and strong core earnings.”
Converse continued, “We remain optimistic that we can sustain
the positive metrics that are driving our performance, especially
our higher net interest margin and strong efficiency ratio.
Additionally, continued progress in working through our problem
assets should enable us to realize further reductions in loan loss
provisioning and other credit costs. We still feel the most likely
case for year-end NPAs and loans 90+ days past due to total assets
will be in the 2.00 to 2.50% range.”
“The prospects for enhancing our banking franchise and
stockholder value appear to be on the right track. We look forward
to taking advantage of market opportunities as the economy
strengthens.”
SUMMARY REVIEW OF FINANCIAL PERFORMANCE
Net Income (Loss)
For the three months ended June 30, 2010, the Company recorded
net income of $5.6 million. After an effective dividend of $1.3
million to the U.S. Treasury on preferred stock, the Company
reported net income to common stockholders of $4.3 million, or
$0.15 per diluted common share, compared to a net loss to common
stockholders of $6.4 million, or $0.24 per diluted common share, in
the second quarter of 2009. For the six months ended June 30, 2010,
the Company reported net income to common stockholders of $7.5
million, or $0.26 per diluted common share, compared to a net loss
to common stockholders of $9.6 million for the same period in 2009.
Earnings improvement for both the three-and six-month periods were
attributable to lower provisions for loan losses and a higher net
interest margin.
Core operating earnings for the three months ended June 30,
2010, were $14.2 million, up $3.7 million, or 36.1%, compared to
$10.5 million for the three months ended June 30, 2009. On a
sequential basis, core operating earnings were up $1.8 million for
the three months ended June 30, 2010. The Company calculates core
operating earnings by excluding taxes, provisions for loan losses,
losses on other real estate owned and losses on securities from net
income.
Asset Quality and Provisions For Loan Losses
Provisions for loan losses were $4.2 million for the quarter
ended June 30, 2010, compared to $18.4 million in the same period
in 2009, with total net charge-offs of $4.3 million in the second
quarter of 2010 versus $16.9 million for the same period a year
ago. For the six months ended June 30, 2010, provisions for loan
losses totaled $8.4 million compared to $31.8 million for the prior
year period, with 2010 year-to-date net charge-offs of $11.2
million significantly reduced from $29.3 million in the first half
of 2009.
Total non-performing assets and loans 90+ days past due declined
from $139.6 million at June 30, 2009, to $91.6 million at June 30,
2010, and decreased $17.2 million sequentially from $108.8 million
at March 31, 2010. As of June 30, 2010, the allowance for loan
losses represented 2.77% of total loans, up slightly from 2.75% at
March 31, 2010, with such allowance covering 95.7% of total
non-performing loans.
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. Overall, as of
June 30, 2010, $37.8 million, or 58.0%, of non-performing loans
represented acquisition, development and construction (“ADC”)
loans, $16.3 million, or 25.1%, represented non-farm,
non-residential loans, $5.6 million, or 8.6%, represented
commercial and industrial loans and $5.3 million, or 8.1%,
represented loans on one-to-four family residential properties.
Charge-offs for the quarter were impacted by $2.5 million in
recoveries realized from continued collection activities, the most
significant of which totaled $1.9 million relating to the sale of
business assets of a retirement community developer to an acquiring
entity.
Included in the loan portfolio are loans classified as troubled
debt restructurings (“TDRs”) totaling $97.0 million. These loans
represent situations in which a modification to the contractual
interest rate or repayment structure has been granted to address a
financial hardship. These loans make up 4.3% of the total loan
portfolio and represent $48.6 million in ADC loans, $31.2 million
in non-farm, non-residential real estate loans, $11.8 million in
commercial loans and $5.3 million in one-to four family residential
loans. TDRs at quarter-end included only one loan in the amount of
$624 thousand which was over 30 days past due based upon modified
terms.
Net Interest Income
Net interest income of $26.2 million for the second quarter of
2010 was up $4.2 million, or 19.2% over the same quarter last year,
due primarily to an increase in the net interest margin from 3.35%
in the second quarter of 2009 to 3.89% for the current three-month
period. Year-to-date net interest income of $51.0 million was up
19.4%, compared to $42.8 million in 2009. On a sequential basis,
the margin was up ten basis points. The year-over-year increases in
the net interest margin were driven by lower deposit costs due to
significant reductions in the level of time deposits, and increased
levels of demand deposits and lower rate interest-bearing
transaction accounts. As a result, the average cost of
interest-bearing deposits fell from 2.72% in the second quarter of
2009, to 1.89% in the second quarter of 2010, while the yield on
interest-earning assets declined only fifteen basis points from
5.65% to 5.50%. Management anticipates the net interest margin will
range between 3.7% and 3.9% over the remainder of the year.
