N@N

Virginia Heritage Bank Announces Second Quarter Results for 2011

^{Published on 2011-07-22 03:20:34 - Market Wire}
 

FAIRFAX, Va.--([ BUSINESS WIRE ])--Virginia Heritage Bank (OTCBB: VGBK), reported net income after taxes of $1.2 million in the second quarter of 2011, compared to $624 thousand for the same period in 2010. The increase in net income for the quarter ended June 30, 2011 was primarily due to the $1.1 million increase in net interest income representing strong balance sheet growth. The net income after taxes was $0.27 per share for the second quarter of 2011 (basic and diluted), compared to $0.16 per share (basic and diluted) for the second quarter of 2010.

Net income before taxes for the six months ended June 30, 2011 was $2.9 million, compared to $1.7 million for the six months ended June 30, 2010. The increase was primarily driven by a $1.9 million increase in net interest income representing strong balance sheet growth. Net income after tax expense was $1.9 million for the six months ended June 30, 2011, compared to $3.3 million for the same period in 2010. The significant increase in net income for the six months ended June 30, 2010 was due to the recognition of a one-time deferred income tax benefit of $2.2 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. The net income per share (basic and diluted) was $0.44 per share (basic and diluted) for the six months ended June 30, 2011, compared to $0.87 per share (basic and diluted) for the six months ended June 30, 2010.

The Bank had significant balance sheet growth with total assets of $521 million at June 30, 2011, representing an increase of $116 million compared to total assets at June 30, 2010. Total gross loans were $395 million, excluding loans held for sale, at June 30, 2011, an increase of $51 million over total gross loans at June 30, 2010. Total deposits were $439 million at June 30, 2011 compared to $334 million at June 30, 2010.

Nonperforming assets, including other real estate owned, as a percentage of total assets, decreased to 0.37% at June 30, 2011, compared to 0.58% at June 30, 2010. Annualized net charge-offs were 0.03% of average loans for the quarter ended June 30, 2011, up from 0.01% for the same period in 2010.

The allowance for loan losses was $5.4 million as of June 30, 2011, or 1.38% of gross loans outstanding, excluding loans held for sale. Asset quality remained significantly better than peers at June 30, 2011 with non-accrual loans of $1.0 million, no loans past due 90 days or more but still accruing interest and other real estate owned of $889 thousand. At June 30, 2011, the Banka™s non-performing loans to total assets amounted to 0.20%. 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 that we were one of the first banks in the country to receive funding under the U.S. Treasury Departmenta™s Small Business Lending Fund program. On June 30, 2011, Virginia Heritage Bank sold $15.3 million of preferred stock under the program which increased the Banka™s equity capital to $59.1 million. This capital cushion will allow the Bank to continue to originate commercial, consumer and real estate loans throughout the Washington D.C. metro area as we look to expand our customer base and provide credit to qualified individuals and companies.

Our quarterly and year-to-date results reflect our ongoing commitment to grow the Bank in a prudent fashion. Asset quality, capital levels and core earnings all show positive trends from last quarter and year ago levels. We continue to stay focused on our core lines of business in an effort to generate acceptable returns as we navigate through this very sluggish economic recovery.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.