Virginia Commerce Bancorp, Inc. (the “Company”), (Nasdaq: VCBI),
parent company of Virginia Commerce Bank (the “Bank”), today
reported net income to common stockholders of $5.2 million, or
$0.17 per diluted common share, for the third quarter of 2011,
compared with a net income to common stockholders of $5.7 million,
or $0.20 per diluted common share, for the same period in 2010.
Non-performing assets and loans 90+ days past due decreased 25.3%
sequentially, from $74.7 million at June 30, 2011, to $55.9 million
at the current quarter-end.
Peter A. Converse, President and Chief Executive Officer,
commented, “The Company’s third quarter represented a rather
well-rounded performance. Net income to stockholders was relatively
strong at $5.2 million, asset quality improved markedly across the
board, and the resumption of modest loan growth during the third
quarter is encouraging.”
“First of all, net income to stockholders of $5.2 million was
relatively strong, albeit less, as compared to the prior quarter
and the same period last year. The sequential decline was mostly
due to a $2.5 million increase in loan loss provisioning expense
and a $660 thousand OREO write-down, that were necessary to
facilitate transactions resulting in greater quarterly progress in
problem loan resolution. Additionally, the higher earnings a year
ago included $1.0 million of death benefits received from
bank-owned life insurance during that quarter. Secondly, asset
quality exhibited meaningful overall improvement in the third
quarter. As already indicated, non-performing assets and loans 90+
days past due decreased 25.3% sequentially to $55.9 million, or
1.9% of total assets. Troubled debt restructuring (“TDRs”) declined
13.1%, from $81.1 million at June 30, 2011, to $71.7 million at the
end of the third quarter. Loans 30-89 days past due improved to
$12.8 million as of September 30, 2011, from $15.1 million the
prior quarter. Based on this asset quality improvement, our
analysis of current portfolio risk and other asset resolution
strategies currently being implemented, we anticipate maintaining a
healthy rate of progress in reducing problem assets. Finally,
despite various headwinds to loan growth since 2009, we see
progress in the modest sequential growth of 0.1% in net loans
during the third quarter, which we believe may represent the
inflection point after 2½ years of negative growth. Taking into
account our current loan pipeline and business development
activity, we are cautiously optimistic that we have turned the
corner and that loan production will exceed run-off on an ongoing
basis."
Converse continued, “Our confidence in being able to sustain
earnings and asset quality progress is high and, as a result, based
upon preliminary projections, we expect to be able to pay off TARP
from earnings. We currently intend to do so before the dividend
rate increases from 5% to 9% in the fourth quarter of 2013.
Accordingly, we do not anticipate pursuing a capital raise for the
foreseeable future and will provide more clarity on the timeframe
for TARP repayment through earnings following year-end. The
repayment process is subject to regulatory approval and is not
likely to start until the end of the second quarter of 2012 at the
earliest.”
Converse concluded, “We were among the many community banks not
approved for participation in the Small Business Lending Program.
While we felt that participation in the Program would have been
beneficial, the non-participation in no way affects our inclination
to earn our way out of TARP. We had a positive SBLF recommendation
from our regulators, and are at a loss to understand the Treasury’s
rationale for the decline. As was the case with many other banks
not approved for SBLF, the reasons were not made clear. Given our
progress in earnings and asset quality improvement since we made
application earlier this year, we anticipate timing and stale
information may have played a role. To formally conclude the
application process, we withdrew our application.”
SUMMARY REVIEW OF FINANCIAL PERFORMANCE
Net Income
For the three months ended September 30, 2011, the Company
recorded net income of $6.6 million. After an effective dividend of
$1.3 million to the U.S. Treasury on the Company’s TARP preferred
stock, the Company reported net income to common stockholders of
$5.2 million, or $0.17 per diluted common share, compared to net
income to common stockholders of $5.7 million, or $0.20 per diluted
common share, in the third quarter of 2010. For the nine months
ended September 30, 2011, the Company reported net income to common
stockholders of $16.4 million, or $0.53 per diluted common share,
compared to net income to common stockholders of $13.2 million, or
$0.46 per diluted common share, for the same period in 2010. The
higher earnings reported for the three months ended September 30,
2010, were largely attributable to $1.0 million of death benefits
received from bank-owned life insurance during that quarter.
Earnings improvement for the nine-month period ended September 30,
2011, as compared to the same period in 2010, was attributable to
lower provisions for loan losses, higher net interest margins and
non-interest expense reduction.
Adjusted operating earnings for the three months ended September
30, 2011, were $14.3 million, down $321 thousand, or 2.2%, compared
to $14.6 million for the three months ended September 30, 2010. On
a sequential basis, adjusted operating earnings were down $161
thousand for the three months ended September 30, 2011. The Company
calculates adjusted operating earnings by excluding taxes,
provisions for loan losses, losses on other real estate owned,
gains on sale of securities, death benefits received from bank
owned life insurance, and impairment losses on securities.
Asset Quality and Provisions For Loan Losses
Provisions for loan losses were $3.9 million for the quarter
ended September 30, 2011, compared to $5.1 million in the same
period in 2010, with total net charge-offs of $7.7 million in the
third quarter of 2011 versus $4.7 million for the same period a
year ago. For the nine months ended September 30, 2011, provisions
for loan losses totaled $11.2 million, compared to $13.5 million
for the prior year period, with 2011 year-to-date net charge-offs
of $24.2 million, up $8.3 million, from $15.9 million in the nine
months ended September 30, 2010. Charge-offs during the quarter
included $4.0 million in partial write-downs of five residential
acquisition and development loans to reduce the book balance to
estimated liquidation value, a $900 thousand write-down to
facilitate the sale of a commercial acquisition and development
loan, charge-offs of $1.9 million for three non-farm,
non-residential loans prior to implementing a deed in lieu of
foreclosure and foreclosing after a bankruptcy stay was lifted, a
$340 thousand short-sale of a one-to-four family residential
mortgage and an $840 thousand write-down of commercial and
industrial loans pursuant to a forbearance and settlement
agreement. Charge-offs of $7.4 million were supported by specific
reserves.
Total non-performing assets and loans 90+ days past due declined
from $82.4 million at September 30, 2010, to $55.9 million at
September 30, 2011, and decreased $18.9 million sequentially, from
$74.7 million at June 30, 2011. The Company’s sequential
improvement in non-performing assets and loans 90+ days past due
was facilitated by $7.9 million in charge-offs, a $660 thousand
write-down upon the sale of other real estate owned, $8.6 million
in proceeds from the sale of non-performing loans or other real
estate owned, $1.2 million in net upgrades of loans to performing
status and $515 thousand in recoveries of loans previously
charged-off.