Non-Interest Income (Loss)
For the three months ended June 30, 2010, the Company recognized
$28 thousand of non-interest income, down from $1.9 million for the
three months ended June 30, 2009. The Company recognized a
non-interest loss of $283 thousand for the six months ended June
30, 2010, compared to non-interest income of $3.8 million for the
same period in 2009. Non-interest income for the second quarter
includes $1.1 million in losses on other real estate owned and $668
thousand in impairment losses on securities, while in the second
quarter of 2009, non-interest income included $108 thousand in
impairment losses on securities and no losses on other real estate
owned. Non-interest income generated by service charges and other
fees, non-deposit investment services commissions, fees and net
gains on mortgage loans held for sale, and gain on sale of
securities decreased $287 thousand during the second quarter of
2010 from the first quarter of 2010, and decreased by $839 thousand
for the six months ended June 30, 2010, from the same period last
year.
Non-Interest Expense
Non-interest expense increased $142 thousand, or 1.0%, from
$13.6 million in the second quarter of 2009 to $13.7 million in the
second quarter of 2010, and was up $908 thousand, or 3.4%, from
$26.6 million for the six months ended June 30, 2009, to $27.5
million year-to-date June 30, 2010. Compared to the first quarter
of 2010, non-interest expense was down $61 thousand. The majority
of the year-over-year increases were due to higher legal and
professional services expenses associated with the collection of
non-performing loans and higher expenses on other real estate
owned. As a result of a minimal increase in overhead and higher
levels of net interest income, the efficiency ratio improved from
56.7% in the second quarter of 2009 to 50.3% in the second quarter
of 2010.
Investment Securities
Investment securities increased $70.1 million, or 22.7%,
year-over-year to $379.2 million at June 30, 2010, and were up
$45.1 million sequentially from March 31, 2010. U.S. Government
agency securities, including callable step-up bonds and
collateralized mortgage obligations (CMOs) comprised a majority of
the increases as slower loan growth and increases in deposits
provided higher levels of investable funds. The portfolio contains
four pooled trust preferred securities with an amortized cost basis
of $6.3 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 an
aggregate impairment loss of $668 thousand on three of the four
pools in the second quarter of 2010, and an aggregate of $3.3
million to date.
Loans
Loans, net of allowance for loan losses, decreased $30.0
million, or 1.4%, from $2.22 billion at June 30, 2009, to $2.19
billion at June 30, 2010. Non-farm, non-residential real estate
loans increased $98.8 million, or 9.5%, and one-to-four family
residential loans increased $49.9 million, or 13.5%, while
acquisition, development and construction loans fell by $127.4
million, or 25.2%, and commercial loans were down $42.0 million, or
16.1%. Sequentially, net loans were down $15.2 million, or 0.7%.
Year-over-year loan production has been negatively impacted by
lower economic activity and demand for credit in both the business
and consumer sectors, a reallocation of lending personnel to
problem loan identification and resolution and a strategic decision
to restrict acquisition, development and construction lending and
focus on deposit generation and non-credit products. Lending
efforts are being focused on building greater market share in
commercial lending, especially in sectors forecast for growth, such
as government contract lending, professional practices and
associations and select service industries, with strategic hiring,
marketing campaigns and calling efforts.
Deposits
For the twelve months ended June 30, 2010, deposits increased
$122.6 million, or 5.6%, to $2.31 billion, with demand deposits
increasing $14.8 million, or 6.2%, savings and interest-bearing
demand deposits increasing by $435.1 million, or 57.3%, and time
deposits falling $327.3 million, or 27.5%. Sequentially, deposits
rose $14.1 million, or 0.6%, with demand deposits increasing by
$22.7 million, or 9.8%, savings and interest-bearing demand
accounts growing $106.7 million, or 9.8%, and time deposits
decreasing by $115.4 million, or 11.8%. The increases in demand
deposits are primarily due to successful deposit gathering efforts
led by the Company’s team of eight business development officers
who are focused on acquisition and retention of commercial
operating funds, cash management services and other related
cross-sales. The increases in savings and interest-bearing demand
deposits were due primarily to success with the Company’s MEGA
Savings and MEGA Checking account products as well as its Premier
Interest Checking for non-profits. The declines in time deposits
are reflective of lower loan volume requiring lower levels of
funding, and strategic pricing of certificates of deposits relative
to both the competitive market and the Company’s pricing on
interest-bearing transaction accounts. The proportionate share of
time deposits to total deposits has declined from a peak of 67.2%
at year-end 2008 to 37.4% as of June 30, 2010. Brokered
certificates of deposit represent $60.1 million of total time
deposits, or 2.6% of total deposits, at June 30, 2010.
