Virginia Commerce Bancorp, Inc. (the “Company”), VCBI, parent company of Virginia Commerce Bank (the “Bank”), today reported its financial results for the fourth quarter and year ended December 31, 2013.
Fourth Quarter 2013 Highlights
- Net Income Available to Common Stockholders and Earnings per Diluted Common Share: Net income available to common stockholders totaled $7.2 million, or $0.20 per diluted common share, for the fourth quarter of 2013. This compares to $4.2 million, or $0.12 per diluted common share, for the fourth quarter of 2012, and $7.0 million, or $0.20 per diluted common share, for the third quarter of 2013.
- Adjusted Operating Earnings (a non-GAAP measure): Adjusted operating earnings totaled $7.9 million, or $0.22 per diluted common share, for the fourth quarter of 2013. This compares to $5.3 million, or $0.16 per diluted common share, for the fourth quarter of 2012, and $7.9 million, or $0.23 per diluted common share, for the third quarter of 2013.
- Quarterly Return on Average Assets (ROAA) of 1.04% and Return on Average Equity (ROAE) of 10.60%
- Asset Quality: Non-performing assets (“NPAs”) decreased 21.7%, from $50.2 million as of December 31, 2012, to $39.4 million at December 31, 2013, while sequentially increasing $807 thousand, or 2.1%. Total troubled debt restructurings (“TDRs”) declined $22.6 million, or 52.1%, from December 31, 2012, to $20.8 million at December 31, 2013, and declined $987 thousand, or 4.5%, from September 30, 2013.
- Net Interest Margin: The net interest margin was 3.70% in the fourth quarter of 2013, compared to 3.73% and 3.88% in the fourth quarter of 2012 and the sequential quarter, respectively.
- Capital Strength and Book Value per Common Share Growth: The ratio of tangible common equity (a non-GAAP measure) improved to 9.84% at December 31, 2013, as compared to 8.69% and 9.59% at December 31, 2012, and September 30, 2013, respectively. The book value per common share increased from $7.68 at December 31, 2012, to $8.03 at December 31, 2013. Sequentially, the book value per common share increased from $7.88 at September 30, 2013.
Full Year 2013 Highlights
- Net Income Available to Common Stockholders and Earnings per Diluted Common Share: Net income available to common stockholders totaled $27.6 million, or $0.78 per diluted common share, for 2013. This compares to $22.5 million, or $0.67 per diluted common share, for 2012.
- Return on Average Assets (ROAA) of 0.98% and Return on Average Equity (ROAE) of 10.71%
- Net Interest Margin: The net interest margin was 3.81% for 2013, compared to 3.74% for 2012.
SUMMARY REVIEW OF FINANCIAL PERFORMANCE
Net Income
For the three months ended December 31, 2013, the Company recorded net income available to common stockholders of $7.2 million, or $0.20 per diluted common share, compared to net income available to common stockholders of $4.2 million, or $0.12 per diluted common share, for the three months ended December 31, 2012. The year-over-year increase was primarily due to a decrease of $3.5 million in effective dividend to the U.S. Treasury on TARP preferred stock and a decrease of $3.6 million in non-interest expenses, partially offset by a decrease in net interest income after provision for loan losses of $1.5 million and a decrease in non-interest income of $2.8. The Company's net income available to common stockholders increased sequentially from $7.0 million, or $0.20 per diluted common share, for the third quarter of 2013, primarily due to a decrease in non-interest expenses of $1.6 million, partially offset by a decrease in net interest income after provision for loan losses of $854 thousand.
For the twelve months ended December 31, 2013, the Company reported net income available to common stockholders of $27.6 million, or $0.78 per diluted common share, compared to net income available to common stockholders of $22.5 million, or $0.67 per diluted common share, for the same period in 2012. The primary factors driving the year-over-year increase include the Company's repurchase of all of its TARP preferred stock during the fourth quarter of 2012, and related elimination of a $7.6 million effective dividend on preferred stock for the twelve months ended December 31, 2013, a $4.4 million decrease in non-interest expenses, a $1.4 million increase in net interest income after provision for loan losses and a decrease in provision for income taxes of $1.0 million, partially offset by a decrease in non-interest income of $9.3 million.
Adjusted operating earnings (a non-GAAP measure) for the three months ended December 31, 2013, were $7.9 million, or $0.22 per diluted common share, compared to $5.3 million, or $0.16 per diluted common share, for the same period in 2012. The year-over-year improvement in adjusted operating earnings was largely attributable to the Company's repurchase of all of its TARP preferred stock during the fourth quarter of 2012, and related elimination of a $3.5 million effective dividend on preferred stock (which included $2.1 million acceleration of the accretion of the preferred stock discount in the fourth quarter 2012) for the fourth quarter of 2013 and a decrease of $3.6 million in non-interest expenses (which includes $702 thousand of merger-related expenses in the fourth quarter of 2013), partially offset by a decrease in net interest income after provision for loan losses of $1.5 million and a decrease in non-interest income of $2.8 (which includes the impact of gains of $1.5 million generated by the sales of investment securities in the fourth quarter of 2012). On a sequential basis, adjusted operating earnings were down $52 thousand, for the three months ended December 31, 2013, primarily due to a decrease in net interest income after provision for loan losses of $854 thousand, a decrease in non-interest income of $198 thousand and an increase of $315 thousand in provision for income taxes, partially offset by a decrease of $1.6 million in non-interest expenses (which includes a sequential decrease of $453 thousand in merger-related expenses). The Company calculates adjusted operating earnings by excluding impairment loss on investment securities, realized gains and losses on sale of investment securities, merger-related expenses, acceleration of the accretion of the preferred stock discount, and certain other non-recurring items from net income available to common stockholders.
Asset Quality and Provision For Loan Losses
Total non-performing assets and loans 90+ days past due declined $9.4 million, or 18.6%, from $50.2 million at December 31, 2012, to $40.9 million at December 31, 2013, and increased $1.2 million sequentially from $39.7 million at September 30, 2013. The year-over-year improvement was primarily a result of net reductions in loans on non-accrual status of $7.0 million due to sales of underlying properties and note sales completed by the Company in 2013. Other real estate owned declined $3.9 million from December 31, 2012 to December 31, 2013, driven by the sale of large land parcels located in Prince George's County, Maryland and Prince William County, Virginia. As a percentage of total assets, non-performing assets and past due loans decreased from 1.78% at December 31, 2012, to 1.49% at December 31, 2013, and increased from 1.44% at September 30, 2013. As of December 31, 2013, the allowance for loan losses represented 1.88% of total loans, compared to 1.95% and 1.98% at December 30, 2012, and September 30, 2013, respectively. The allowance for loan losses covered 120.03% of total non-performing loans as of December 31, 2013, compared to 112.77% and 137.52%, at December 31, 2012, and September 30, 2013, respectively.
As of December 31, 2013, $9.8 million, or 31.8%, of non-performing loans represented acquisition, development and construction (“ADC”) loans; $7.8 million, or 25.1%, represented non-farm, non-residential loans; $7.9 million, or 25.5%, represented commercial and industrial (“C&I”) loans; and $5.4 million, or 17.6%, represented loans on one-to-four family residential properties. As of December 31, 2013, specific reserves of $19.8 million have been established for non-performing loans and other loans determined to be impaired. The Company continues to pursue an aggressive campaign to reduce non-performing and other impaired loans and is implementing and executing various disposition strategies on an ongoing basis. These strategies are dependent upon project completion, permitting, satisfaction of contract contingencies and other factors and in a number of cases represent situations which require longer timeframes to obtain optimal principal recovery.