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
September 30, 2011, $26.3 million, or 58.6%, of non-performing
loans represented acquisition, development and construction (“ADC”)
loans, $5.0 million, or 11.2%, represented loans on one-to-four
family residential properties, $7.6 million, or 16.9%, represented
non-farm, non-residential loans, and $5.5 million, or 12.2%,
represented commercial and industrial (“C&I”) loans. As of
September 30, 2011, the allowance for loan losses represented 2.30%
of total loans, down from 2.47% at June 30, 2011, with such
allowance covering 108.6% of total non-performing loans.
Included in the loan portfolio at September 30, 2011, are loans
classified as troubled debt restructurings (“TDRs”) totaling $71.7
million, a sequential reduction of 13.1%, or $9.4 million, from
$81.1 million at June 30, 2011. These are performing, accruing
loans that represent relationships for which a modification to the
contractual interest rate or repayment structure has been granted
to address a financial hardship. These loans make up 3.3% of the
total loan portfolio at September 30, 2011, and represent $22.9
million in ADC loans, $35.1 million in non-farm, non-residential
real estate loans, $9.5 million in C&I loans and $4.2 million
in one-to-four family residential loans. At September 30,
2011, 47.0% of the Company’s TDRs were reviewable TDRs and 53.0%
were permanent TDRs. Reviewable TDRs are loans that have been
restructured at or will return to a market rate of interest and can
include a temporary interest rate modification, partial deferral of
interest or principal or an extension of term. They can return to
performing status upon six months of on-time payments following the
return to a market rate of interest, but only in the fiscal year
following the year of restructure. Permanent TDRs are loans that
have been restructured and include a permanent interest rate
reduction. They remain in a TDR status until the loan is paid off.
The sequential reduction in TDRs was attributable to payoffs and
principal curtailments of $5.1 million, upgrades to performing
status of $4.3 million and transfers to non-accrual of $1.0 million
offset by $1.0 million of new TDR additions.
Net Interest Income
Net interest income of $26.7 million for the third quarter of
2011 was down $452 thousand, or 1.7%, over the same quarter last
year, due primarily to a decrease in the net interest margin from
3.96% in the third quarter of 2010 to 3.85% for the third quarter
2011. Interest expense decreased $2.0 million for the quarter ended
September 30, 2011, from the same period in 2010 and decreased $6.6
million for the nine months ended September 30, 2011, compared to
2010. The Company expects that interest expense will decline
further in the fourth quarter of 2011 as interest rates were
lowered in late September by an average of 15 basis points on
approximately $1 billion in transaction accounts. Reductions in
interest expense partially offset the decrease in interest and fee
income on loans of $2.4 million for the three-months ended
September 30, 2011, as compared to the same period in 2010.
Year-to-date interest and fee income on loans decreased $5.0
million, as compared to the same period in 2010. The decline in
interest and fee income on loans from 2010 to 2011 is attributable
to decreases in average outstanding loan balances of $2.5 million
for the three months and $81.0 million for the nine months ended
September 30, 2011, as compared to the same periods in 2010.
Year-to-date net interest income of $79.7 million was up 1.9%,
compared to $78.2 million in 2010. On a sequential basis, the net
interest margin was down fourteen basis points due primarily to
decreased average loans and higher balances in lower earning assets
during the third quarter of 2011. The increase in the net interest
margin for the nine months ended September 30, 2011, compared to
the same period in 2010, was primarily driven by lower deposit
costs due to significant reductions in the level of time deposits,
increased levels of demand deposits and lower rate interest-bearing
transaction accounts. Management anticipates the net interest
margin will range between 3.70% and 3.85% for the remainder of
2011.
Non-Interest Income
For the three months ended September 30, 2011, the Company
recognized $1.9 million in non-interest income, compared to $3.1
million for the three months ended September 30, 2010. For the nine
months ended September 30, 2011, the Company recognized
non-interest income of $5.7 million compared to $4.8 million for
the same period in 2010. Non-interest income for the third quarter
of 2010 included $1.0 million in bank-owned life insurance death
benefits. Fees and net gains on loans held for sale increased $210
thousand during the third quarter of 2011 from the second quarter
of 2011, and increased by $62 thousand for the nine months ended
September 30, 2011, from the same period last year.
Non-Interest Expense
Non-interest expense decreased $418 thousand, or 2.7%, from
$15.3 million in the third quarter of 2010, to $14.9 million in the
third quarter of 2011, and was down $943 thousand, or 2.1%, from
$44.8 million for the nine months ended September 30, 2010, to
$43.9 million year-to-date 2011. Compared to the second quarter of
2011, non-interest expense increased $373 thousand during the third
quarter of 2011. The majority of the year-over-year decreases in
non-interest expense were due to lower FDIC insurance premiums and
lower losses on other real estate owned. The efficiency ratio
declined slightly from 49.3% in the third quarter of 2010 to 49.4%
in the third quarter of 2011.
Investment Securities
Investment securities increased $221.7 million, or 58.2%,
year-over-year to $602.6 million at September 30, 2011, and were up
$91.5 million sequentially from June 30, 2011. U.S. Government
agency securities, including mortgage-backed securities (MBS) and
collateralized mortgage obligations (CMOs) comprised a majority of
the increases. The portfolio contains four pooled trust preferred
securities with an amortized cost basis of $9.6 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. Since the first
quarter of 2009, the Bank has recorded an aggregate impairment loss
of $4.2 million on three of the four pools. There was no recorded
impairment loss for the third quarter of 2011. The increase of
$221.7 million in investment securities was due to investing excess
funds provided by increases in deposits, repurchase agreements and
stockholder’s equity, combined with the run-off of loan balances
and funds provided by the decrease in other asset balances.
Investments were made in short term, average life pass-through
securities, generally of three to four years or less. This strategy
positions the Bank to maintain a constant flow of funds to support
future loan growth and to provide repricing opportunities if rates
begin to rise.
Loans
Loans, net of allowance for loan losses, decreased $81.0
million, or 3.7%, from $2.18 billion at September 30, 2010, to
$2.10 billion at September 30, 2011. ADC loans fell by $51.8
million, or 13.8%, non-farm, non-residential real estate loans
decreased $13.2 million, or 1.2%, and one-to-four family
residential loans decreased $35.9 million, or 8.5%, while C&I
loans increased $21.7 million, or 10.5%. Sequentially, net loans
were up $2.1 million, or 0.1% as declines in ADC loans of $5.8
million, C&I loans of $3.4 million and multi-family residential
loans of $13.2 million were offset by growth of $22.7 million in
non-farm, non-residential real estate loans including $11.5 million
in owner-occupied. Year-over-year loan production has been
negatively impacted by a lower demand for credit in both the
business and consumer sectors as cautious borrowers await clearer
economic signs, run-off in both commercial and residential mortgage
loans due to aggressive interest rate competition and a strategic
decision to restrict ADC lending and focus on greater portfolio
diversification as well as deposit generation and non-credit
products. Lending efforts are being directed toward building
greater market share in commercial lending, including non-farm,
non-residential owner-occupied real estate loans, and particularly
in sectors forecast for growth such as government contract lending,
professional practices and associations and select service
industries, with strategic hiring, marketing campaigns and call
efforts. Year-over-year and sequential loan production reflect
progress in executing this strategy.