Capital Levels and Stockholders’ Equity
Stockholders’ equity decreased $12.7 million, or 5.2%, from
$243.0 million at June 30, 2009 to $230.3 million at June 30, 2010,
with a net loss to common stockholders of $20.7 million over the
twelve-month period, a $5.5 million increase in other comprehensive
income related to the investment securities portfolio, and $1.1
million in proceeds and tax benefits related to the exercise of
options by Company directors and officers, and stock option expense
credits. As a result of these changes, the Company’s Tier 1 capital
ratio decreased from 12.72% at June 30, 2009, to 12.13% at June 30,
2010, and its total qualifying capital ratio decreased from 13.97%
to 13.38%. The Bank’s ratios declined by similar levels.
Sequentially, the Company’s and Bank’s Tier 1 and total qualifying
capital ratios are up 22 and 28 basis points, respectively.
RUSSELL
2000® INDEX
The Company also announced that it has been added to the Russell
2000® Index and the Russell 3000® Index in connection with the
annual rebalancing of the Russell family of indices by Russell
Investments. The annual rebalancing captures the 3,000 largest U.S.
stocks as of the end of May, ranking them by total market
capitalization. The largest 1,000 companies in this ranking
comprise the Russell 1000® Index, and the next 2,000 companies
become the Russell 2000. The Russell indices are used by investment
managers and institutional investors for index funds and as
benchmarks for both passive and active investment strategies.
CONFERENCE CALL
The Company will host a teleconference call for the financial
community on July 19, 2010, at 10:00 a.m. Eastern Daylight Time to
discuss the second quarter 2010 financial results. The public is
invited to listen to this conference call by dialing 866-244-4629
at least 10 minutes prior to the call.
A replay of the conference call will be available from 1:00 p.m.
Eastern Daylight Time on July 19, 2010, until 11:59 p.m. Eastern
Daylight Time on July 26, 2010. The public is invited to listen to
this conference call replay by dialing 888-266-2081 and entering
access code 1470538.
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-eight branch
offices, one residential mortgage office and one wealth management
services office, principally to individuals and small-to-medium
size businesses in Northern Virginia and the Metropolitan
Washington, D.C. area.
NON-GAAP
PRESENTATIONS
The Company prepares its financial statements under accounting
principles generally accepted in the United States, or “GAAP”.
However, this press release also refers to certain non-GAAP
financial measures that we believe, when considered together with
GAAP financial measures, provide investors with important
information regarding our operational performance. An analysis of
any non-GAAP financial measure should be used in conjunction with
results presented in accordance with GAAP.
Core operating earnings is a non-GAAP financial measure that
reflects net income excluding taxes, loan loss provisions, losses
on other real estate owned and impairment losses on securities from
net income. These excluded items are difficult to predict and we
believe that core operating earnings provides the Company and
investors with a valuable measure of the performance of the
Company’s operational performance and a valuable tool to evaluate
the Company’s financial results.
The adjusted efficiency ratio is a non-GAAP financial measure
that is computed by dividing non-interest expense by the sum of net
interest income on a tax equivalent basis and non-interest income
before losses on other real estate owned. We believe that this
measure provides investors with important information about our
operating efficiency. Comparison of our adjusted efficiency ratio
with those of other companies may not be possible because other
companies may calculate the adjusted efficiency ratio
differently.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
This press release contains 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, including but not limited to our outlook on earnings,