Included in the loan portfolio at December 31, 2013, are loans classified as troubled debt restructurings (“TDRs”), totaling $20.8 million, a 52.1% decrease from $43.4 million at December 31, 2012. Sequentially, total TDRs decreased $987 thousand from $21.8 million at September 30, 2013, as a result of TDR reductions of $1.9 million during the fourth quarter of 2013, led by a $1.2 million curtailment received from third-party bond financing of a restaurant property. TDRs 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. A significant portion of TDRs were performing prior to modification. These loans make up 1.0% of the total loan portfolio at December 31, 2013, and represent $8.0 million in ADC loans, $10.7 million in non-farm, non-residential real estate loans, $1.3 million in C&I loans and $768 thousand in one-to-four family residential loans. At December 31, 2013, 40.3% of the Company's TDRs were reviewable TDRs and 59.7% 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.
Classified loans were $139.5 million for the quarter ended December 31, 2013, a $21.1 million decrease from $160.6 million at December 31, 2012. Sequentially, classified loans increased $400 thousand from $139.1 million at September 30, 2013. The year-over-year decrease in classified loans was largely due to payoffs received from third-party refinancing of $10.5 million, regular payments and curtailments of $10.2 million, note sales of $3.3 million, credit upgrades totaling $1.6 million and charge-offs before recoveries of $13.2 million, partially offset by additions to classified loans totaling $17.7 million, substantially concentrated in a relationship of $10.1 million to a government contractor, primarily secured by real estate, and a relationship of $3.6 million to a commercial business, $2.8 million of which is secured by real estate.
Provision for loan losses was $1.3 million for the quarter ended December 31, 2013, down $1.2 million, or 47.9%, compared to $2.6 million in the same period in 2012. Net charge-offs were $3.3 million for the three months ended December 31, 2013, compared to $1.1 million and $2.1 million for the quarters ended December 31, 2012, and September 30, 2013, respectively. For the twelve months ended December 31, 2013, provision for loan losses totaled $7.5 million, compared to $14.8 million for the prior-year period, with twelve months ended December 31, 2013 net charge-offs amounting to $11.4 million, compared to $20.8 million in the twelve months ended December 31, 2012. The decrease in the allowance for loan losses as a percentage of total loans from December 31, 2012, to December 31, 2013, is due to higher specific reserves related to certain credits, partially offset by the decrease in total loans outstanding. As a result, the fourth quarter analysis of the adequacy of the loan loss reserve indicated that loan loss provisioning of $1.3 million was sufficient to maintain appropriate coverage. The $2.2 million increase in net charge-offs for the three months ended December 31, 2013, compared to the same period in 2012, was primarily due to net charge-offs of ADC loans increasing $1.5 million and net recoveries of non-farm, non-residential real estate loans decreasing $536 thousand.
Net Interest Income and Net Interest Margin
Net interest income was $23.9 million for the fourth quarter of 2013 and declined $2.7 million, or 10.2%, from the same quarter last year. The net interest margin decreased three basis points from 3.73% in the fourth quarter of 2012, to 3.70% for the same period in 2013. The year-over-year decrease in the fourth quarter net interest margin was mostly due to a lower average rate earned on loans, net of unearned income, of 4.90%, as compared to 5.43% for the fourth quarter of 2012, the impact of which was largely offset by a reduction in the average time deposit rate from 1.80% in the fourth quarter of 2012 to 1.62% in the fourth quarter 2013. On a sequential basis, the net interest margin was down 18 basis points from 3.88% in the third quarter of 2013. The sequential decrease in the net interest margin was mostly due to a lower average rate earned on loans, net of unearned income, of 4.90%, as compared to 5.21% for the third quarter of 2013, the impact of which was partially offset by an improvement in the mix of interest-bearing deposits and a reduction in the average time deposit rate from 1.70% in the third quarter of 2013 to 1.62% in the fourth quarter 2013. Interest expense decreased $995 thousand to $4.8 million generated on an average total interest-bearing liability balance of $1.99 billion for the fourth quarter of 2013, from $5.8 million generated on an average total interest-bearing liability balance of $2.26 billion for the same period in 2012. The decline in interest expense is mostly attributable to a series of interest rate reductions on interest-bearing deposit products and the continued repricing and run-off of higher cost deposits in the time deposit portfolio. On a sequential basis, interest income decreased $1.6 million to $28.7 million generated on an average total interest-earning asset balance of $2.60 billion for the fourth quarter of 2013, from $30.3 million generated on an average total interest-earning asset balance of $2.62 billion for the third quarter of 2013. The declines in interest income and net interest margin were mostly attributable to the repricing of variable rate and adjustable rate loans in the existing portfolio in the current low interest rate environment, and the origination of new loans at lower rates than the average yield of the existing loan portfolio. The average rate received on total interest-earning assets was 4.44% for the fourth quarter of 2013, as compared to 4.53% for the fourth quarter of 2012, and 4.65% for the third quarter of 2013. The average rate paid on total interest-bearing liabilities was 0.96% for the fourth quarter of 2013, as compared to 1.02% for the fourth quarter of 2012, and 1.00% for the third quarter of 2013.
Non-Interest Income
For the three months ended December 31 2013, the Company recognized $1.6 million in non-interest income, compared to non-interest income of $4.4 million for the same period in 2012, and $1.8 million in the sequential quarter. Included in the fourth quarter 2012 non-interest income was a gain on sale of securities of $1.5 million, while the fourth quarter of 2013 and the sequential quarter did not include a gain or loss on sale of securities. The Company recognized non-interest income of $8.2 million for the twelve months ended December 31, 2013, compared to non-interest income of $17.5 million for the same period in 2012. For the twelve months ended December 31, 2012, non-interest income included a gain on sale of securities of $7.4 million, while non-interest income for the twelve months ended December 31, 2013, did not include a gain or loss on sale of securities.
Fees and net gains on loans held-for-sale decreased in the fourth quarter 2013, on a year-over-year basis, by $1.5 million and on a sequential quarter basis decreased by $220 thousand. The decrease can be attributed to a significantly lower volume of mortgage loans originated for sale in the secondary market in response to higher interest rates which decreased refinance activity and a focus on one-to-four family residential loans held in portfolio due to less competitive rates on mortgage products offered by correspondents in the secondary mortgage market. For the twelve months ended December 31, 2013, fees and net gains on loans held-for-sale decreased $2.4 million, or 52.8%, compared to the twelve months ended December 31, 2012. Income generated by bank-owned life insurance increased $60 thousand and $810 thousand for the three months ended December 31, 2013, and twelve months ended December 31, 2013, respectively, compared to the same periods in the prior year. The increase can be primarily attributed to $30.0 million in bank-owned life insurance assets purchased during the second half of 2012 that have contributed to earnings during the full year end December 31, 2013.
Non-Interest Expense
Non-interest expense decreased $3.6 million, or 21.2%, from $16.8 million in the fourth quarter of 2012, to $13.3 million in the fourth quarter of 2013. Sequentially, non-interest expense decreased $1.6 million, or 10.7%, from $14.9 million for the third quarter in 2013. The year-over-year decrease was primarily related to a decrease of $1.2 million in salaries and employee benefits, a decrease of $210 thousand in FDIC insurance premiums, a decrease of $2.0 million in loss on other real estate owned and a $548 thousand decrease in other operating expense, partially offset by $702 thousand in merger-related expenses during the fourth quarter of 2013. The sequential decrease was primarily related to a decrease in loss on other real estate owned of $292 thousand, a decrease of $309 thousand in other real estate owned expenses and a decrease of $453 thousand in merger-related expenses.
