Bank of Virginia Announces Second Quarter 2006 Results4 August 2006
Frank Bell, President and Chief Executive Officer for Bank of Virginia (Nasdaq: BOVA), announced the financial results for the second quarter and six months ended June 30, 2006.
The Bank recorded a net loss of $45,000 or $0.01 per basic and diluted share for the second quarter compared to the same period last year which reflected a net loss of $490,000 or $0.32 per basic and diluted share. The earnings asset base of the Bank, upon which the Bank is primarily dependent to support its operations, continues to grow and the balance sheet showed excellent growth driven by a solid increase in the loan portfolio. Net loans increased from $53.0 million at December 31, 2005 to a quarter-end balance of $81.6 million, representing a 53.9% increase. Deposit balances grew steadily in support of loan demand and were $83.2 million at quarter-end up from $66.0 million at December 31, 2005. Deposit balance growth was realized through competitive pricing and the opening of the Bank's fourth office, located in Chester, Virginia on May 1, 2006. The impact of the Chester branch is anticipated to be negative on earnings in the short term and added an additional $40,000 in operating and start-up cost in the second quarter. Once the deposit base is developed, we anticipate this branch to be a reliable funding source.
Results of operations for the six months ended June 30, 2006 reflected a net loss of $72,000 or $0.02 per basic and diluted share improving from the $1.3 million net loss or $0.85 per basic and diluted share for the comparable period of the prior year. Mr. Bell indicated that the trend toward profitability remains in line with expectations and is made possible by a team of dedicated employees and directors who have worked hard to build a foundation to support a young and growing organization. "The improvement in operating results is the direct result of building the earning asset base of the Bank," stated Mr. Bell. "I cannot say how much I appreciate the efforts put forth by the individuals responsible for the financial milestones we have achieved so far. Although the Bank recorded a net loss for the quarter and year-to-date periods, significant progress towards profitability was made. The Bank continued to invest in the future to support growth plans by opening its newest branch in Chester, Virginia, and although this branch is anticipated to be dilutive to earnings initially, I anticipate this hurdle to be overcome in the near future."
Mr. Bell added, "The operating performance of the Bank is derived primarily from net interest earnings and margin and is impacted by competitive pressure placed on interest spread based revenues caused by a relatively flat yield curve and a highly competitive environment. Despite the competitive pressure to fund the earning asset base, the margin improved and was 3.99% for the six months ended June 30, 2006 in comparison to 3.70% reflected in the comparable period of the prior year. The current demand to fund loan growth has, however, resulted in higher deposit pricing and has resulted in a reduction in the net interest margin from the 4.05% reflected at March 31, 2006. We continue to remain focused on long-term profitability and increased value for our shareholders."
DISCLAIMER
This news release may include forward-looking statements. These forward- looking statements are based on current expectations that involve risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Bank's periodic filings with the Board of Governors of the Federal Reserve System, including the Bank's annual report on Form 10-KSB as filed with the Board of Governors of the Federal Reserve. Pursuant to the Private Securities Litigation Reform Act of 1995, the Bank does not undertake to update forward-looking statements contained within this news release.
FOR MORE INFORMATION,
CONTACT: KENNETH P. MULKEY
AT (804) 744-7576
BANK OF VIRGINIA
Statements of Operations
(Unaudited)
Six Months and Three Months and
Period Ended Period Ended
June 30, June 30,
2006 2005 2006 2005
Interest Interest and
Income: fees on loans $2,595,029 $875,485 $1,464,473 $541,992
Investment
securities 501,271 221,357 253,657 76,021
Interest on
federal
funds sold 52,967 21,887 19,372 18,735
Total interest
income 3,149,267 1,118,729 1,737,502 636,748
Interest Interest on
Expense: deposits 1,203,707 384,418 657,213 230,169
Interest on fed
funds purchased
and FHLB 165,274 3,365 134,306 416
borrowings
Total interest
expense 1,368,981 387,783 791,519 230,585
Net interest