including our future net interest margin, and statements regarding
asset quality, projected growth, capital position, our plans
regarding and expected future levels of our non-performing assets,
business opportunities in our markets, and general economic
conditions. When we use words such as “may”, “will”, “anticipates”,
“believes”, “expects”, “plans”, “estimates”, “potential”,
“continue”, “should”, and similar words or phrases, you should
consider them as identifying forward-looking statements. These
forward-looking statements are not guarantees of future
performance. 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 release 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,
2010 2009
% Change 2010 2009
% Change Summary Operating Results: Interest and
dividend income $ 37,161 $ 37,183 -0.1 % $ 73,888 $ 74,737 -1.1 %
Interest expense 10,940 15,183 -27.9 % 22,851 31,980 -28.5 % Net
interest income 26,221 22,000 19.2 % 51,037 42,757 19.4 % Provision
for loan losses 4,200 18,423 -77.2 % 8,438 31,813 -73.5 %
Non-interest income (charges) 28 1,949 -98.6 % (283 ) 3,769 -107.5
% Non-interest expense 13,728 13,586 1.0 % 27,517 26,609 3.4 %
Income (loss) before income taxes 8,321 (8,060 ) -203.2 % 14,799
(11,896 ) -224.4 % Net income (loss) $ 5,571 $ (5,184 ) -207.5 % $
10,040 $ (7,593 ) -232.2 % Effective dividend on preferred stock
1,251 1,251 0.0 % 2,502 2,038 22.8 % Net income (loss) available to
common stockholders $ 4,320 $ (6,435 ) -167.1 % $ 7,538 $ (9,631 )
-178.3 %
Performance Ratios: Return on average assets
0.79 % -0.77 % 0.72 % -0.56 % Return on average equity 9.82 % -8.36
% 9.01 % -6.11 % Net interest margin 3.89 % 3.35 % 3.84 % 3.25 %
Efficiency ratio, adjusted (1) 50.3 % 56.7 % 52.2 % 57.2 %
Per Share Data: Earnings (loss) per common share-basic $
0.16 $ (0.24 ) 166.7 % $ 0.28 $ (0.36 ) 177.8 % Earnings (loss) per
common share-diluted $ 0.15 $ (0.24 ) 162.5 % $ 0.26 $ (0.36 )
172.2 % Average number of shares outstanding: Basic 26,945,284
26,691,430 26,939,603 26,693,074 Diluted 28,553,907 26,909,417
28,282,392 27,001,579 As of June 30,
2010 2009 % Change 03/31/10
12/31/09
Selected Balance Sheet Data: Loans, net $ 2,187,912
$ 2,217,945 -1.4 % $ 2,203,156 $ 2,210,064 Investment securities
379,212 309,090 22.7 % 334,160 348,585 Assets 2,826,807 2,699,494
4.7 % 2,803,004 2,725,297 Deposits 2,314,086 2,191,473 5.6 %
2,299,989 2,229,327 Stockholders’ equity 230,331 243,013 -5.2 %
224,259 218,868 Book value per common share $ 5.91 $ 6.44 -8.2 % $
5.69 $ 5.53
Capital Ratios (% of risk weighted
assets): Tier 1 capital: Company 12.13 % 12.72 % 11.91 % 11.48 %
Bank 12.09 % 12.68 % 11.81 % 11.41 % Total qualifying capital:
Company 13.38 % 13.97 % 13.16 % 12.73 % Bank 13.34 % 13.93 % 13.06
% 12.66 % Tier 1 leverage: Company 10.37 % 11.39 % 10.34 % 10.29 %
Bank 10.36 % 11.35 % 10.29 % 10.23 % Tangible common equity:
Company 5.86 % 6.66 % 5.70 % 5.68 % Bank 10.39 % 11.34 % 10.20
% 10.32 % (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 before losses on other real estate owned.
As of June 30,
2010 2009 03/31/10 12/31/09
Asset
Quality: Non-performing assets: Non-accrual loans: Commercial $
5,346 $ 12,259 $ 9,931 $ 6,929 Real estate-one-to-four family
residential: Closed end first and seconds 4,369 3,843 4,610 5,769
Home equity lines
630
494 693
420 Total Real estate-one-to-four family
residential $ 4,999 $ 4,337 $ 5,303 $ 6,189 Real
estate-multi-family residential -- -- -- -- Real estate-non-farm,
non-residential: Owner Occupied 8,045 6,462 9,019 8,600 Non-owner
occupied
8,298 8,460
14,871 6,506
Total Real estate-non-farm, non-residential $ 16,343 $
14,922 $ 23,890 $ 15,106 Real estate-construction:
Residential-Owner Occupied -- 2,389 -- 517 Residential-Builder
30,877 53,251 36,078 30,110 Commercial
6,911
18,955 6,911
6,911 Total Real
estate-construction: $ 37,788 $ 74,595 $ 42,989 $ 37,538 Consumer
122 23
119 47 Total
Non-accrual loans 64,598 106,136 $ 82,232 $ 65,809 OREO
26,477 28,198
26,269 28,499 Total