Investment Securities
Investment securities decreased $32.4 million, or 6.6%, year-over-year to $461.0 million at December 31, 2013, and were down $20.1 million sequentially from September 30, 2013. There was no gain or loss on sale of investment securities during the fourth quarter and twelve months ended December 31, 2013, compared to gains on sale of investment securities of $1.5 million and $7.4 million during the three and twelve months ended December 31, 2012, respectively. The investment portfolio contains two pooled trust preferred investment securities with a book value of $5.1 million, and a market value of $1.7 million at December 31, 2013, for which the Company performs a quarterly analysis to determine whether any other-than-temporary impairment exists. The analysis includes stress tests on the underlying collateral and cash flow estimates based on the current and projected future levels of deferrals, defaults, and prepayments within each pool. There was no recorded impairment loss for the three or twelve months ended December 31, 2013 and December 31, 2012.
Loans
Loans, net of allowance for loan losses, decreased $115.2 million, or 5.4%, from $2.14 billion at December 31, 2012, to $2.03 billion at December 31, 2013. Non-farm, non-residential real estate loans decreased $70.5 million, or 6.1%; C&I loans decreased $44.4 million, or 17.0%; ADC loans decreased $20.3 million, or 7.2%; while multifamily real estate loans increased $2.6 million, or 3.4%; one-to-four family residential loans increased $12.7 million, or 3.2%; consumer loans increased $672 thousand, or 8.1%; and farmland loans increased $372 thousand, or 7.6%, from December 31, 2012 to December 31, 2013. Sequentially, loans, net of allowance for loan losses, increased $8.7 million, or 0.43% primarily as a result of a $6.6 million, or 1.6%, increase in one-to-four family residential loans and a $10.7 million, or 15.2%, increase in multi-family real estate loans, partially offset by a $5.4 million, or 0.5%, decline in non-farm, non-residential loans, a $3.5 million, or 1.3%, decline in ADC loans and a $1.5 million, or 0.7%, decline in C&I loans. The year-over-year and sequential decreases in non-farm, non-residential real estate and ADC loans were driven by a highly competitive loan origination environment which drove increased refinancing activity and strategic loan sales and problem loan workouts initiated to improve asset quality. The year-over-year and sequential decrease in C&I loans was attributable to lower borrowing activity due to the impact of sequestration on government contracting sector borrowers and pay downs resulting from problem loan resolution activities. The year-over-year and sequential increases in one-to-four family residential loans were due to an increased emphasis on portfolio lending as a result of less competitive product offerings from secondary market correspondents.
Deposits
Total deposits at December 31, 2013, were $2.05 billion, a decrease of $192.9 million, or 8.6%, compared to December 31, 2012, with demand deposits increasing $33.0 million, or 7.9%, savings and interest-bearing demand deposits decreasing $128.9 million, or 10.7%, and time deposits decreasing $96.9 million, or 15.4%. As of December 31, 2013, non-interest bearing demand deposits represented 21.9% of total deposits, compared to 18.5% at December 31, 2012. On a linked quarter basis, deposits decreased $43.1 million, or 2.1%, with demand deposits increasing $3.8 million, or 0.85%, savings and interest-bearing demand accounts decreasing $31.7 million, or 2.9%, and time deposits decreasing $15.2 million, or 2.8%. The reduction in interest-bearing and time deposits has been intentional, resulting from a series of interest rate reductions that continued throughout 2013. As a result of deposit rate decreases and an improving deposit mix, the cost of total interest-bearing deposits and total deposits declined from 0.84% and 0.68%, respectively, for the quarter ended December 31, 2012, and 0.75% and 0.60% for the quarter ended September 30, 2013, to 0.73% and 0.57% for the quarter ended December 31, 2013.
Capital Levels and Stockholders' Equity
Stockholders' equity increased $24.7 million, or 10.1%, from $245.3 million at December 31, 2012, to $270.0 million at December 31, 2013, due to $27.6 million in retained earnings from net income available to common stockholders during 2013 and $8.1 million in capital surplus from proceeds and tax benefits related to the exercise of warrants and options during 2013, partially offset by a decrease in other comprehensive income of $12.6 million from December 31, 2012 to December 31, 2013. The decrease in other comprehensive income is directly related to the reduction in fair market value of marketable securities resulting from the rise in long term interest rates during 2013. As a result of these changes, the Company's Tier 1 capital ratio increased from 13.25% at December 31, 2012, to 15.96% at December 31, 2013, and its total qualifying capital ratio increased from 14.51% to 17.21% over the same period. Sequentially, the Company's Tier 1 ratio was up 38 basis points and the total qualifying capital ratio was up 37 basis points, attributable to net income available to common stockholders of $7.2 million in the fourth quarter of 2013. The Company's tangible common equity ratio increased from 8.69% at December 31, 2012, and 9.59% at September 30, 2013, to 9.84% at December 31, 2013. The 115 basis point increase in tangible common equity ratio from December 31, 2012, to December 31, 2013, is primarily due to $27.6 million in retained net income available to common stockholders during the twelve months ended December 31, 2013. Sequentially, the 25 basis point increase in tangible common equity ratio is primarily related to $7.2 million in retained net income available to common stockholders for the fourth quarter of 2013 and a decrease of $11.1 million in total tangible assets during the fourth quarter of 2013, partially offset by a decrease of $2.9 million in other comprehensive income.
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.
On October 17, 2013, the Company's stockholders approved a merger agreement pursuant to which the Company will be acquired by a subsidiary of United Bankshares, Inc. (“United” and such merger, the “Merger”). On October 21, 2013, the shareholders of United also approved the Merger. The Company and United have received regulatory approval for the Merger from the Board of Governors of the Federal Reserve System and the Virginia State Corporation Commission. The Company and United intend to consummate the Merger on January 31, 2014, subject to the satisfaction or waiver of certain customary closing conditions. For more information about this Merger, see the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on January 31, 2013, the Company's Annual Report on Form 10-K filed with the SEC on March 14, 2013, the registration statement filed by United with the SEC on Form S-4 on May 29, 2013 (and all subsequent amendments thereof and prospectus supplements thereunder), and the Company's other filings with the SEC that are available on the SEC's website, www.sec.gov.