Deposits
For the twelve months ended September 30, 2011, deposits
increased $45.5 million, or 2.0%, to $2.37 billion, with demand
deposits increasing $119.8 million, or 44.4%, savings and
interest-bearing demand deposits decreasing by $36.4 million, or
3.0%, and time deposits falling $37.9 million, or 4.6%.
Sequentially, deposits rose $115.2 million, or 5.1%, with demand
deposits increasing by $96.4 million, or 32.9%, savings and
interest-bearing demand accounts growing $5.3 million, or 0.5%, and
time deposits increasing by $13.4 million, or 1.7%. The annual and
sequential increases are impacted by a temporary influx of
approximately $71.0 million in demand deposits that are expected to
flow back out in the fourth quarter of 2011. The vast majority of
these non-interest deposits in excess of historical average are
held and earmarked for auction by a longstanding client that
invests and trades in U.S. energy markets. Demand deposit growth
remains the top deposit priority, with the increase in demand
deposits primarily due to the successful efforts of the Company’s
team of eight business development officers, who are focused on
acquisition and retention of commercial operating funds, treasury
management services and other related cross-sales. At September 30,
2011, the Bank had no brokered certificates of deposit, down from
$30.0 million at September 30, 2010.
Capital Levels and Stockholders’ Equity
On March 31, 2011, the Company issued 426,000 shares of its
common stock at a price of $5.87 per share in a registered direct
placement with a Company director for total gross proceeds of
approximately $2.5 million. In addition, the Company issued to the
investor, warrants exercisable for shares of common stock, which,
if fully exercised, would provide an additional $4.8 million in
gross proceeds to the Company. The warrants each have an exercise
price of $5.62 per share. The Series A warrants, exercisable for a
total of 426,000 shares of common stock, are exercisable for a
period of seven months following the closing date. The Series B
warrants, also exercisable for a total of 426,000 shares of common
stock, are exercisable for a period of twelve months following the
closing date.
On September 29, 2010, the Company issued 1,904,766 shares of
its common stock at a price of $5.25 per share in a registered
direct placement with several institutional investors for total
gross proceeds of $10.0 million. In addition, the Company issued to
the investors warrants exercisable for shares of common stock. The
warrants each have an exercise price of $6.00 per share, which
represents a 14.3% premium to the offering price of the shares of
common stock sold in the registered direct placement. The Series A
warrants were exercisable through April 30, 2011, and 130,851 were
exercised as of that date. The 952,383 Series B warrants originally
were to expire on September 29, 2011, but on September 27,
2011, the expiration date of 904,764 of the Series B Warrants was
extended to January 27, 2012, with 47,619 warrants having been
exercised prior to the warrant extension.
Stockholders’ equity increased $28.5 million, or 11.6%, from
$247.0 million at September 30, 2010, to $275.5 million at
September 30, 2011, with approximately $3.5 million in net proceeds
from the above referenced stock issuances, net income to common
stockholders of $19.6 million over the twelve-month period, a $2.5
million increase in other comprehensive income related to the
investment securities portfolio, $1.7 million in the accretion of
the discount on preferred stock and $1.1 million in proceeds and
tax benefits related to the exercise of options by the Company’s
directors and officers, and stock option expense credits. As a
result of these changes, the Company’s Tier 1 capital ratio
increased from 12.96% at September 30, 2010, to 14.46% at September
30, 2011, its total qualifying capital ratio increased from 14.21%
to 15.71% and its tangible common equity ratio increased from 6.39%
to 7.17%. Sequentially, the Company’s Tier 1 and total qualifying
capital ratios are each up 11 basis points, and its tangible common
equity ratio is down 1 basis point due to higher levels of tangible
assets at September 30, 2011.
CONFERENCE CALL
The Company will host a teleconference call for the financial
community on October 19, 2011, at 11:00 a.m. Eastern Daylight Time
to discuss the third quarter 2011 financial results. The public is
invited to listen to this conference call by dialing 866-814-8482
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 October 19, 2011, until 11:59 p.m. Eastern
Daylight Time on October 26, 2011. The public is invited to listen
to this conference call replay by dialing 888-266-2081 and entering
access code 1554457.
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.
Adjusted operating earnings is a non-GAAP financial measure that
reflects net income excluding taxes, loan loss provisions, gains or
losses on other real estate owned, impairment losses on securities,
gain on sale of securities and death benefits received from bank
owned life insurance. These excluded items are difficult to predict
and we believe that adjusted operating earnings provides the
Company and investors with a valuable measure of the Company’s
operational performance and a valuable tool to evaluate the
Company’s financial results. Calculation of adjusted operating
earnings for the three months ended September 30, 2011, September
30, 2010, and June 30, 2011 is as follows:
Three Months EndedSeptember 30,
Three MonthsEndedJune 30,
(in thousands)
2011 2010
2011 Net Income $ 6,566 $
6,958 $ 8,836 Adjustments to net income: Provision for loan losses
3,933 5,100 1,434 Loss on other real estate owned 546 713 320
Impairment loss on securities -- -- -- Gain on sale of securities
-- -- -- Provision for income taxes 3,277 2,917 4,254 Death
benefits received from bank owned life insurance -- (1,045 ) (361 )
Adjusted Operating Earnings $ 14,322 $ 14,643 $
14,483
The adjusted efficiency ratio is a non-GAAP financial measure
that is computed by dividing non-interest expense, excluding gains
or losses on other real estate owned, by the sum of net interest
income on a tax equivalent basis and non-interest income before
impairment losses on securities, gain on sale of securities and
death benefits received from bank owned life insurance. 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. Calculation of the adjusted efficiency ratio for the
three months and nine months ended September 30, 2011 and September
30, 2010 is as follows:
(in thousands)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30,
2011 2010
2011 2010
Summary Operating Results: Non-interest
expense $ 14,347 $ 14,598 $ 42,841 $ 42,115 Net interest
income 26,729 27,181 79,700 78,218 Non-interest income 1,940 3,105
5,672 4,800 Impairment loss on securities -- -- 732 1,519 Gain on
sale of securities -- -- (503 ) (139 ) Death benefits received from
bank owned life insurance -- (1,045 ) (361 ) (1,045 ) Total
(1) $ 28,669 $ 29,241 $ 85,240 $ 83,353
Efficiency Ratio,
adjusted 49.4 % 49.3 % 49.6 % 49.9 %
(1)
Tax Equivalent Income of $29,048 for the
three months ended September 30, 2011 and $86,394 for the nine
months ended September 30, 2011. Tax Equivalent Income of $30,657
for the three months ended September 30, 2010 and $85,402 for the
nine months ended June 30, 2011.