non-performing assets $ 91,075 $ 134,334 $ 108,501 $ 94,308
Loans 90+ days past due and still accruing: Commercial $ 264 $ 251
$ 45 $ 3,797 Real estate-one-to-four family residential: Closed end
first and seconds 280 482 238 -- Home equity lines
-- --
-- -- Total Real
estate-one-to-four family residential $ 280 $ 482 $ 238 $ -- Real
estate-multi-family residential -- 1,506 -- -- Real
estate-non-farm, non-residential: Owner Occupied -- -- -- --
Non-owner occupied
--
703 --
-- Total Real estate-non-farm, non-residential
$ -- $ 703 $ -- $ -- Real estate-construction: Residential-Owner
Occupied -- -- -- -- Residential-Builder -- 2,290 26 26 Commercial
-- --
-- -- Total Real
estate-construction: $ -- $ 2,290 $ 26 $ 26 Consumer
-- --
9 3 Total loans 90+
days past due and still accruing $ 544 $ 5,232 $ 318 $ 3,826
Total non-performing assets and past due loans $ 91,619 $ 139,566 $
108,819 $ 98,134 Troubled debt restructurings $ 96,976 $
31,787 $ 80,993 $ 71,885 Non-performing assets to total
loans: 4.04 % 5.94 % 4.78 % 4.14 % to total assets: 3.22 % 4.98 %
3.87 % 3.46 % Non-performing assets and past due loans to total
loans: 4.06 % 6.18 % 4.79 % 4.31 % to total assets: 3.24 % 5.17 %
3.88 % 3.60 % Allowance for loan losses to total loans 2.77 % 1.72
% 2.75 % 2.86 % Allowance for loan losses to non-performing loans
95.71 % 35.00 % 75.60 % 93.56 % Total allowance for loan
losses $ 62,345 $ 38,978 $ 62,407 $ 65,152
As of June 30,
2010 2009 03/31/10 12/31/09
Loans 30 to 89 days past due Commercial $ 73 $ 3,442 $ 393 $
866 Real estate-one-to-four family residential: Closed end first
and seconds 3,374 6,317 1,233 352 Home equity lines
830 559
3,225 139 Total Real
estate-one-to-four family residential $ 4,204 $ 6,876 $ 4,458 $ 491
Real estate-multi-family residential -- -- -- -- Real
estate-non-farm, non-residential: Owner Occupied 1,612 3,932 2,184
1,854 Non-owner occupied
2,129
4,749 5,277
-- Total Real estate-non-farm, non-residential
$ 3,741 $ 8,681 $ 7,461 $ 1,854 Real estate-construction:
Residential-Owner Occupied -- -- -- -- Residential-Builder 2,270 --
1,079 1,370 Commercial
--
-- --
-- Total real estate-construction: $ 2,270 $ --
$ 1,079 $ 1,370 Farmland -- -- -- -- Consumer
55 244
110 141 Total loans
30 to 89 days past due $ 10,343 $ 19,243 $ 13,501 $ 4,722
For six months ended
June 30,
For three
months
ended
For twelve
months
ended
2010 2009 03/31/10 12/31/09 Net charge-offs
Commercial $ 3,748 $ 3,176 $ 2,491 $ 15,578 Real estate-one-to-four
family residential: Closed end first and seconds 2,249 1,156 1,964
1,825 Home equity lines
88
824 (14 )
1,465 Total Real estate-one-to-four
family residential $ 2,337 $ 1,980 $ 1,950 $ 3,290 Real
estate-multi-family residential -- -- -- -- Real estate-non-farm,
non-residential: Owner Occupied 1,273 211 760 1,901 Non-owner
occupied
1,336 --
188 58
Total Real estate-non-farm, non-residential $ 2,609 $ 211 $ 948 $
1,959 Real estate-construction: Residential-Owner Occupied 116 702
116 1,012 Residential-Builder 2,581 12,896 953 17,556 Commercial
(283 ) 10,223
(125 )
13,492 Total real estate-construction: $ 2,414
$ 23,821 $ 944 $ 32,060 Farmland -- -- -- -- Consumer
138 122
650 349 Total net
charge-offs $ 11,246 $ 29,310 $ 6,983 $ 53,236 Net charge-offs to
average loans outstanding 0.49 % 1.27 % 0.31 % 2.34 % Total
provision for loan losses $ 8,438 $ 31,813 $ 4,238 $ 81,913
As of June 30,
2010 2009 % Change 03/31/10 % Change
Loan Portfolio: Commercial $ 217,859 $ 259,812 -16.1
% $ 224,498 -2.9 % Real estate-one to four family residential:
Closed end first and seconds 284,118 236,523 20.1 % 278,708 1.9 %
Home equity lines
135,508
133,176 1.8 %
134,638 0.6 % Total Real
estate-one-to-four family residential $ 419,626 $ 369,699 13.5 % $
413,346 1.5 % Real estate-multifamily residential 84,453 69,616
21.3 % 72,560 16.4 % Real estate-non-farm, non-residential: Owner
Occupied 483,032 428,372 12.8 % 464,338 4.0 % Non-owner occupied
657,957 613,825
7.2 % 659,687
-0.3 % Total Real estate-non-farm,
non-residential $ 1,140,989 $ 1,042,197 9.5 % $ 1,124,025 1.5 %