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 available to common stockholders excluding impairment loss on investment securities, realized gains and losses on sale of investment securities, merger-related expenses, acceleration of the accretion of the preferred stock discount, and certain other non-recurring items. 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 December 31, 2013, December 31, 2012, and September 30, 2013, is as follows:
|
Three Months
Ended December 31, |
Three Months
Ended September 30, |
||||||||||
| (Dollars in thousands) | 2013 | 2012 | 2013 | ||||||||
| Net Income Available to Common Stockholders | $ | 7,183 | $ | 4,230 | $ | 6,953 | |||||
| Adjustments to net income available to common stockholders: | |||||||||||
| Realized gain on sale of investment securities | -- | (1,454 | ) | -- | |||||||
| Merger-related expenses | 702 | -- | 1,155 | ||||||||
| Net tax effect adjustment | 5 | 509 | (166 | ) | |||||||
| Acceleration of the accretion of the preferred stock discount | -- | 2,061 | -- | ||||||||
| Adjusted Operating Earnings | $ | 7,890 | $ | 5,346 | $ | 7,942 | |||||
| Earnings per common share-diluted | $ | 0.20 | $ | 0.12 | $ | 0.20 | |||||
| Adjustments to earnings per common share-diluted | |||||||||||
| Realized gain on sale of investment securities, net tax affect | -- | $ | (0.02 | ) | -- | ||||||
| Merger-related expenses, net tax affect | $ | 0.02 | -- | $ | 0.03 | ||||||
| Acceleration of the accretion of the preferred stock discount | -- | $ | 0.06 | -- | |||||||
| Adjusted operating earnings per common share-diluted | $ | 0.22 | $ | 0.16 | $ | 0.23 | |||||
The adjusted efficiency ratio is a non-GAAP financial measure that is computed by dividing non-interest expense excluding merger-related expenses, by the sum of net interest income on a tax equivalent basis, and non-interest income excluding realized gains and losses on sale of investment securities, merger-related expenses and certain other non-recurring items. 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 and twelve months ended December 31, 2013 and 2012 is as follows:
| Three Months Ended | Twelve Months Ended | |||||||||||||||
|
(Dollars in thousands) |
December 31, | December 31, | ||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Summary Operating Results: | ||||||||||||||||
| Non-interest expense | $ | 13,268 | $ | 16,843 | $ | 59,818 | $ | 64,239 | ||||||||
| Merger-related expenses | 702 | -- | 2,723 | -- | ||||||||||||
| Adjusted non-interest expense | $ | 12,566 | $ | 16,843 | $ | 57,095 | $ | 64,239 | ||||||||
| Net interest income | $ | 23,898 | $ | 26,603 | $ | 100,737 | $ | 106,667 | ||||||||
| Non-interest income | 1,624 | 4,375 | 8,200 | 17,470 | ||||||||||||
| Gain on sale of investment securities | -- | (1,454 | ) | -- | (7,430 | ) | ||||||||||
| Adjusted non-interest income | $ | 1,624 | $ | 2,921 | $ | 8,200 | $ | 10,040 | ||||||||
| Tax equivalent adjustment | $ | 292 | $ | 355 | $ | 1,345 | $ | 1,446 | ||||||||
|
Total net interest income and non-interest income,
adjusted |
$ | 25,814 | $ | 29,879 | $ | 110,282 | $ | 118,153 | ||||||||
| Efficiency Ratio, adjusted | 48.68 | % | 56.37 | % | 51.77 | % | 54.37 | % | ||||||||
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, and no preferred stock was outstanding during 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 December 31, 2013, December 31, 2012, September 30, 2013 and June 30, 2013 is as follows:
| (Dollars in thousands) | As of December 31 | September 30, | June 30, | |||||||||||||
| 2013 | 2012 | 2013 | 2013 | |||||||||||||
| Tangible common equity: | ||||||||||||||||
| Total stockholders' equity | $ | 270,038 | $ | 245,309 | $ | 264,253 | $ | 253,764 | ||||||||
| Less: | ||||||||||||||||
| Outstanding TARP senior preferred stock | -- | -- | -- | -- | ||||||||||||
| Intangible assets | -- | -- | -- | -- | ||||||||||||
| Tangible common equity | $ | 270,038 | $ | 245,309 | $ | 264,253 | $ | 253,764 | ||||||||
| Total tangible assets | $ | 2,745,269 | $ | 2,823,692 | $ | 2,756,322 | $ | 2,836,235 | ||||||||
| Tangible common equity ratio | 9.84 | % | 8.69 | % | 9.59 | % | 8.95 | % | ||||||||
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 potential benefits and impacts of a merger between the Company and United Bankshares, Inc., our outlook on earnings, including our future net interest margin, and statements regarding asset quality, our loan and investment security portfolios, our deposit portfolio and anticipated changes to our deposit costs and balances, projected growth, capital position, capital strategies, our plans regarding and expected future levels of our non-performing assets, business opportunities in our market and other strategic initiatives or transactions, 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, 2012, and other reports filed with and furnished to the Securities and Exchange Commission, and the registration statement filed by United with the SEC on Form S-4 on May 29, 2013 (and all subsequent amendments thereof and prospectus supplements thereunder).
| Virginia Commerce Bancorp, Inc. | ||||||||||||||||||||||
| Financial Highlights | ||||||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||
| 2013 | 2012 | % Change | 2013 | 2012 | % Change | |||||||||||||||||
| Summary Financial Results: | ||||||||||||||||||||||
| Interest and dividend income | $ | 28,727 | $ | 32,427 | -11.4 | % | $ | 121,298 | $ | 132,938 | -8.8 | % | ||||||||||
| Interest expense | 4,829 | 5,824 | -17.1 | % | 20,561 | 26,271 | -21.7 | % | ||||||||||||||
| Net interest income | 23,898 | 26,603 | -10.2 | % | 100,737 | 106,667 | -5.6 | % | ||||||||||||||
| Provision for loan losses | 1,333 | 2,559 | -47.9 | % | 7,540 | 14,826 | -49.1 | % | ||||||||||||||
| Non-interest income | 1,624 | 4,375 | -62.9 | % | 8,200 | 17,470 | -53.1 | % | ||||||||||||||
| Non-interest expense | 13,268 | 16,843 | -21.2 | % | 59,818 | 64,239 | -6.9 | % | ||||||||||||||
| Income before income taxes | 10,921 | 11,576 | -5.7 | % | 41,579 | 45,072 | -7.7 | % | ||||||||||||||
| Net income | $ | 7,183 | $ | 7,752 | -7.3 | % | $ | 27,635 | $ | 30,100 | -8.2 | % | ||||||||||
