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Virginia Heritage Bank Announces Earnings for the Third Quarter of 2010

^{Published on 2010-10-25 03:40:21 - Market Wire}
 

FAIRFAX, Va.--([ BUSINESS WIRE ])--Virginia Heritage Bank (OTCBB: VGBK), reported net income before taxes of $1.6 million in the third quarter of 2010, compared to $323 thousand for the same period in 2009. The increase in net income for the three months ended September 30, 2010 was primarily due to the $1.3 million increase in net interest income representing strong balance sheet growth. The third quarter net income after taxes was $0.27 per share (basic and diluted), compared to $0.09 per share (basic and diluted) for the third quarter of 2009.

Net income before taxes for the nine months ended September 30, 2010 was $3.3 million, compared to $805 thousand for the nine months ended September 30, 2009. The increase was primarily driven by a $3.4 million increase in net interest income representing strong balance sheet growth and continued improvement in net interest margin.

Net income after tax benefit was $4.3 million for the nine months ended September 30, 2010. The increase in net income after taxes for the nine months ended September 30, 2010 was due to the recognition of a one-time deferred income tax benefit relating to net operating loss carry-forwards from the Banka™s early stage losses and other timing differences in the recognition of income and expense for tax purposes. The net income per share (basic and diluted) was $1.14 per share (basic and diluted), compared to $0.21 per share (basic and diluted) for the nine months ended September 30, 2009.

The Bank had significant balance sheet growth with total assets of $432 million at September 30, 2010, representing an increase of $113 million compared to total assets at September 30, 2009. Total gross loans were $368 million, excluding loans held for sale, at September 30, 2010, an increase of $85 million over total gross loans at September 30, 2009. Total deposits were $362 million at September 30, 2010 compared to $243 million at September 30, 2009.

Nonperforming assets, including other real estate owned, as a percentage of total assets, decreased to 0.62% at September 30, 2010, compared to 0.68% at September 30, 2009. Annualized net charge-offs were 0.24% of average loans for the third quarter of 2010, down from 0.28% for the same period in 2009.

The allowance for loan losses was $4.8 million as of September 30, 2010, or 1.30% of gross loans outstanding, excluding loans held for sale. Asset quality remained significantly better than peers at September 30, 2010 with non-accrual loans of $1.4 million, loans past due 90 days or more but still accruing interest of $17 thousand and other real estate owned of $1.3 million. The Banka™s capital ratios, as set forth in the attached Financial Highlights schedule, are in excess of regulatory requirements.

David P. Summers, Chairman and Chief Executive Officer of the Bank said:

aAlthough local economic growth remains muted, we have been able to expand the Banka™s balance sheet with year over year growth exceeding $113 million. Growth in core deposits has been a priority over the past several quarters in spite of the cost being significantly higher than short term borrowings. The larger banks have reduced their deposit interest rates to such a low level that targeted marketing and promotion has resulted in better than planned levels of core deposit funding. Growth in our core loan product lines has also been realized this year in spite of the weaker economy. We have remained focused on developing quality production, first and foremost, while building a balanced portfolio of consumer and commercial clients. As the economy struggles to recover, we continue to be an active participant in supporting local businesses, including real estate investors and home builders, by providing the capital needed for expansion of their operations.a

Virginia Heritage Bank is headquartered in Fairfax City, Virginia. The Bank has four full service offices in Fairfax City, Chantilly, Gainesville and Vienna, Virginia. A fifth full service office in Loudoun County is in the planning stages and is expected to open early next year subject to regulatory approval. The Bank also has a mortgage division located in Chantilly, Virginia.

This release contains forward-looking statements, including our expectations with respect to future events that are subject to various risks and uncertainties.Factors that could cause actual results to differ materially from managementa™s projections, forecasts, estimates and expectations include: fluctuation in market rates of interest and loan and deposit pricing, adverse changes in the overall national economy as well as adverse economic conditions in our specific market areas, maintenance and development of well-established and valued client relationships and referral source relationships, and acquisition or loss of key production personnel.Other risks that can affect the Bank are detailed from time to time in our quarterly and annual reports filed with the Board of Governors of the Federal Reserve System.We caution readers that the list of factors above is not exclusive.The forward-looking statements are made as of the date of this release, and we may not undertake steps to update the forward-looking statements to reflect the impact of any circumstances or events that arise after the date the forward-looking statements are made.In addition, our past results of operations are not necessarily indicative of future performance.