The tangible common equity ratio is a non-GAAP financial measure
representing the ratio of tangible common equity to tangible
assets. Tangible common equity and tangible assets are non-GAAP
financial measures derived from GAAP-based amounts. We calculate
tangible common equity for the Company by excluding the balance of
intangible assets and outstanding preferred stock issued to the
U.S. Treasury from total stockholders’ equity. We calculate
tangible assets by excluding the balance of intangible assets from
total assets. We had no intangible assets for the periods
presented. We believe that this is consistent with the treatment by
regulatory agencies, which exclude intangible assets from the
calculation of regulatory capital ratios. Accordingly, we believe
that these non-GAAP financial measures provide information that is
important to investors and that is useful in understanding our
capital position and ratios. However, these non-GAAP financial
measures are supplemental and are not substitutes for an analysis
based on a GAAP measure. As other companies may use different
calculations for non-GAAP measures, our presentation may not be
comparable to other similarly titled measures reported by other
companies. Calculation of the Company’s tangible common equity
ratio as of September 30, 2011, September 30, 2010, June 30, 2011
and March 31, 2011 is as follows:
(in thousands)
As of September 30, June 30, March 31,
2011 2010
2011 2011 Tangible
common equity: Total stockholders’ equity $
275,546 $ 247,012 $ 267,124 $ 253,373 Less: Outstanding TARP
senior preferred stock 66,794 65,082 66,334 65,873 Intangible
assets -- -- -- -- Tangible common equity $ 208,752 $ 181,930 $
200,790 $ 187,500 Total tangible assets $ 2,942,323 $
2,846,003 $ 2,797,775 $ 2,783,633
Tangible common equity
ratio 7.17 % 6.39 % 7.18 % 6.74 %
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, , our loan and investment security portfolios,
projected growth, capital position, capital strategies, 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. For
additional information regarding factors that could affect the
Company's operations and results, see the Company’s Annual Report
on Form 10-K for the year ended December 31, 2010, and other
reports filed with and furnished to the Securities and Exchange
Commission.
Virginia Commerce Bancorp, Inc. Financial Highlights
(Dollars in thousands, except per share data) (Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2011
2010 % Change 2011
2010 %
Change Summary Operating Results:
Interest and dividend income $ 35,403 $ 37,832 -6.4 %
$106,558 $ 111,720 -4.6 % Interest expense 8,674 10,651 -18.6 %
26,858 33,502 -19.8 % Net interest income 26,729 27,181 -1.7 %
79,700 78,218 1.9 % Provision for loan losses 3,933 5,100 -22.9 %
11,210 13,538 -17.2 % Non-interest income 1,940 3,105 -37.5 % 5,672
4,800 18.2 % Non-interest expense 14,893 15,311 -2.7 % 43,863
44,806 -2.1 % Income before income taxes 9,843 9,875 -0.3 % 30,299
24,674 22.8 % Net income $ 6,566 $ 6,958 -5.6 % $ 20,368 $ 16,998
19.8 % Effective dividend on preferred stock 1,349 1,250 7.9 %
4,012 3,752 6.9 % Net income available to common stockholders $
5,217 $ 5,708 -8.6 % $ 16,356 $ 13,246 23.5 %
Performance
Ratios: Return on average assets 0.91 % 0.97 % 0.97 % 0.81 %
Return on average equity 9.61 % 11.66 % 10.48 % 9.92 % Net interest
margin 3.85 % 3.96 % 3.95 % 3.88 % Efficiency ratio, adjusted 49.4
% 49.3 % 49.6 % 49.9 %
Per Share Data: Earnings per
common share-basic $ 0.18 $ 0.21 -14.3 % $0.55 $ 0.49 12.2 %
Earnings per common share-diluted $ 0.17 $ 0.20 -15.0 % $0.53 $
0.46 15.2 % Average number of shares outstanding: Basic 29,746,581
27,599,007 29,557,306 27,159,404 Diluted 30,866,862 28,893,969
30,656,489 28,486,251 As of September 30,
2011 2010
% Change 06/30/11 3/31/11
Selected Balance Sheet Data: Loans, net $ 2,097,042 $
2,178,034 -3.7 % $ 2,094,949 $ 2,122,309 Investment securities
602,565 380,915 58.2 % 511,052 417,071 Assets 2,942,323 2,846,003
3.4 % 2,797,775 2,783,633 Deposits 2,368,939 2,323,478 2.0 %
2,253,742 2,256,970 Stockholders’ equity 275,546 247,012 11.6 %
267,124 253,373 Book value per common share $ 6.89 $ 6.09 13.1 % $
6.62 $ 6.18
Capital Ratios (% of risk weighted
assets): Tier 1 capital: Company 14.46 % 12.96 % 14.35 % 13.96 %
Bank 14.17 % 12.55 % 13.99 % 13.57 % Total qualifying capital:
Company 15.71 % 14.21 % 15.60 % 15.21 % Bank 15.42 % 13.80 % 15.24
% 14.82 % Tier 1 leverage: Company 11.60 % 10.84 % 11.67 % 11.48 %
Bank 11.39 % 10.52 % 11.41 % 11.16 % Tangible common equity:
Company 7.17 % 6.39 % 7.18 % 6.74 %
As of September 30,
(Dollars in thousands) 2011
2010 06/30/11
3/31/11
Asset Quality: Non-performing assets:
Non-accrual loans: Commercial $ 5,486 $ 5,176 $ 4,932 $ 5,622 Real
estate-one-to-four family residential: Permanent first and second
1,960 6,554 1,982 2,781 Home equity loans and lines
3,051 724
2,990 3,325 Total