| Effective dividend on preferred stock | $ | -- | $ | 3,522 | -100.0 | % | $ | -- | $ | 7,612 | -100.0 | % | ||||||||||
| Net income available to common stockholders | $ | 7,183 | $ | 4,230 | 69.8 | % | $ | 27,635 | $ | 22,488 | 22.9 | % | ||||||||||
| Performance Ratios: | ||||||||||||||||||||||
| Return on average assets | 1.04 | % | 1.03 | % | 0.98 | % | 1.01 | % | ||||||||||||||
| Return on average equity | 10.60 | % | 10.20 | % | 10.71 | % | 10.11 | % | ||||||||||||||
| Net interest margin | 3.70 | % | 3.73 | % | 3.81 | % | 3.74 | % | ||||||||||||||
| Efficiency ratio, adjusted | 48.68 | % | 56.37 | % | 51.77 | % | 54.37 | % | ||||||||||||||
| Per Share Data: | ||||||||||||||||||||||
| Earnings per common share-basic | $ | 0.21 | $ | 0.13 | 61.5 | % | $ | 0.84 | $ | 0.71 | 18.3 | % | ||||||||||
| Earnings per common share-diluted | $ | 0.20 | $ | 0.12 | 66.7 | % | $ | 0.78 | $ | 0.67 | 16.4 | % | ||||||||||
| Average number of shares outstanding: | ||||||||||||||||||||||
| Basic | 33,616,647 | 31,864,436 | 32,931,283 | 31,750,958 | ||||||||||||||||||
| Diluted | 35,964,198 | 33,874,852 | 35,454,002 | 33,702,769 | ||||||||||||||||||
| As of December 31, | As of | |||||||||||||||||||||
| 2013 | 2012 | % Change | 09/30/13 | % Change | ||||||||||||||||||
| Selected Balance Sheet Data: | ||||||||||||||||||||||
| Loans, net of allowance for loan losses | $ | 2,027,694 | $ | 2,142,872 | -5.4 | % | $ | 2,018,996 | 0.4 | % | ||||||||||||
| Investment securities | 461,046 | 493,424 | -6.6 | % | 481,177 | -4.2 | % | |||||||||||||||
| Assets | 2,745,269 | 2,823,692 | -2.8 | % | 2,756,322 | -0.4 | % | |||||||||||||||
| Deposits | 2,052,501 | 2,245,392 | -8.6 | % | 2,095,584 | -2.1 | % | |||||||||||||||
| Stockholders' equity | 270,038 | 245,309 | 10.1 | % | 264,253 | 2.2 | % | |||||||||||||||
| Book value per common share | $ | 8.03 | $ | 7.68 | 4.6 | % | $ | 7.88 | 1.9 | % | ||||||||||||
| Capital Ratios (% of risk weighted assets): | ||||||||||||||||||||||
| Tier 1 capital: | ||||||||||||||||||||||
| Company | 15.96 | % | 13.25 | % | 15.58 | % | ||||||||||||||||
| Bank | 14.45 | % | 12.82 | % | 14.93 | % | ||||||||||||||||
| Total qualifying capital: | ||||||||||||||||||||||
| Company | 17.21 | % | 14.51 | % | 16.84 | % | ||||||||||||||||
| Bank | 15.71 | % | 14.08 | % | 16.19 | % | ||||||||||||||||
| Tier 1 leverage: | ||||||||||||||||||||||
| Company | 12.56 | % | 10.29 | % | 12.07 | % | ||||||||||||||||
| Bank | 11.55 | % | 10.05 | % | 11.80 | % | ||||||||||||||||
| Tangible common equity: | ||||||||||||||||||||||
| Company | 9.84 | % | 8.69 | % | 9.59 | % | ||||||||||||||||
| (Dollars in thousands) | As of December 31, | As of | ||||||||||||||
| 2013 | 2012 | 9/30/2013 | 6/30/2013 | |||||||||||||
| Asset Quality: | ||||||||||||||||
| Non-performing assets: | ||||||||||||||||
| Non-accrual loans: | ||||||||||||||||
| Commercial | $ | 7,893 | $ | 3,317 | $ | 2,663 | $ | 7,249 | ||||||||
| Real estate-one-to-four family residential: | ||||||||||||||||
| Permanent first and second | 3,239 | 3,606 | 2,655 | 2,884 | ||||||||||||
| Home equity loans and lines | 2,206 | 2,498 | 2,382 | 2,230 | ||||||||||||
| Total real estate-one-to-four family residential | $ | 5,445 | $ | 6,104 | $ | 5,037 | $ | 5,114 | ||||||||
| Real estate-multi-family residential | -- | -- | -- | -- | ||||||||||||
| Real estate-non-farm, non-residential: | ||||||||||||||||
| Owner-occupied | 4,560 | 1,791 | 4,571 | 5,302 | ||||||||||||
| Non-owner-occupied | 3,195 | 3,864 | 3,239 | 3,309 | ||||||||||||
| Total real estate-non-farm, non-residential | $ | 7,755 | $ | 5,655 | $ | 7,810 | $ | 8,611 | ||||||||
| Real estate-construction: | ||||||||||||||||
| Residential | 4,236 | 16,976 | 4,112 | 4,628 | ||||||||||||
| Commercial | 5,563 | 5,860 | 8,976 | 8,978 | ||||||||||||
| Total real estate-construction | $ | 9,799 | $ | 22,836 | $ | 13,088 | $ | 13,606 | ||||||||
| Consumer | 14 | 17 | 23 | 16 | ||||||||||||
| Total non-accrual loans | $ | 30,906 | $ | 37,929 | $ | 28,621 | $ | 34,596 | ||||||||
| OREO | 8,445 | 12,302 | 9,923 | 11,290 | ||||||||||||
| Total non-performing assets | $ | 39,351 | $ | 50,231 | $ | 38,544 | $ | 45,886 | ||||||||
| Loans 90+ days past due and still accruing: | ||||||||||||||||
| Commercial | $ | 580 | $ | -- | $ | 250 | $ | -- | ||||||||
| Real estate-one-to-four family residential: | ||||||||||||||||
| Permanent first and second | 949 | -- | 876 | 1,074 | ||||||||||||
| Home equity loans and lines | -- | -- | -- | -- | ||||||||||||
| Total real estate-one-to-four family residential | $ | 949 | $ | -- | $ | 876 | $ | 1,074 | ||||||||
| Real estate-multi-family residential | -- | -- | -- | -- | ||||||||||||
| Real estate-non-farm, non-residential: | ||||||||||||||||
| Owner-occupied | -- | -- | -- | -- | ||||||||||||
| Non-owner-occupied | -- | -- | -- | -- | ||||||||||||
| Total real estate-non-farm, non-residential | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||
| Real estate-construction: | ||||||||||||||||
| Residential | -- | -- | -- | -- | ||||||||||||
| Commercial | -- | -- | -- | -- | ||||||||||||
| Total real estate-construction | $ | -- | $ | -- | $ | -- | $ | -- | ||||||||
| Consumer | -- | -- | -- | -- | ||||||||||||
| Total loans 90+ days past due and still accruing | $ | 1,529 | $ | -- | $ | 1,126 | $ | 1,074 | ||||||||
| Total non-performing assets and past due loans | $ | 40,880 | $ | 50,231 | $ | 39,670 | $ | 46,960 | ||||||||
| Troubled debt restructurings | $ | 20,807 | $ | 43,448 | $ | 21,794 | $ | 26,890 | ||||||||
| Non-performing assets | ||||||||||||||||
| to total loans: | 1.90 | % | 2.29 | % | 1.87 | % | 2.14 | % | ||||||||
| to total assets: | 1.43 | % | 1.78 | % | 1.40 | % | 1.62 | % | ||||||||
| Non-performing assets and past due loans | ||||||||||||||||
| to total loans: | 1.98 | % | 2.29 | % | 1.92 | % | 2.19 | % | ||||||||
| to total assets: | 1.49 | % | 1.78 | % | 1.44 | % | 1.66 | % | ||||||||
| Allowance for loan losses to total loans | 1.88 | % | 1.95 | % | 1.98 | % | 1.92 | % | ||||||||
| Allowance for loan losses to non-performing loans | 120.03 | % | 112.77 | % | 137.52 | % | 115.31 | % | ||||||||