income 1,780,286 730,946 945,983 406,163
Provision for
loan losses 216,900 301,000 135,900 152,000
Net interest
income after
provision for
loan losses 1,563,386 429,946 810,083 254,163
Non- Service charges
interest on deposit
Income accounts 38,835 30,629 20,323 18,711
(Loss): Net gain (loss)
on available for
sale securities 3,356 (132,022) - 52,312
Other fee income 29,529 12,907 15,251 7,829
Total non-
interest income
(loss) 71,720 (88,486) 35,574 78,852
Non- Salaries and
interest employee benefits 1,046,360 1,005,761 542,763 497,388
Expense: Occupancy expense 126,179 153,623 63,578 77,045
Equipment expense 84,376 79,823 44,634 38,295
Data processing 119,993 111,584 58,718 62,514
Marketing expense 53,081 25,838 30,612 15,857
Supplies expense 17,190 16,852 8,393 5,904
Legal and
professional fees 42,881 65,514 23,470 42,111
Other operating
expenses 217,147 177,032 118,964 84,170
Total non-
interest
expenses 1,707,207 1,636,027 891,132 823,284
Net loss $(72,101) $(1,294,567) $(45,475) $(490,269)
Loss per share,
basic and
diluted $(0.02) $(0.85) $(0.01) $(0.32)
Weighted Average
Shares
Outstanding:
Basic 3,031,866 1,525,366 3,031,866 1,525,366
Diluted 3,034,721 1,525,366 3,034,721 1,525,366
At period end:
Book value
per share 5.46 4.44
Market value
per share 8.14 8.00
BANK OF VIRGINIA
Balance Sheets
June 30, December 31,
2006 2005
Unaudited Audited
Assets Cash and due from banks $2,242,037 $1,326,260
Federal funds sold 434,000 8,341,000
2,676,037 9,667,260
Securities available for
sale, at fair market value 20,165,572 19,579,496
Loans, net of allowance for
loan losses of $763,597 in
2006 and $546,697 in 2005 81,567,219 52,996,194
Premises and equipment, net 2,941,986 2,771,484
Accrued interest receivable 518,127 407,153
Other assets 298,793 276,346
Total assets $108,167,734 $85,697,933
Liabilities Deposits:
Noninterest-bearing $7,638,814 $6,180,154
Savings and interest-bearing
demand 18,038,019 20,847,881
Time, $100,000 and over 21,507,374 15,714,802
Other time 35,990,914 23,212,149
Total deposits 83,175,121 65,954,986
Accrued expenses and other
liabilities 442,434 344,235
Federal funds purchased - -
FHLB borrowings 8,000,000 2,500,000
Total liabilities 91,617,555 68,799,221
Stockholders' Preferred stock, $5 par value,
Equity 5,000,000 shares authorized,
none issued - -
Common stock, $2.50 par value,
40,000,000 shares authorized,
3,031,866 shares issued and
outstanding in 2006 and 2005,
respectively 7,579,665 7,579,665
Additional paid-in capital 14,563,408 14,563,408
Retained (deficit) (5,276,810) (5,204,709)
Accumulated other comprehensive
(loss) income (316,084) (39,652)
Total stockholders' equity 16,550,179 16,898,712
Total liabilities and
stockholders' equity $108,167,734 $85,697,933
BANK OF VIRGINIA
Quarterly Performance Summary
(Unaudited)
At and for the Quarter Ended
June 30, March 31,
2006 2006
Interest
Income: Interest and fees on loans $1,464,473 $1,130,556
Investment securities 253,657 247,614
Interest on federal funds sold 19,372 33,595
Total interest income 1,737,502 1,411,765
Interest
Expense: Interest on deposits 657,213 546,494
Interest on fed funds purchased
and FHLB borrowings 134,306 30,968
Total interest expense 791,519 577,462
Net interest income 945,983 834,303
Provision for loan losses 135,900 81,000
Net interest income after
provision for loan losses 810,083 753,303
Non-interest
Income Service charges on deposit accounts 20,323 18,512
(Loss): Net gain on available for sale
securities - 3,356
Other fee income 15,251 14,278
Total non-interest income 35,574 36,146
Non-interest Salaries and employee benefits 542,763 503,597
Expense: Occupancy expense 63,578 62,601
Equipment expense 44,634 39,742
Data processing 58,718 61,275
Marketing expense 30,612 22,469
Supplies expense 8,393 8,797
Legal and professional fees 23,470 19,411
Other operating expenses 118,964 98,183
Total non-interest expenses 891,132 816,075
Net loss $(45,475) $(26,626)
Per Share Loss per share, basic and diluted $(0.01) $(0.01)
Data
Weighted Average Shares
Outstanding, basic 3,031,866 3,031,866
Weighted Average Shares
Outstanding, diluted 3,034,721 3,033,915
At and for the Quarter Ended
Dec. 31, Sept. 30, June 30,
2005 2005 2005
Interest
Income: Interest and fees on
loans $967,793 $738,291 $541,992
Investment securities 135,565 41,932 76,021
Interest on federal funds
sold 69,474 42,192 18,735
Total interest income 1,172,832 822,415 636,748
Interest
Expense: Interest on deposits 456,494 312,456 230,169
Interest on fed funds
purchased and FHLB
borrowings 26,551 1,651 416
Total interest expense 483,045 314,107 230,585
