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Virginia Heritage Bank Announces Earnings for First Quarter of 2011

^{Published on 2011-04-22 10:01:00 - Market Wire}
 

FAIRFAX, Va.--([ BUSINESS WIRE ])--Virginia Heritage Bank (OTCBB: VGBK), reported net income before taxes of $1.2 million in the first quarter of 2011, compared to $730 thousand for the same period in 2010. The increase in net income for the three months ended March 31, 2011 was primarily due to the $835 thousand increase in net interest income representing strong balance sheet growth. The net income after taxes was $0.18 per share for the first quarter of 2011 (basic and diluted), compared to $0.70 per share (basic and diluted) for the first quarter of 2010. During the first quarter of 2010, the Bank recognized a deferred income tax benefit of $1.9 million 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. During the first quarter of 2011, the Bank incurred a tax expense of $399 thousand, resulting in net income after taxes of $766 thousand.

The Bank had significant balance sheet growth with total assets of $482 million at March 31, 2011, representing an increase of $101 million compared to total assets at March 31, 2010. Total gross loans were $384 million, excluding loans held for sale, at March 31, 2011, an increase of $71 million over total gross loans at March 31, 2010. Total deposits were $412 million at March 31, 2011 compared to $300 million at March 31. 2010.

Nonperforming assets, including other real estate owned, as a percentage of total assets, decreased to 0.38% at March 31, 2011, compared to 0.62% at March 31, 2010. Annualized net charge-offs were 0.10% of average loans for the quarter ended March 31, 2011, up from 0.02% for the compared period in 2010.

The allowance for loan losses was $5.1 million as of March 31, 2011, or 1.32% of gross loans outstanding, excluding loans held for sale. Asset quality remained significantly better than peers at March 31, 2011 with non-accrual loans of $958 thousand, loans past due 90 days or more but still accruing interest of $18 thousand and other real estate owned of $889 thousand. At March 31, 2011, the Banka™s non-performing assets to total assets amounted to 0.38%. 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:

aWe are pleased to report these sound operating results for the first quarter of 2011. Pre-tax earnings increased nearly 60% over the first quarter of 2010 with strong balance sheet growth and improved asset quality indicators. We opened our first branch office in Loudoun County in March and are beginning the search for our next branch which will be our sixth. Our balance sheet strategies remain focused on generating sound growth in our core lines of business as we build the VHB franchise in the Northern Virginia market.a

Virginia Heritage Bank is headquartered in Fairfax City, Virginia. The Bank has five full service offices in Fairfax City, Chantilly, Gainesville, Vienna and Dulles, Virginia. 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.