| Total allowance for loan losses | $ | 38,932 | $ | 42,773 | $ | 40,909 | $ | 41,131 | ||||||||
| (Dollars in thousands) | As of December 31 | As of | ||||||||||||||
| 2013 | 2012 | 9/30/13 | 6/30/13 | |||||||||||||
| Loans 30 to 89 days past due and still accruing | ||||||||||||||||
| Commercial | $ | 3,214 | $ | 366 | $ | 6,292 | $ | 8,165 | ||||||||
| Real estate-one-to-four family residential: | ||||||||||||||||
| Permanent first and second | 1,401 | 2,089 | 3,920 | 3,817 | ||||||||||||
| Home equity loans and lines | 239 | 223 | 150 | 198 | ||||||||||||
| Total real estate-one-to-four family residential | $ | 1,640 | $ | 2 ,312 | $ | 4,070 | $ | 4,015 | ||||||||
| Real estate-multi-family residential | -- | -- | -- | -- | ||||||||||||
| Real estate-non-farm, non-residential: | ||||||||||||||||
| Owner-occupied | 1,452 | 1,688 | 3,542 | 2,094 | ||||||||||||
| Non-owner-occupied | 780 | 1,661 | 2,463 | 1,572 | ||||||||||||
| Total real estate-non-farm, non-residential | $ | 2,232 | $ | 3,349 | $ | 6,005 | $ | 3,666 | ||||||||
| Real estate-construction: | ||||||||||||||||
| Residential | 240 | -- | 283 | 530 | ||||||||||||
| Commercial | -- | -- | -- | -- | ||||||||||||
| Total real estate-construction | $ | 240 | $ | -- | $ | 283 | $ | 530 | ||||||||
| Consumer | 39 | 39 | 46 | 3 | ||||||||||||
| Farmland | -- | -- | -- | -- | ||||||||||||
| Total loans 30 to 89 days past due | $ | 7,365 | $ | 6,066 | $ | 16,696 | $ | 16,379 | ||||||||
|
For the three months ended |
For the twelve months ended |
|||||||||||||||
|
December 31, |
December 31, |
|||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Net charge-offs | ||||||||||||||||
| Commercial | $ | 366 | $ | (106 | ) | $ | 2,737 | $ | 4,869 | |||||||
| Real estate-one-to-four family residential: | ||||||||||||||||
| Permanent first and second | $ | (43 | ) | 189 | $ | (12 | ) | 1,480 | ||||||||
| Home equity loans and lines | 66 | 94 | 294 | 1,945 | ||||||||||||
| Total real estate-one-to-four family residential | $ | 23 | $ | 283 | $ | 282 | $ | 3,425 | ||||||||
| Real estate-multi-family residential | -- | -- | -- | ($118 | ) | |||||||||||
| Real estate-non-farm, non-residential: | ||||||||||||||||
| Owner-occupied | $ | (1 | ) | -- | $ | 152 | 2,820 | |||||||||
| Non-owner-occupied | (502 | ) | (1,039 | ) | 1,040 | 2,486 | ||||||||||
| Total real estate-non-farm, non-residential | $ | (503 | ) | $ | (1,039 | ) | $ | 1,192 | $ | 5,306 | ||||||
| Real estate-construction: | ||||||||||||||||
| Residential | $ | 104 | $ | 1,961 | $ | 310 | $ | 6,489 | ||||||||
| Commercial | 3,308 | (19 | ) | 6,809 | 559 | |||||||||||
| Total real estate-construction | $ | 3,412 | $ | 1,942 | $ | 7,119 | $ | 7,048 | ||||||||
| Consumer | 12 | (7 | ) | 50 | 251 | |||||||||||
| Farmland | -- | -- | -- | -- | ||||||||||||
| Total net charge-offs | $ | 3,310 | $ | 1,073 | $ | 11,380 | $ | 20,781 | ||||||||
| Net charge-offs to average loans outstanding | 0.16 | % | 0.05 | % | 0.53 | % | 0.95 | % | ||||||||
| Total provision for loan losses | $ | 1,333 | $ | 2,559 | $ | 7,540 | $ | 14,826 | ||||||||
Classes of total loans by risk rating as of December 31, 2013, are summarized as follows (dollars in thousands):
| Special | Total | |||||||||||||||||
| Internal Risk Rating Grades | Pass | Watch | Mention | Substandard | Doubtful | Loans | ||||||||||||
| Commercial | $ | 156,975 | $ | 26,395 | $ | 7,789 | $ | 24,083 | $ | 1,415 | $ | 216,657 | ||||||
| Real estate-one-to-four family residential: | ||||||||||||||||||
| Permanent first and second | 261,441 | 10,294 | 13,003 | 18,888 | -- | 303,626 | ||||||||||||
| Home equity loans and lines | 99,495 | 2,649 | 1,537 | 3,752 | 1,483 | 108,916 | ||||||||||||
| Total real estate-one-to-four family residential | $ | 360,936 | $ | 12,943 | $ | 14,540 | $ | 22,640 | $ | 1,483 | $ | 412,542 | ||||||
| Real estate-multi-family residential | 77,562 | 3,475 | -- | -- | -- | 81,037 | ||||||||||||
| Real estate-non-farm, non-residential: | ||||||||||||||||||
| Owner-occupied | 336,322 | 34,107 | 26,192 | 30,433 | -- | 427,054 | ||||||||||||
| Non-owner-occupied | 524,883 | 78,938 | 20,957 | 32,936 | -- | 657,714 | ||||||||||||
| Total real estate-non-farm, non-residential | $ | 861,205 | $ | 113,045 | $ | 47,149 | $ | 63,369 | -- | $ | 1,084,768 | |||||||
| Real estate-construction: | ||||||||||||||||||
| Residential | 123,030 | 9,077 | 18,751 | 6,097 | -- | 156,955 | ||||||||||||
| Commercial | 64,152 | 15,135 | 5,121 | 20,355 | -- | 104,763 | ||||||||||||
| Total real estate-construction | $ | 187,182 | $ | 24,212 | $ | 23,872 | $ | 26,452 | -- | $ | 261,718 | |||||||
| Consumer | 8,456 | 195 | 181 | 106 | -- | 8,938 | ||||||||||||
| Farmland | 2,303 | 2,957 | -- | -- | -- | 5,260 | ||||||||||||
| Total | $ | 1,654,619 | $ | 183,222 | $ | 93,531 | $ | 136,650 | $ | 2,898 | $ | 2,070,920 | ||||||
Classes of total loans by risk rating as of December 31, 2012, are summarized as follows (dollars in thousands):
| Special | Total | |||||||||||||||||
| Internal Risk Rating Grades | Pass | Watch | Mention | Substandard | Doubtful | Loans | ||||||||||||
| Commercial | $ | 202,088 | $ | 25,048 | $ | 11,976 | $ | 19,822 | $ | 2,073 | $ | 261,007 | ||||||
| Real estate-one-to-four family residential: | ||||||||||||||||||
| Permanent first and second | 235,672 | 15,585 | 12,233 | 19,038 | 112 | 282,640 | ||||||||||||
| Home equity loans and lines | 106,872 | 2,724 | 1,871 | 4,165 | 1,543 | 117,175 | ||||||||||||
| Total real estate-one-to-four family residential | $ | 342,544 | $ | 18,309 | $ | 14,104 | $ | 23,203 | $ | 1,655 | $ | 399,815 | ||||||
| Real estate-multi-family residential | 73,317 | 5,080 | -- | -- | -- | 78,397 | ||||||||||||
| Real estate-non-farm, non-residential: | ||||||||||||||||||
| Owner-occupied | 384,923 | 46,123 | 35,675 | 19,757 | -- | 486,478 | ||||||||||||
| Non-owner-occupied | 488,415 | 108,868 | 30,094 | 41,378 | -- | 668,755 | ||||||||||||
| Total real estate-non-farm, non-residential | $ | 873,338 | $ | 154,991 | $ | 65,769 | $ | 61,135 | $ | -- | $ | 1,155,233 | ||||||
| Real estate-construction: | ||||||||||||||||||