Real estate-construction: Residential-Owner Occupied 16,792 23,047
-27.1 % 17,707 -5.2 % Residential-Builder 182,962 259,370 -29.5 %
210,600 -13.1 % Commercial
179,192
223,916 -20.0 %
194,019 -7.6 % Total Real
estate-construction: $ 378,946 $ 506,333 -25.2 % $ 422,326 -10.3 %
Farmland 2,299 2,678 -14.2 % 2,673 -14.0 % Consumer
9,969 10,532 -5.3
% 10,014 -0.5
% Total loans $ 2,254,141 $ 2,260,867 -0.3 % $
2,269,442 -0.7 % Less unearned income 3,884 3,944 -1.5 % 3,879 0.1
% Less allowance for loan losses
62,345
38,978 59.9 %
62,407 -0.1 % Loans, net $
2,187,912 $ 2,217,945 -1.4 % $ 2,203,156 -0.7 %
As of June 30, 2010
Residential, Acquisition, Development
and Construction
By County/Jurisdiction of
Origination:
Total
Outstandings
Percentage
of Total
Non-accrual
Loans
Non-accruals
as a % of
Outstandings
Net charge-
offs as a % of
Outstandings
District of Columbia $ 4,523 2.3 % $ -- -- --
Montgomery, MD 6,459 3.2 % 5,157 2.6 % 0.5 % Prince Georges, MD
21,830 10.9 % 1,390 0.7 % -- Other Counties in MD 5,081 2.5 % -- --
0.1 % Arlington/Alexandria, VA 36,958 18.5 % 3,669 1.8 % --
Fairfax, VA 48,462 24.4 % 4,301 2.2 % 0.5 % Culpeper/Fauquier, VA
4,453 2.2 % 3,368 1.7 % 0.2 % Frederick, VA 6,281 3.1 % 6,250 3.1 %
-- Loudoun, VA 27,784 13.9 % 770 0.4 % -- Prince William, VA 7,294
3.7 % 1,073 0.5 % -- Spotsylvania, VA 562 0.3 % -- -- -- Stafford,
VA 22,684 11.3 % 4,899 2.5 % -- Other Counties in VA 6,217 3.1 % --
-- -- Outside VA, D.C. & MD
1,166
0.6 % --
-- -- $ 199,754 100.0 % $
30,877 15.5 % 1.3 %
As of June 30, 2010
Commercial, Acquisition, Development and Construction
By County/Jurisdiction of
Origination:
Total
Outstandings
Percentage
of Total
Non-accrual
Loans
Non-accruals
as a % of
Outstandings
Net charge-
offs as a % of
Outstandings
District of Columbia $ 16,611 9.3 % $ -- -- --
Montgomery, MD 1,385 0.8 % -- -- -- Prince Georges, MD 12,175 6.7 %
-- -- -- Other Counties in MD 9,447 5.3 % -- -- --
Arlington/Alexandria, VA 9,312 5.2 % -- -- -- Fairfax, VA 20,994
11.6 % -- -- -0.2 % Culpeper/Fauquier, VA 3,020 1.7 % -- -- --
Henrico, VA 833 0.5 % -- -- -- Loudoun, VA 32,749 18.2 % 4,797 2.7
% -- Prince William, VA 37,730 21.1 % 2,114 1.2 % -- Spotsylvania,
VA 2,698 1.5 % -- -- -- Stafford, VA 30,026 16.8 % -- -- -- Other
Counties in VA 1,562 0.9 % -- -- -- Outside VA, D.C. & MD
650 0.4 %
-- -- -- $
179,192 100.0 % $ 6,911 3.9 % -0.2 %
As of June 30,
2010
Non-Farm/Non-Residential
By County/Jurisdiction of
Origination:
Total
Outstandings
Percentage
of Total
Non-accrual
Loans
Non-accruals
as a % of
Outstandings
Net charge-
offs as a % of
Outstandings
District of Columbia $ 76,241 6.7 % $ -- -- --
Montgomery, MD 36,032 3.2 % 7,575 0.7 % 0.1 % Prince Georges, MD
59,064 5.2 % 1,128 0.1 % -- Other Counties in MD 47,499 4.2 % -- --
-- Arlington/Alexandria, VA 182,539 16.0 % 3,945 0.3 % -- Fairfax,
VA 275,441 24.1 % -- -- -- Culpeper/Fauquier, VA 6,189 0.5 % -- --
-- Frederick, VA 6,347 0.6 % -- -- -- Henrico, VA 30,860 2.7 %
1,500 0.1 % -- Loudoun, VA 111,867 9.8 % 628 0.1 % 0.1 % Prince
William, VA 198,419 17.4 % 1,341 0.1 % -- Spotsylvania, VA 19,951
1.7 % -- -- -- Stafford, VA 21,950 1.9 % -- -- -- Other Counties in
VA 58,468 5.1 % 226 0.0 % -- Outside VA, MD & DC
10,122 0.9 %
-- -- -- $
1,140,989 100.0 % $ 16,343 1.4 % 0.2 % Of this total of $1.1
billion in non-farm/non-residential real estate loans,
approximately $37.7 million will mature in 2010, $59.1 million in
2011 and $60.3 million in 2012.
As of June 30, 2010 2009
% Change 3/31/10 % Change
Investment
Securities (at book value): Available-for-sale: U.S. Government
Agency obligations $ 277,282 $ 204,896 35.3 % $ 234,811 18.1 %
Pooled trust preferred securities 1,481 1,864 -20.5 % 1,772 -16.4 %
Obligations of states and political subdivisions
57,249 40,219 42.3
% 43,209 32.5
% $ 336,012 $ 246,979 36.0 % $ 279,792 20.1 %
Held-to-maturity: U.S. Government Agency obligations $ 9,556 $
15,258 -37.4 % $ 10,906 -12.4 % Obligations of states and political
subdivisions
33,644 46,853
-28.2 % 43,462
-22.6 % $ 43,200 $ 62,111 -30.4 % $
54,368 -20.5 % Virginia Commerce Bancorp, Inc.