real estate-one-to-four family residential $ 5,011 $ 7,278 $ 4,972
$ 6,106 Real estate-multi-family residential 486 -- 495 -- Real
estate-non-farm, non-residential: Owner-occupied 3,689 5,251 6,516
8,016 Non-owner-occupied
3,878
1,204 7,831
1,988 Total real estate-non-farm,
non-residential $ 7,567 $ 6,455 $ 14,347 $ 10,004 Real
estate-construction: Residential-builder 20,181 31,138 25,393
24,234 Commercial
6,083
6,861 8,586
8,625 Total real estate-construction $ 26,264 $
37,999 $ 33,979 $ 32,859 Consumer
22
110 18
18 Total non-accrual loans 44,836 57,018 58,743
54,609 OREO
10,377
24,395 14,690
18,879 Total non-performing assets $ 55,213 $
81,413 $ 73,433 $ 73,488 Loans 90+ days past due and still
accruing: Commercial $ 89 $ 149 $ -- $ -- Real estate-one-to-four
family residential: Permanent first and second -- -- -- -- Home
equity loans and lines
--
369 --
-- Total real estate-one-to-four family
residential $ -- $ 369 $ -- $ -- Real estate-multi-family
residential -- -- -- -- Real estate-non-farm, non-residential:
Owner-occupied -- 361 -- 25 Non-owner-occupied
-- --
350 -- Total real
estate-non-farm, non-residential $ -- $ 361 $ 350 $ 25 Real
estate-construction: Residential-owner-occupied -- -- 393 --
Residential-builder 574 -- 564 -- Commercial
--
-- --
-- Total real estate-construction $ 574
$ -- $ 957 $ -- Consumer
--
100 --
-- Total loans 90+ days past due and still
accruing $ 663 $ 979 $ 1,307 $ 25 Total non-performing
assets and past due loans $ 55,876 $ 82,392 $ 74,740 $ 73,513
Troubled debt restructurings $ 71,686 $ 105,617 $ 81,070 $
91,876 Non-performing assets to total loans: 2.57 % 3.63 %
3.41 % 3.37 % to total assets: 1.88 % 2.86 % 2.62 % 2.64 %
Non-performing assets and past due loans to total loans: 2.60 %
3.67 % 3.47 % 3.37 % to total assets: 1.90 % 2.90 % 2.67 % 2.64 %
Allowance for loan losses to total loans 2.30 % 2.80 % 2.47 % 2.59
% Allowance for loan losses to non-performing loans 108.58 % 108.24
% 88.62 % 103.35 % Total allowance for loan losses $ 49,405
$ 62,776 $ 53,217 $ 56,465 As of September 30,
(Dollars in thousands) 2011
2010 06/30/11
3/31/11 Loans 30 to 89 days past due Commercial $ 671
$ 1,237 $ 1,812 $ 1,063 Real estate-one-to-four family residential:
Permanent first and second 1,761 1,813 2,815 2,376 Home equity
loans and lines
99
786 339
89 Total real estate-one-to-four family
residential $ 1,860 $ 2,599 $ 3,154 $ 2,465 Real
estate-multi-family residential -- -- -- 495 Real estate-non-farm,
non-residential: Owner occupied 3,582 12,463 4,908 --
Non-owner-occupied
6,072
174 4,688
5,940 Total real estate-non-farm,
non-residential $ 9,654 $ 12,637 $ 9,596 $ 5,940 Real
estate-construction: Residential-owner-occupied -- -- -- --
Residential-builder 573 1,372 574 378 Commercial
-- --
-- -- Total real
estate-construction $ 573 $ 1,372 $ 574 $ 378 Consumer 43 36 35 63
Farmland
-- --
-- --
Total loans 30 to 89 days past due $ 12,801 $ 17,881 $ 15,171 $
10,404
For nine months endedSeptember 30,
For sixmonthsended
For threemonthsended
2011 2010 06/30/11
3/31/11 Net charge-offs Commercial $
1,559 $ 3,919 $ 869 $ 395 Real estate-one-to-four family
residential: Permanent first and second 2,101 2,368 1,777 1,597
Home equity loans and lines
769
77 766
729 Total real estate-one-to-four family
residential $ 2,870 $ 2,445 $ 2,543 $ 2,326 Real
estate-multi-family residential -- -- -- -- Real estate-non-farm,
non-residential: Owner-occupied 171 1,350 52 54 Non-owner-occupied
6,267 1,479
4,577 1,530
Total real estate-non-farm, non-residential $ 6,438 $ 2,829 $ 4,629
$ 1,584 Real estate-construction: Residential-owner-occupied -- 368
-- -- Residential-builder 5,796 6,361 1,830 910 Commercial
7,494 (233 )
6,595 6,595
Total real estate-construction $ 13,290 $ 6,496 $ 8,425 $ 7,505
Consumer 90 225 36 10 Farmland
--
-- --
-- Total net charge-offs $ 24,247 $ 15,914 $
16,502 $ 11,820 Net charge-offs to average loans outstanding 1.11 %
0.70 % 0.75 % 0.54 % Total provision for loan losses $
11,210 $ 13,538 $ 7,277 $ 5,843
Troubled Debt Restructurings (TDRs) -
By Loan Type
As of September 30, 2011 Reviewable TDRs Permanent
TDRs Total TDRs
# ofLoans
Balance
As % ofBalance
# ofLoans
Balance
As % ofBalance
# ofLoans
Balance
As % ofBalance
Loan Type:
Commercial 2 $ 3,125 9.3 % 4 $ 6,371 16.8 % 6 $ 9,496 13.2 %
Real estate-one-to-four family residential: Permanent first
and second 10 2,699 8.0 % 3 1,500 3.9 % 13 4,199 5.9 % Home equity
loans and lines
-- --
0.0 % --
-- 0.0 % --
-- 0.0 % Total real
estate-one-to-four family residential 10 $ 2,699 8.0 % 3 $ 1,500
3.9 % 13 $ 4,199 5.9 %
Real estate-multi-family residential
-- -- 0.0 % -- -- 0.0 % 0 $ 0 0.0 %
Real estate-non-farm,
non-residential: Owner-occupied 3 1,620 4.8 % 1 2,752 7.2 % 4
4,372 6.1 % Non-owner-occupied
7
25,730 76.4 % 2
4,949 13.0 %
9 30,679 42.8
% Total real estate-non-farm, non-residential 10 $
27,350 81.2 % 3 $ 7,701 20.3 % 13 $ 35,051 48.9 %
Real