| Residential | 104,835 | 17,651 | 20,720 | 26,771 | -- | 169,977 | ||||||||||||
| Commercial | 41,336 | 18,645 | 26,281 | 25,800 | -- | 112,062 | ||||||||||||
| Total real estate-construction | $ | 146,171 | $ | 36,296 | $ | 47,001 | $ | 52,571 | $ | -- | $ | 282,039 | ||||||
| Consumer | 7,744 | 208 | 219 | 95 | -- | 8,266 | ||||||||||||
| Farmland | 1,000 | 3,888 | -- | -- | -- | 4,888 | ||||||||||||
| Total | $ | 1,646,202 | $ | 243,820 | $ | 139,069 | $ | 156,826 | $ | 3,728 | $ | 2,189,645 | ||||||
Classes of total loans by risk rating as of September 30, 2013, are summarized as follows (dollars in thousands):
| Special | Total | |||||||||||||||||
| Internal Risk Rating Grades | Pass | Watch | Mention | Substandard | Doubtful | Loans | ||||||||||||
| Commercial | $ | 162,914 | $ | 21,739 | $ | 8,257 | $ | 23,497 | $ | 1,790 | $ | 218,197 | ||||||
| Real estate-one-to-four family residential: | ||||||||||||||||||
| Permanent first and second | 253,358 | 9,222 | 14,197 | 19,333 | -- | 296,110 | ||||||||||||
| Home equity loans and lines | 100,070 | 2,606 | 1,800 | 3,881 | 1,487 | 109,844 | ||||||||||||
| Total real estate-one-to-four family residential | $ | 353,428 | $ | 11,828 | $ | 15,997 | $ | 23,214 | $ | 1,487 | $ | 405,954 | ||||||
| Real estate-multi-family residential | 66,782 | 3,548 | -- | -- | -- | 70,330 | ||||||||||||
| Real estate-non-farm, non-residential: | ||||||||||||||||||
| Owner-occupied | 353,479 | 36,235 | 23,069 | 26,198 | -- | 438,981 | ||||||||||||
| Non-owner-occupied | 505,643 | 91,680 | 20,785 | 33,098 | -- | 651,206 | ||||||||||||
| Total real estate-non-farm, non-residential | $ | 859,122 | $ | 127,915 | $ | 43,854 | $ | 59,296 | $ | -- | $ | 1,090,187 | ||||||
| Real estate-construction: | ||||||||||||||||||
| Residential | 124,733 | 11,634 | 18,402 | 5,919 | -- | 160,688 | ||||||||||||
| Commercial | 64,946 | 15,201 | 584 | 23,777 | -- | 104,508 | ||||||||||||
| Total real estate-construction | $ | 189,679 | $ | 26,835 | $ | 18,986 | $ | 29,696 | $ | -- | $ | 265,196 | ||||||
| Consumer | 8,307 | 183 | 175 | 119 | -- | 8,784 | ||||||||||||
| Farmland | 2,328 | 3,232 | -- | -- | -- | 5,560 | ||||||||||||
| Total | $ | 1,642,560 | $ | 195,280 | $ | 87,269 | $ | 135,822 | $ | 3,277 | $ | 2,064,208 | ||||||
Classes of total loans by risk rating as of June 30, 2013, are summarized as follows (dollars in thousands):
| Special | Total | |||||||||||||||||
| Internal Risk Rating Grades | Pass | Watch | Mention | Substandard | Doubtful | Loans | ||||||||||||
| Commercial | $ | 180,358 | $ | 24,555 | $ | 10,389 | $ | 30,830 | $ | 1,790 | $ | 247,922 | ||||||
| Real estate-one-to-four family residential: | ||||||||||||||||||
| Permanent first and second | 252,596 | 9,390 | 14,671 | 20,416 | 111 | 297,184 | ||||||||||||
| Home equity loans and lines | 101,633 | 2,875 | 1,541 | 3,729 | 1,489 | 111,267 | ||||||||||||
| Total real estate-one-to-four family residential | $ | 354,229 | $ | 12,265 | $ | 16,212 | $ | 24,145 | $ | 1,600 | $ | 408,451 | ||||||
| Real estate-multi-family residential | 64,416 | 5,026 | -- | -- | -- | 69,442 | ||||||||||||
| Real estate-non-farm, non-residential: | ||||||||||||||||||
| Owner-occupied | 364,632 | 46,316 | 34,076 | 18,797 | -- | 463,821 | ||||||||||||
| Non-owner-occupied | 492,768 | 115,700 | 20,863 | 39,625 | -- | 668,956 | ||||||||||||
| Total real estate-non-farm, non-residential | $ | 857,400 | $ | 162,016 | $ | 54,939 | $ | 58,422 | $ | -- | $ | 1,132,777 | ||||||
| Real estate-construction: | ||||||||||||||||||
| Residential | 124,428 | 13,330 | 19,179 | 6,732 | -- | 163,669 | ||||||||||||
| Commercial | 36,520 | 10,701 | 32,503 | 23,611 | -- | 103,335 | ||||||||||||
| Total real estate-construction | $ | 160,948 | $ | 24,031 | $ | 51,682 | $ | 30,343 | $ | -- | $ | 267,004 | ||||||
| Consumer | 8,503 | 192 | 172 | 149 | -- | 9,016 | ||||||||||||
| Farmland | 2,350 | 3,732 | -- | -- | -- | 6,082 | ||||||||||||
| Total | $ | 1,628,204 | $ | 231,817 | $ | 133,394 | $ | 143,889 | $ | 3,390 | $ | 2,140,694 | ||||||
|
Troubled Debt Restructurings (TDRs) -
By Loan Type |
||||||||||||||||||||||||
| As of December 31, 2013 | Reviewable TDRs | Permanent TDRs | Total TDRs | |||||||||||||||||||||
| (Dollars in thousands) | # of | As % of | # of | As % of | # of | As % of | ||||||||||||||||||
| Loans | Balance | Balance | Loans | Balance | Balance | Loans | Balance | Balance | ||||||||||||||||
| Loan Type: | ||||||||||||||||||||||||
| Commercial | -- | -- | 0.0 | % | 2 | $ | 1,332 | 10.7 | % | 2 | $ | 1,332 | 6.4 | % | ||||||||||
| Real estate-one-to-four family residential: | ||||||||||||||||||||||||
| Permanent first and second | 2 | 768 | 9.2 | % | -- | -- | 0.0 | % | 2 | 768 | 3.7 | % | ||||||||||||
| Home equity loans and lines | -- | -- | 0.0 | % | -- | -- | 0.0 | % | -- | -- | 0.0 | % | ||||||||||||
| Total real estate-one-to-four family residential | 2 | $ | 768 | 9.2 | % | -- | -- | 0.0 | % | 2 | $ | 768 | 3.7 | % | ||||||||||
| Real estate-multi-family residential | -- | -- | 0.0 | % | -- | -- | 0.0 | % | -- | -- | 0.0 | % | ||||||||||||
| Real estate-non-farm, non-residential: | ||||||||||||||||||||||||
| Owner-occupied | 4 | 6,836 | 81.5 | % | -- | -- | 0.0 | % | 4 | 6,836 | 32.9 | % | ||||||||||||
| Non-owner-occupied | 1 | 780 | 9.3 | % | 3 | 3,077 | 24.8 | % | 4 | 3,857 | 18.5 | % | ||||||||||||
| Total real estate-non-farm, non-residential | 5 | $ | 7,616 | 90.8 | % | 3 | $ | 3,077 | 24.8 | % | 8 | $ | 10,693 | 51.4 | % | |||||||||
| Real estate-construction: | ||||||||||||||||||||||||
| Residential | -- | -- | 0.0 | % | -- | -- | 0.0 | % | -- | -- | 0.0 | % | ||||||||||||
| Commercial | -- | -- | 0.0 | % | 4 | 8,014 | 64.5 | % | 4 | 8,014 | 38.5 | % | ||||||||||||
| Total real estate-construction | -- | -- | 0.0 | % | 4 | $ | 8,014 | 64.5 | % | 4 | $ | 8,014 | 38.5 | % | ||||||||||
| Consumer | -- | -- | 0.0 | % | -- | -- | 0.0 | % | -- | -- | 0.0 | % | ||||||||||||
| Farmland | -- | -- | 0.0 | % | -- | -- | 0.0 | % | -- | -- | 0.0 | % | ||||||||||||
| Total | 7 | $ | 8,384 | 100.0 | % | 9 | $ | 12,423 | 100.0 | % | 16 | $ | 20,807 | 100.0 | % | |||||||||
|
Troubled Debt Restructurings (TDRs) -