Consolidated Balance Sheets (Dollars in thousands, except per share
data) As of June 30, (Unaudited) 2010 2009
Assets
Cash and due from banks $ 29,026 $ 31,693 Investment securities
(fair value: 2010, $380,247; 2009, $310,348) 379,212 309,090
Restricted stocks, at cost 11,752 11,752 Federal funds sold 91,502
22,999 Loans held-for-sale 9,620 12,940 Loans, net of allowance for
loan losses of $62,345 in 2010 and $38,978 in 2009 2,187,912
2,217,945 Bank premises and equipment, net 12,738 14,601 Accrued
interest receivable 10,317 9,826 Other real estate owned, net of
valuation allowance of $5,871 in 2010, and $0 in 2009 26,477 28,198
Other assets 68,251 40,050 Total assets $ 2,826,807 $
2,699,494
Liabilities and Stockholders’ Equity
Deposits Demand deposits $ 254,475 $ 239,658 Savings and
interest-bearing demand deposits 1,194,985 759,861 Time deposits
864,626 1,191,954 Total deposits $ 2,314,086 $
2,191,473 Securities sold under agreement to repurchase and federal
funds purchased 183,456 165,730 Other borrowed funds 25,000 25,000
Trust preferred capital notes 66,185 65,929 Accrued interest
payable 3,293 5,237 Other liabilities 4,456 3,112
Total liabilities $ 2,596,476 $ 2,456,481
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 $ 64,719 $ 63,267 Common stock, $1.00 par,
50,000,000 shares authorized, issued and outstanding 2010,
26,949,173 including 9,335 in unvested restricted stock issued;
2009, 26,693,074 26,940 26,693 Surplus 97,061 96,200 Warrants 8,520
8,520 Retained earnings 30,210 50,904 Accumulated other
comprehensive income (loss), net 2,881 (2,571) Total
stockholders’ equity $ 230,331 $ 243,013 Total liabilities and
stockholders’ equity $ 2,826,807 $ 2,699,494
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,
2010 2009 2010 2009
Interest and dividend
income: Interest and fees on loans $ 33,236 $
33,186 $ 66,141 $ 66,629 Interest and dividends on investment
securities: Taxable 3,311 3,495 6,591 7,157 Tax-exempt 476 406 902
751 Dividends on restricted stocks 88 84 176 168 Interest on
federal funds sold 50 12 78
32 Total interest and dividend income $ 37,161
$ 37,183 $ 73,888 $ 74,737
Interest expense:
Deposits $ 8,431 $ 12,796 $ 17,859 $ 27,427
Securities sold under agreement to
repurchase and federal funds purchased
1,010 835 1,999 1,455 Other borrowed funds 268 269 534 534 Trust
preferred capital notes 1,231 1,283
2,459 2,564 Total interest expense $ 10,940
$ 15,183 $ 22,851 $ 31,980
Net interest
income $ 26,221 $ 22,000 $ 51,037 $ 42,757 Provision for loan
losses 4,200 18,423 8,438
31,813 Net interest income after provision for loan losses $
22,021 $ 3,577 $ 42,599 $ 10,944
Non-interest income (charges): Service charges and other
fees $ 838 $ 903 $ 1,714 $ 1,790 Non-deposit investment services
commissions 178 122 307 279 Fees and net gains on loans
held-for-sale 483 952 829 1,759 Loss on other real estate owned
(1,060) -- (1,978) -- Gain on sale of securities 139 -- 139 --
Impairment loss on securities (668) (108) (1,519) (138) Other
118 80 225 79
Total non-interest income (charges) $ 28 $ 1,949 $
(283) $ 3,769
Non-interest expense: Salaries and
employee benefits $ 5,991 $ 5,694 $ 11,986 $ 11,615 Occupancy
expense 2,410 2,437 5,120 5,204 FDIC insurance 1,332 1,884 2,641
2,796 Franchise tax expense 718 775 1,435 1,550 Data processing
expense 579 576 1,253 1,176 Other operating expense 2,698
2,220 5,082 4,268 Total
non-interest expense $ 13,728 $ 13,586 $ 27,517
$ 26,609 Income (loss) before taxes $ 8,321 $ (8,060) $
14,799 $ (11,896) Provision (benefit) for income taxes 2,750
(2,876) 4,759 (4,303)
Net income (loss) $ 5,571 $ (5,184) $ 10,040
$ (7,593) Effective dividend on preferred stock 1,251
1,251 2,502 2,038
Net
income (loss) available to common stockholders $ 4,320 $
(6,435) $ 7,538 $ (9,631) Earnings (loss) per common share, basic $
0.16 $ (0.24) $ 0.28 $ (0.36) Earnings (loss) per common share,
diluted $ 0.15 $ (0.24) $ 0.26 $ (0.36)