estate-construction: Residential-owner-occupied -- -- 0.0 % --
-- 0.0 % -- -- 0.0 % Residential-builder -- -- 0.0 % 4 7,027 18.5 %
4 7,027 9.8 % Commercial
1 465
1.4 % 4
15,416 40.6 % 5
15,881 22.2 % Total
real estate-construction 1 $ 465 1.4 % 8 $ 22,443 59.0 % 9 $ 22,908
32.0 %
Consumer 2 32 0.1 % -- -- 0.0 % 2 32 0.0 %
Farmland -- --
0.0 % --
-- 0.0 % --
-- 0.0 % Total
25 $ 33,671 100.0 % 18 $ 38,015 100.0 % 43 $ 71,686 100.0 %
Troubled Debt Restructurings
(TDRs) -
By Quarterly Review / Maturity
Date
As of September 30, 2011 Reviewable TDRs Permanent
TDRs Total TDRs
# ofLoans
Balance
As % ofBalance
# ofLoans
Balance
As % ofBalance
# ofLoans
Balance
As % ofBalance
Review / Maturity by Quarter:
2011 4th Quarter
10
12,151 36.1 % 5
11,065 29.1 %
15 23,216 32.4
% 2012 1st Quarter 7 4,670 13.9 % -- -- 0.0 % 7
4,670 6.5 % 2nd Quarter 2 1,595 4.7 % 1 1,826 4.8 % 3 3,421 4.8 %
3rd Quarter 4 14,540 43.2 % -- -- 0.0 % 4 14,540 20.3 % 4th Quarter
-- -- 0.0
% 4 11,450
30.1 % 4
11,450 16.0 % Total 2012: 13
$ 20,805 61.8 % 5 $ 13,276 34.9 % 18 $ 34,081 47.5 %
2013 &
beyond 2 715 2.1
% 8 13,674
36.0 % 10
14,389 20.1 % Total
25 $ 33,671 100.0 % 18 $ 38,015 100.0 % 43 $ 71,686 100.0 %
Troubled
Debt Restructurings (TDRs)
Migration by Quarter
As of September 30, 2011
(000s)
4/1/09 to
6/30/09
7/1/09 to
9/30/09
10/1/09 to
12/31/09
1/1/10 to
3/31/10
4/1/10 to
6/30/10
7/1/10 to
9/30/10
10/1/10 to
12/31/10
Period Beginning Balance -- $ 33,309 $ 37,425 $ 71,885 $
80,993 $ 96,976 $ 105,617
Additions: New Loans Added
$ 33,309 $ 5,226 $ 37,663 $ 23,477 $ 21,720 $ 12,698 $ 12,377 Loan
Advances
-- 974
348 219
472 220
531 Subtotal Additions: $ 33,309
$ 6,200 $ 38,011 $ 23,696 $ 22,192 $ 12,918 $ 12,908
Deductions: Sales Proceeds -- $ 944 $ 1,530 $ 1,218 $ 761 --
$ 125 Payments -- 317 174 50 1,202 1,138 433 Reviews -- -- 229 75
3,714 2,468 -- Upgrades -- -- -- -- -- -- 11,000 Partial TDR
Charge-Offs -- -- -- -- -- -- -- Transfers to NPA
-- 823
1,618 13,245
532 671
3,971 Subtotal Deductions: -- $ 2,084 $ 3,551 $
14,588 $ 6,209 $ 4,277 $ 15,529
Net Increase /
(Decrease) $ 33,309 $ 4,116 $ 34,460 $ 9,108 $ 15,983 $ 8,641
($ 2,621 )
% Increase / (Decrease) from Preceding
Period 12.4 % 92.1 % 12.7 % 19.7 % 8.9 % (2.5 %)
Period Ended Balance $ 33,309 $ 37,425 $ 71,885 $ 80,993 $
96,976 $ 105,617 $ 102,996
1/1/11 to
3/31/11
4/1/11 to
6/30/11
7/1/11 to
9/30/11
TOTAL Period Beginning Balance $ 102,996
$ 91,876 $ 81,070
Additions: New Loans Added $ 3,188
$ 116 $ 984 $ 150,758 Loan Advances
486
197 53
3,500 Subtotal Additions: $ 3,674 $ 313 $ 1,037
$ 154,258 Deductions: Sales Proceeds $
367 $ 126 $ 4,597 $ 9,668 Payments 1,989 1,715 532 7,550 Reviews
5,731 640 4,292 17,149 Upgrades -- -- -- 11,000 Partial TDR
Charge-Offs 5,656 3,000 -- 8,656 Transfers to NPA
1,051 5,638
1,000 28,549
Subtotal Deductions: $ 14,794 $ 11,119 $ 10,421
$
82,572 Net Increase / (Decrease) ($ 11,120 )
($10,806 ) ($9,384 ) $ 71,686
% Increase / (Decrease)
from Preceding Period (10.8 %) (11.8 %) (11.6 %)
Period Ended Balance $ 91,876 $ 81,070
$
71,686 $ 71,686
As of September 30, (Dollars in thousands)
2011 2010 % Change 06/30/11 %
Change
Loan Portfolio: Commercial $
229,651 $ 207,909 10.5 % $ 233,052 -1.5 % Real estate-one-to-four
family residential: Permanent first and second 261,171 288,318 -9.4
% 261,336 -0.1 % Home equity loans and lines
125,409 134,159 -6.5
% 125,886 -0.4
% Total real estate-one-to-four family residential $
386,580 $ 422,477 -8.5 % $ 387,222 -0.2 % Real estate-multi-family
residential 72,472 86,896 -16.6 % 85,667 -15.4 % Real
estate-non-farm, non-residential: Owner-occupied 466,432 476,812
-2.2 % 454,960 2.5 % Non-owner-occupied
659,871
662,695 -0.4 %
648,619 1.7 % Total real
estate-non-farm, non-residential $ 1,126,303 $ 1,139,507 -1.2 % $
1,103,579 2.1 % Real estate-construction:
Residential-owner-occupied 12,800 15,152 -15.5 % 17,212 -25.6 %
Residential-builder 138,921 174,896 -20.6 % 134,002 3.7 %
Commercial
171,922 185,444
-7.3 % 178,144
-3.5 % Total real estate-construction $
323,643 $ 375,492 -13.8 % $ 329,358 -1.7 % Consumer 8,882 9,794
-9.3 % 10,438 -14.9 % Farmland
2,538
2,410 5.3 %
2,498 1.6 % Total loans $
2,150,069 $ 2,244,485 -4.2 % $ 2,151,814 -0.1 % Less unearned
income 3,622 3,675 -1.4 % 3,648 -0.7 % Less allowance for loan
losses
49,405 62,776
-21.3 % 53,217
-7.2 % Loans, net $ 2,097,042 $ 2,178,034
-3.7 % $ 2,094,949 0.1 %
(Dollars in thousands) As of September 30, 2011
Residential,
Acquisition, Development and Construction
By County/Jurisdiction of
Origination:
TotalOutstandings
Percentageof Total
Non-accrualLoans
Non-accrualsas a % ofOutstandings
Net charge-offs as a % ofOutstandings
District of Columbia $ 5,648 3.7 % $ -- -- --
Montgomery, MD -- -- -- -- -- Prince Georges, MD 16,615 11.0 %
11,325 7.5 % 0.7 % Other Counties in MD 6,348 4.2 % -- -- --
Arlington/Alexandria, VA 28,734 18.9 % -- -- 0.3 % Fairfax, VA
37,204 24.5 % 826 0.5 % 0.1 % Culpeper/Fauquier, VA 1,108 0.7 % 362