Net interest income 689,787 508,308 406,163
Provision for loan losses 58,050 104,927 152,000
Net interest income
after provision for
loan losses 631,737 403,381 254,163
Non-interest Service charges on deposit
Income accounts 16,119 21,875 18,711
(Loss): Net gain on available
for sale securities - - 52,311
Other fee income 14,031 14,057 7,829
Total non-interest
income 30,150 35,932 78,851
Non-interest Salaries and employee
Expense: benefits 492,098 493,280 497,388
Occupancy expense 59,052 74,110 77,045
Equipment expense 37,761 39,578 38,295
Data processing 62,556 60,256 62,514
Marketing expense 38,454 11,403 15,857
Supplies expense 9,208 4,296 5,904
Legal and professional fees 36,888 45,702 42,111
Other operating expenses 97,588 78,755 84,170
Total non-interest
expenses 833,605 807,380 823,284
Net loss $(171,718) $(368,067) $(490,270)
Per Share Loss per share, basic and
Data diluted $(0.07) $(0.24) $(0.32)
Weighted Average Shares
Outstanding, basic 2,294,991 1,525,366 1,525,366
Weighted Average Shares
Outstanding, diluted 2,294,991 1,525,366 1,525,366
BANK OF VIRGINIA
Balance Sheets
(Unaudited)
As of and for the Quarter Ended
June 30, March 31,
2006 2006
Cash and due from banks $2,242,037 1,721,984
Federal funds sold 434,000 -
Securities available for sale 20,165,572 20,908,060
Loans 82,330,816 67,315,310
Less allowance for loan losses 763,597 627,697
Net loans 81,567,219 66,687,613
Premises and equipment, net 2,941,986 2,717,565
Accrued interest receivable 518,127 438,622
Other assets 298,793 230,324
Total assets $108,167,734 $92,704,168
Deposits:
Noninterest-bearing demand $7,638,814 6,767,355
Savings and interest-bearing demand 18,038,019 16,828,544
Time, $100,000 and over 21,507,374 16,375,016
Other time 35,990,914 26,534,225
Total deposits 83,175,121 66,505,140
Accrued expenses and other liabilities 442,434 391,595
Federal funds purchased - 3,000,000
FHLB borrowings 8,000,000 6,000,000
Total liabilities 91,617,555 75,896,735
Preferred stock - -
Common stock, $2.50 par value 7,579,665 7,579,665
Additional paid-in capital 14,563,408 14,563,408
Retained (deficit) (5,276,810) (5,231,335)
Accumulated other comprehensive (loss)
income (316,084) (104,305)
Total stockholders' equity 16,550,179 16,807,433
Total liabilities and stockholders'
equity $108,167,734 92,704,168
As of and for the Quarter Ended
Dec. 31, Sept. 30, June 30,
2005 2005 2005
Cash and due from banks $1,326,260 1,231,752 1,662,748
Federal funds sold 8,341,000 - 7,576,000
Securities available for sale 19,579,496 6,927,006 2,825,000
Loans 53,542,891 47,920,330 36,731,533
Less allowance for loan losses 546,697 488,647 485,000
Net loans 52,996,194 47,431,683 36,246,533
Premises and equipment, net 2,771,484 2,827,037 2,892,575
Accrued interest receivable 407,153 223,238 155,434
Other assets 276,346 221,461 209,793
Total assets $85,697,933 $58,862,177 $51,568,083
Deposits:
Noninterest-bearing demand $6,180,154 6,504,457 5,477,539
Savings and interest-bearing
demand 20,847,881 14,450,242 16,227,192
Time, $100,000 and over 15,714,802 12,629,805 10,312,277
Other time 23,212,149 14,648,568 12,628,534
Total deposits 65,954,986 48,233,072 44,645,542
Accrued expenses and other
liabilities 344,235 215,588 134,989
Federal funds purchased - 1,505,000 -
FHLB borrowings 2,500,000 2,500,000 -
Total liabilities 68,799,221 52,453,660 44,780,531
Preferred stock - - -
Common stock, $2.50 par value 7,579,665 3,813,415 3,813,415
Additional paid-in capital 14,563,408 7,611,488 7,611,488
Retained (deficit) (5,204,709) (5,032,990) (4,664,923)
Accumulated other comprehensive
(loss) income (39,652) 16,604 27,572
Total stockholders' equity 16,898,712 6,408,517 6,787,552
Total liabilities and
stockholders' equity $85,697,933 $58,862,177 $51,568,083
BANK OF VIRGINIA
Selected Historical Information
(Unaudited)
As of and for the Quarter Ended
June 30, March 31, Dec. 31, Sept. 30, June 30,
2006 2006 2005 2005 2005
Asset Quality Analysis:
Allowance for loan losses:
Beginning balance 627,697 546,697 488,647 485,000 333,000
Provision 135,900 81,000 58,050 104,927 152,000
Charge-offs - - - (101,280) -
Recoveries - - - - -
Net charge-offs - - - (101,280) -
Ending Balance 763,597 627,697 546,697 488,647 485,000
Nonperforming Assets:
Nonaccrual loans - - - - -
Foreclosed real estate - - - - -
Repossessions - - - - -
Loans 90 days or more past
due and still accruing - - - - 101,280
Nonperforming assets - - - - 101,280
Allowance for loan & lease
losses as a percent of
loans 0.00% 0.00% 0.00% 0.00% 0.28%
Source: prnewswire
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