Virginia Commerce Bancorp, Inc. Consolidated
Average Balances, Yields, and Rates Three Months Ended June 30,
(Unaudited)
2010 2009 (Dollars in thousands)
AverageBalance
InterestIncome-Expense
AverageYields/Rates
AverageBalance
InterestIncome-Expense
AverageYields/Rates
Assets Securities (1) $ 362,411 $ 3,787 4.30 % $ 322,735 $
3,901 5.02 % Restricted stock 11,752 88 3.00 % 11,752 84 2.87 %
Loans, net of unearned income (2) 2,266,145 33,236 5.89 % 2,294,007
33,186 5.81 % Interest-bearing deposits in other banks 186 -- 0.06
% 79 -- 0.12 % Federal funds sold 85,797 50
0.23 % 27,400 12 0.17 %
Total
interest-earning assets $ 2,726,291 $ 37,161 5.50 % $ 2,655,973
$ 37,183 5.65 % Other assets 87,131 60,769
Total
Assets $ 2,813,422 $ 2,716,742
Liabilities and
Stockholders’ Equity Interest-bearing deposits: NOW accounts $
369,336 $ 817 0.89 % $ 229,785 $ 717 1.25 % Money market accounts
155,482 479 1.23 % 160,923 573 1.43 % Savings accounts 638,407
2,480 1.56 % 304,347 1,720 2.27 % Time deposits 885,828
4,655 2.11 % 1,264,340
9,786 3.10 % Total interest-bearing deposits $ 2,049,053 $
8,431 1.65 % $ 1,959,395 $ 12,796 2.62 % Securities sold under
agreement to repurchase and federal funds purchased 185,343 1,010
2.18 % 187,897 835 1.78 % Other borrowed funds 25,000 268 4.25 %
25,000 269 4.25 % Trust preferred capital notes 66,154
1,231 7.36 % 65,898 1,283
7.70 %
Total interest-bearing liabilities $ 2,325,550
$ 10,940 1.89 % $ 2,238,190 $ 15,183 2.72 % Demand deposits 245,196
220,247 Other liabilities 15,089 9,634
Total
liabilities $ 2,585,835 $ 2,468,071 Stockholders’ equity
227,587 248,671
Total liabilities and stockholders’
equity $ 2,813,422 $ 2,716,742 Interest rate spread 3.61 % 2.93
% Net interest income and margin $ 26,221 3.89 % $ 22,000 3.35 %
(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 $539 thousand and $892 thousand
for the three months ended June 30, 2010 and 2009, respectively.
Virginia Commerce
Bancorp, Inc. Consolidated Average Balances, Yields, and Rates Six
Months Ended June 30, (Unaudited)
2010 2009 (Dollars in
thousands)
AverageBalance
InterestIncome-Expense
AverageYields/Rates
AverageBalance
InterestIncome-Expense
AverageYields/Rates
Assets Securities (1) $ 350,391 $ 7,493 4.42 % $ 325,244 $
7,908 5.06 % Restricted stock 11,752 176 3.02 % 11,423 168 2.96 %
Loans, net of unearned income (2) 2,273,538 66,141 5.88 % 2,303,301
66,629 5.84 % Interest-bearing deposits in other banks 114 -- 0.07
% 91 -- 0.12 % Federal funds sold 67,367 78
0.23 % 34,354 32 0.18 %
Total
interest-earning assets $ 2,703,162 $ 73,888 5.54 % $ 2,674,413
$ 74,737 5.66 % Other assets 87,845 57,320
Total
Assets $ 2,791,007 $ 2,731,733
Liabilities and
Stockholders’ Equity Interest-bearing deposits: NOW accounts $
325,483 $ 1,630 1.01 % $ 210,409 $ 1,326 1.27 % Money market
accounts 151,070 971 1.30 % 155,362 1,151 1.49 % Savings accounts
621,150 4,977 1.62 % 273,059 3,159 2.33 % Time deposits
943,597 10,281 2.20 % 1,343,894
21,791 3.27 % Total interest-bearing deposits $
2,041,300 $ 17,859 1.76 % $ 1,982,724 $ 27,427 2.79 % Securities
sold under agreement to repurchase and federal funds purchased
183,659 1,999 2.19 % 186,561 1,455 1.57 % Other borrowed funds
25,000 534 4.25 % 25,000 534 4.25 % Trust preferred capital notes
66,122 2,459 7.39 % 65,865
2,564 7.74 %
Total interest-bearing
liabilities $ 2,316,081 $ 22,851 1.99 % $ 2,260,150 $ 31,980
2.85 % Demand deposits 234,795 209,980 Other liabilities
15,333 11,025
Total liabilities $ 2,566,209 $
2,481,155 Stockholders’ equity 224,798 250,578
Total liabilities and stockholders’ equity $ 2,791,007 $
2,731,733 Interest rate spread 3.55 % 2.81 % Net interest income
and margin $ 51,037 3.84 % $ 42,757 3.25 % (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
$1.3 million and $1.7 million for the six months ended June 30,
2010 and 2009, respectively.
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