0.2 % 0.3 % Frederick, VA 3,730 2.5 % 3,730 2.5 % 1.7 % Loudoun, VA
16,080 10.6 % 248 0.2 % -- Prince William, VA 9,873 6.5 % 1,026 0.7
% 0.8 % Spotsylvania, VA 353 0.2 % -- -- -- Stafford, VA 20,698
13.6 % 2,664 1.8 % -- Other Counties in VA 2,051 1.4 % -- -- --
Outside VA, D.C. & MD
3,279
2.2 % --
-- -- $ 151,721 100.0 % $
20,181 13.4 % 3.9 % (Dollars in
thousands) As of September 30, 2011
Commercial, Acquisition,
Development and Construction
By County/Jurisdiction of
Origination:
TotalOutstandings
Percentageof Total
Non-accrualLoans
Non-accrualsas a % ofOutstandings
Net charge-offs as a % ofOutstandings
District of Columbia $ 3,074 1.8 % $ -- -- --
Montgomery, MD 1,809 1.1 % -- -- -- Prince Georges, MD 12,490 7.3 %
-- -- -- Other Counties in MD 2,213 1.3 % -- -- --
Arlington/Alexandria, VA 6,799 4.0 % 640 0.4 % 0.5 % Fairfax, VA
27,355 15.9 % 2,800 1.6 % -- Culpeper/Fauquier, VA 3,020 1.8 % --
-- -- Frederick, VA 5,767 3.4 % -- -- -- Henrico, VA 891 0.5 % --
-- -- Loudoun, VA 20,936 12.2 % 579 0.3 % 2.6 % Prince William, VA
51,926 30.2 % 2,064 1.2 % 1.2 % Spotsylvania, VA 1,740 1.0 % -- --
-- Stafford, VA 28,439 16.5 % -- -- -- Other Counties in VA 5,463
3.2 % -- -- -- Outside VA, D.C. & MD
--
-- -- --
-- $ 171,922 100.0 % $ 6,083 3.5 % 4.3 %
(Dollars in thousands) As of
September 30, 2011
Non-Farm/Non-Residential
By County/Jurisdiction of
Origination:
TotalOutstandings
Percentageof Total
Non-accrualLoans
Non-accrualsas a % ofOutstandings
Net charge-offs as a % ofOutstandings
District of Columbia $ 86,196 7.7 % $ -- -- --
Montgomery, MD 27,494 2.4 % -- -- -- Prince Georges, MD 50,975 4.5
% -- -- -- Other Counties in MD 56,745 5.0 % -- -- --
Arlington/Alexandria, VA 186,366 16.5 % 1,258 0.1 % -- Fairfax, VA
277,009 24.6 % 1,150 0.1 % -- Culpeper/Fauquier, VA 3,377 0.3 % --
-- -- Frederick, VA 4,323 0.4 % -- -- -- Henrico, VA 25,765 2.3 %
-- -- 0.3 % Loudoun, VA 106,135 9.4 % 1,425 0.1 % 0.2 % Prince
William, VA 203,050 18.0 % 909 0.1 % -- Spotsylvania, VA 16,691 1.5
% -- -- -- Stafford, VA 19,761 1.8 % -- -- -- Other Counties in VA
54,216 4.8 % 2,825 0.3 % 0.1 % Outside VA, D.C. & MD
8,199 0.7 %
-- -- -- $
1,126,303 100.0 % $ 7,567 0.7 % 0.3 %
Of this total of $1.1 billion in non-farm/non-residential real
estate loans, approximately $13.6 million will mature in 2011,
$94.1 million in 2012 and $95.4 million in 2013.
As of September 30,
(Dollars in thousands) 2011 2010 %
Change 06/30/11 % Change
Investment Securities (at book value):
Available-for-sale (AFS): U.S. government agency obligations $
500,872 $ 279,630 79.1 % $ 410,431 22.0 % Pooled trust preferred
securities 455 1,198 -62.0 % 450 1.1 % Obligations of states and
political subdivisions
68,143
61,232 11.3 %
66,080 3.1 % $ 569,470 $
342,060 66.5 % $ 476,961 19.4 % Held-to-maturity (HTM): U.S.
government agency obligations $ 4,260 $ 7,047 -39.5 % $ 4,864 -12.4
% Obligations of states and political subdivisions
28,835 31,808 -9.3
% 29,227 -1.3
% $ 33,095 $ 38,855 -14.8 % $ 34,091 -2.9 %
Virginia Commerce Bancorp, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share
data)
As of September 30,
(Unaudited)
2011 2010
Assets Cash and due from
banks $ 30,925 $ 34,520 Investment securities, AFS (fair value:
2011, $569,470; 2010, $342,061) 569,470 342,060 Investment
securities, HTM (fair value: 2011, $35,910; 2010, $42,673) 33,095
38,855 Restricted stocks, at cost 11,355 11,752 Federal funds sold
-- 113,250 Interest bearing deposits in other banks 99,000 -- Loans
held-for-sale 17,464 14,175 Loans, net of allowance for loan losses
of $49,405 in 2011 and $62,776 in 2010 2,097,042 2,178,034 Bank
premises and equipment, net 11,442 12,224 Accrued interest
receivable 10,258 10,617
Other real estate owned, net of valuation
allowance of $6,361 in 2011, and $6,001 in
2010
10,377 24,395 Other assets 51,895 66,121 Total assets
$ 2,942,323 $ 2,846,003
Liabilities and Stockholders’
Equity Deposits Demand deposits $ 389,533 $ 269,703
Savings and interest-bearing demand deposits 1,187,329 1,223,748
Time deposits 792,077 830,027 Total deposits $
2,368,939 $ 2,323,478 Securities sold under agreement to repurchase
and federal funds purchased 201,652 178,632 Other borrowed funds
25,000 25,000 Trust preferred capital notes 66,506 66,249 Accrued
interest payable 2,580 3,173 Other liabilities 2,100
2,459 Total liabilities $ 2,666,777 $ 2,598,991
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
$ 66,794 $ 65,082
Common stock, $1.00 par, 50,000,000 shares
authorized, issued and outstanding2011, 29,751,460 including 49,998
in unvested restricted stock issued; 2010,28,893,186 including
9,335 in unvested restricted stock issued
29,702 28,884 Surplus 108,543 104,693 Warrants 8,520 8,520 Retained
earnings 55,565 35,918 Accumulated other comprehensive income, net
6,422 3,915 Total stockholders’ equity $ 275,546 $
247,012 Total liabilities and stockholders’ equity $ 2,942,323 $
2,846,003
Virginia Commerce Bancorp, Inc.
Consolidated Statements of Operations
(Dollars in thousands except per share
data)
(Unaudited)
Three Months Ended Nine Months Ended September 30,
September 30, 2011 2010 2011
2010
Interest and dividend income:
Interest and fees on loans $ 31,456 $ 33,997 $ 95,144 $
100,138 Interest and dividends on investment securities: Taxable
3,185 3,131 9,177 9,722 Tax-exempt 593 554 1,777 1,456 Dividends on
restricted stocks 95 91 287 267 Interest on federal funds sold 53
59 152 137 Interest on deposits in other banks 21
-- 21 -- Total interest
and dividend income $ 35,403 $ 37,832 $ 106,558
$ 111,720
Interest expense: Deposits $ 6,485 $
8,113 $ 20,178 $ 25,972 Securities sold under agreement to
repurchase and federal funds purchased 965 1,023 2,859 3,022 Other
borrowed funds 272 272 806 806 Trust preferred capital notes
952 1,243 3,015 3,702
Total interest expense $ 8,674 $ 10,651 $
26,858 $ 33,502
Net interest income $ 26,729 $
27,181 $ 79,700 $ 78,218 Provision for loan losses 3,933
5,100 11,210 13,538
Net interest income after provision for loan losses $ 22,796
$ 22,081 $ 68,490 $ 64,680
Non-interest income: Service charges and other fees $ 839 $
841 $ 2,430 $ 2,555 Non-deposit investment services commissions 340
222 1,053 529 Fees and net gains on loans held-for-sale 744 908
1,799 1,737 Gain on sale of securities -- -- 503 139 Impairment
loss on securities -- -- (732 ) (1,519 ) Other 17
1,134 619 1,359 Total
non-interest income $ 1,940 $ 3,105 $ 5,672 $
4,800
Non-interest expense: Salaries and employee
benefits $ 6,591 $ 6,253 $ 19,676 $ 18,239 Occupancy expense 2,293
2,414 7,006 7,534 FDIC insurance 864 1,312 3,394 3,953 Loss on
other real estate owned 546 713 1,022 2,691 Franchise tax expense
780 720 2,326 2,155 Data processing expense 652 553 1,942 1,806
Other operating expense 3,167 3,346
8,497 8,428 Total non-interest expense
$ 14,893 $ 15,311 $ 43,863 $ 44,806
Income before taxes $ 9,843 $ 9,875 $ 30,299 $ 24,674 Provision for
income taxes 3,277 2,917 9,931
7,676
Net income $ 6,566 $ 6,958
$ 20,368 $ 16,998 Effective dividend on
preferred stock 1,349 1,250
4,012 3,752
Net income available to common
stockholders $ 5,217 $ 5,708 $ 16,356 $ 13,246 Earnings per
common share, basic $ 0.18 $ 0.21 $ 0.55 $ 0.49 Earnings per common
share, diluted $ 0.17 $ 0.20 $ 0.53 $ 0.46
Virginia Commerce Bancorp, Inc.
Consolidated Average Balances, Yields, and
Rates
Three Months Ended September 30,
(Unaudited)
2011 2010 (Dollars in thousands)
AverageBalance
InterestIncome-Expense
AverageYields/Rates
AverageBalance
InterestIncome-Expense
AverageYields/Rates
Assets Securities (1) $ 524,271 $ 3,778 3.11 % $ 382,399 $
3,685 4.04 % Restricted stock 11,561 95 3.26 % 11,752 91 3.06 %
Loans, net of unearned income (2) 2,147,176 31,456 5.83 % 2,249,901
33,997 6.01 % Interest-bearing deposits in other banks 34,887 21
0.23 % 379 -- 0.11 % Federal funds sold 75,900
53 0.27 % 103,072 59 0.23 %
Total interest-earning assets $ 2,793,795 $ 35,403 5.08 % $
2,747,503 $ 37,832 5.50 % Other assets 82,006 87,488
Total Assets $ 2,875,801 $ 2,834,991
Liabilities
and Stockholders’ Equity Interest-bearing deposits: NOW
accounts $ 317,245 $ 527 0.66 % $ 350,711 $ 749 0.85 % Money market
accounts 221,202 559 1.00 % 157,157 447 1.13 % Savings accounts
655,941 1,452 0.88 % 696,270 2,499 1.42 % Time deposits
779,997 3,947 2.01 % 851,433
4,418 2.06 % Total interest-bearing deposits $
1,974,385 $ 6,485 1.30 % $ 2,055,571 $ 8,113 1.57 % Securities sold
under agreement to repurchase and federal funds purchased 192,823
965 1.99 % 183,564 1,023 2.21 % Other borrowed funds 25,000 272
4.25 % 25,000 272 4.25 % Trust preferred capital notes
66,471 952 5.60 % 66,217
1,243 7.35 %
Total interest-bearing liabilities $
2,258,679 $ 8,674 1.52 % $ 2,330,352 $ 10,651 1.81 % Demand
deposits and other liabilities 346,155 267,952
Total liabilities $ 2,604,834 $ 2,598,304 Stockholders’
equity 270,967 236,687
Total liabilities and
stockholders’ equity $ 2,875,801 $ 2,834,991 Interest rate
spread 3.56 % 3.69 % Net interest income and margin $ 26,729 3.85 %
$ 27,181 3.96 %
(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 $1.0 million and $672
thousand for the three months ended September 30, 2011 and 2010,
respectively.
Virginia Commerce Bancorp, Inc.
Consolidated Average Balances, Yields, and
Rates
Nine Months Ended September 30,
(Unaudited)
2011 2010 (Dollars in thousands)
AverageBalance
InterestIncome-Expense
AverageYields/Rates
AverageBalance
InterestIncome-Expense
AverageYields/Rates
Assets Securities (1) $ 458,694 $ 10,954 3.41 % $ 361,101 $
11,178 4.25 % Restricted stock 11,616 287 3.30 % 11,752 267 3.03 %
Loans, net of unearned income (2) 2,176,604 95,144 5.86 % 2,265,573
100,138 5.92 % Interest-bearing deposits in other banks 12,125 21
0.23 % 204 -- 0.09 % Federal funds sold 74,906
152 0.27 % 79,399 137 0.23 %
Total interest-earning assets $ 2,733,945 $ 106,558 5.27 % $
2,718,029 $ 111,720 5.53 % Other assets 87,199 87,186
Total Assets $ 2,821,144 $ 2,805,215
Liabilities
and Stockholders’ Equity Interest-bearing deposits: NOW
accounts $ 320,380 $ 1,775 0.74 % $ 333,984 $ 2,378 0.95 % Money
market accounts 198,605 1,543 1.04 % 153,121 1,418 1.24 % Savings
accounts 672,553 4,965 0.99 % 646,466 7,477 1.55 % Time deposits
780,310 11,895 2.04 % 912,538
14,699 2.15 % Total interest-bearing deposits
$ 1,971,848 $ 20,178 1.37 % $ 2,046,109 $ 25,972 1.70 % Securities
sold under agreement to repurchase and federal funds purchased
181,226 2,859 2.11 % 183,627 3,022 2.20 % Other borrowed funds
25,000 806 4.25 % 25,000 806 4.25 % Trust preferred capital notes
66,409 3,015 5.99 % 66,154
3,702 7.38 %
Total interest-bearing
liabilities $ 2,244,483 $ 26,858 1.60 % $ 2,320,890 $ 33,502
1.93 % Demand deposits and other liabilities 316,829
255,109
Total liabilities $ 2,561,312 $ 2,575,999
Stockholders’ equity 259,832 229,216
Total
liabilities and stockholders’ equity $ 2,821,144 $ 2,805,215
Interest rate spread 3.67 % 3.60 % Net interest income and margin $
79,700 3.95 % $ 78,218 3.88 %
(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 $3.0 million and $2.0
million for the nine months ended September 30, 2011 and 2010,
respectively.
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