By Quarterly Review / Maturity Date |
||||||||||||||||||||||||
| As of December 31, 2013 | Reviewable TDRs | Permanent TDRs | Total TDRs | |||||||||||||||||||||
| # of | As % of | # of | As % of | # of | As % of | |||||||||||||||||||
| Loans | Balance | Balance | Loans | Balance | Balance | Loans | Balance | Balance | ||||||||||||||||
| Review / Maturity by Quarter: | ||||||||||||||||||||||||
| 2014 | ||||||||||||||||||||||||
| 1st Quarter | 2 | 768 | 9.2 | % | -- | -- | 0.0 | % | 2 | 768 | 3.7 | % | ||||||||||||
| 2nd Quarter | 2 | 1,678 | 20.0 | % | 1 | 1,026 | 8.3 | % | 3 | 2,704 | 13.0 | % | ||||||||||||
| 3rd Quarter | 2 | 5,582 | 66.6 | % | -- | -- | 0.0 | % | 2 | 5,582 | 26.8 | % | ||||||||||||
| 4th Quarter | -- | -- | 0.0 | % | 1 | 5,400 | 43.4 | % | 1 | 5,400 | 26.0 | % | ||||||||||||
| Total 2014: | 6 | $ | 8,028 | 95.8 | % | 2 | $ | 6,426 | 51.7 | % | 8 | $ | 14,454 | 69.5 | % | |||||||||
|
2015 & beyond |
1 | $ | 356 | 4.2 | % | 7 | $ | 5,997 | 48.3 | % | 8 | $ | 6,353 | 30.5 | % | |||||||||
| Total Loans | 7 | $ | 8,384 | 100.0 | % | 9 | $ | 12,423 | 100.0 | % | 16 | $ | 20,807 | 100.0 | % | |||||||||
| Troubled Debt Restructurings (TDRs) - | ||||||||||||||||||||||||||||||||
| Migration by Quarter | ||||||||||||||||||||||||||||||||
| As of December 31, 2013 | ||||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||||
| 4/1/09 to | 7/1/09 to | 10/1/09 to | 1/1/10 to | 4/1/10 to | 7/1/10 to | 10/1/10 to | 1/1/11 to | |||||||||||||||||||||||||
| 6/30/09 | 9/30/09 | 12/31/09 | 3/31/10 | 6/30/10 | 9/30/10 | 12/31/10 | 3/31/11 | |||||||||||||||||||||||||
| Period Beginning Balance | -- | $ | 33,309 | $ | 37,425 | $ | 71,885 | $ | 80,993 | $ | 96,976 | $ | 105,617 | $ | 102,996 | |||||||||||||||||
| Additions: | ||||||||||||||||||||||||||||||||
| New Loans Added | $ | 33,309 | $ | 5,226 | $ | 37,663 | $ | 23,477 | $ | 21,720 | $ | 12,698 | $ | 12,377 | $ | 3,188 | ||||||||||||||||
| Loan Advances | -- | 974 | 348 | 219 | 472 | 220 | 531 | 486 | ||||||||||||||||||||||||
| Subtotal Additions: | $ | 33,309 | $ | 6,200 | $ | 38,011 | $ | 23,696 | $ | 22,192 | $ | 12,918 | $ | 12,908 | $ | 3,674 | ||||||||||||||||
| Deductions: | ||||||||||||||||||||||||||||||||
| Sales Proceeds | -- | $ | 944 | $ | 1,783 | $ | 1,218 | $ | 761 | -- | $ | 125 | $ | 367 | ||||||||||||||||||
| Payments | -- | 317 | 174 | 50 | 1,202 | 1,138 | 433 | 1,989 | ||||||||||||||||||||||||
| Reviews | -- | -- | 229 | 75 | 3,714 | 2,468 | -- | 5,731 | ||||||||||||||||||||||||
| Upgrades | -- | -- | -- | -- | -- | -- | 11,000 | -- | ||||||||||||||||||||||||
| Partial C/Os w/Continuing TDRs | -- | -- | -- | -- | -- | -- | -- | 5,656 | ||||||||||||||||||||||||
| Charge-offs w/Loans Sold or Settled | -- | -- | 56 | -- | -- | -- | -- | 251 | ||||||||||||||||||||||||
| Transfer to NPA | -- | 823 | 1,309 | 13,245 | 532 | 671 | 3,971 | 800 | ||||||||||||||||||||||||
| Subtotal Deductions: | -- | $ | 2,084 | $ | 3,551 | $ | 14,588 | $ | 6,209 | $ | 4,277 | $ | 15,529 | $ | 14,794 | |||||||||||||||||
| Net Increase / (Decrease) | $ | 33,309 | $ | 4,116 | $ | 34,460 | $ | 9,108 | $ | 15,983 | $ | 8,641 | ($ 2,621 | ) | ($ 11,120 | ) | ||||||||||||||||
| % Increase / (Decrease) from Preceding Period | 12.4 | % | 92.1 | % | 12.7 | % | 19.7 | % | 8.9 | % | (2.5 | %) | (10.8 | %) | ||||||||||||||||||
| Period Ended Balance | $ | 33,309 | $ | 37,425 | $ | 71,885 | $ | 80,993 | $ | 96,976 | $ | 105,617 | $ | 102,996 | $ | 91,876 | ||||||||||||||||
| 4/1/11 to | 7/1/11 to | 10/1/11 to | 1/1/12 to | 4/1/12 to | 7/1/12 to | 10/1/12 to | 1/1/13 to | |||||||||||||||||||||||||
| 6/30/11 | 9/30/11 | 12/31/11 | 3/31/12 | 6/30/12 | 9/30/12 | 12/31/12 | 3/31/13 | |||||||||||||||||||||||||
| Period Beginning Balance | $ | 91,876 | $ | 81,070 | $ | 71,686 | $ | 52,264 | $ | 42,426 | $ | 43,054 | $ | 44,892 | $ | 43,448 | ||||||||||||||||
| Additions: | ||||||||||||||||||||||||||||||||
| New Loans Added | $ | 116 | $ | 984 | $ | 753 | $ | 541 | $ | 1,345 | $ | 8,804 | $ | 6,771 | $ | 231 | ||||||||||||||||
| Loan Advances | 197 | 53 | 40 | 236 | 186 | 46 | 65 | -- | ||||||||||||||||||||||||
| Subtotal Additions: | $ | 313 | $ | 1,037 | $ | 793 | $ | 777 | $ | 1,531 | $ | 8,850 | $ | 6,836 | $ | 231 | ||||||||||||||||
| Deductions: | ||||||||||||||||||||||||||||||||
| Sales Proceeds | $ | 126 | $ | 4,597 | $ | 6,168 | $ | 5,098 | $ | 247 | $ | 531 | $ | 3,904 | $ | -- | ||||||||||||||||
| Payments | 1,715 | 532 | 990 | 226 | 158 | 785 | 72 | 64 | ||||||||||||||||||||||||
| Reviews | 640 | 4,292 | 10,111 | 3,888 | 498 | 1,465 | 635 | 9,689 | ||||||||||||||||||||||||
| Upgrades | -- | -- | -- | -- | -- | -- | 3392 | -- | ||||||||||||||||||||||||
| Partial C/Os w/Continuing TDRs | 3,000 | -- | -- | -- | -- | 2,587 | 0 | -- | ||||||||||||||||||||||||
| Charge-offs w/Loans Sold or Settled | -- | -- | 2,946 | 604 | -- | -- | 0 | -- | ||||||||||||||||||||||||
| Transfer to NPA | 5,638 | 1,000 | -- | 799 | -- | 1,644 | 277 | -- | ||||||||||||||||||||||||
| Subtotal Deductions: | $ | 11,119 | $ | 10,421 | $ | 20,215 | $ | 10,615 | $ | 903 | $ | 7,012 | $ | 8,280 | $ | 9,753 | ||||||||||||||||
| Net Increase / (Decrease) | ($10,806 | ) | ($9,384 | ) | ($19,422 | ) | ($9,838 | ) | $ | 628 | $ | 1,838 | ($1,444 | ) | ($9,522 | ) | ||||||||||||||||
| % Increase / (Decrease) from Preceding Period | (11.8 | %) | (11.6 | %) | (27.1 | %) | (18.8 | %) | 1.5 | % | 4.3 | % | (3.20 | %) | (21.9 | %) | ||||||||||||||||
| Period Ended Balance | $ | 81,070 | $ | 71,686 | $ | 52,264 | $ | 42,426 | $ | 43,054 | $ | 44,892 | $ | 43,448 | $ | 33,926 | ||||||||||||||||
|
Troubled Debt Restructurings (TDRs) - |
|||||||||||||||
| Migration by Quarter |
|
||||||||||||||
| As of December 31, 2013 | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||
| 4/1/13 to | 7/1/13 to | 10/1/13 to | |||||||||||||
| 6/30/13 | 9/30/13 | 12/31/13 | TOTAL | ||||||||||||
| Period Beginning Balance | $ | 33,926 | $ | 26,890 | $ | 21,794 | |||||||||
| Additions: | |||||||||||||||
| New Loans Added | $ | 1,063 | $ | 1,123 | $ | 900 | $ | 172,289 | |||||||
| Loan Advances | -- | -- | -- | 4,073 | |||||||||||
| Subtotal Additions: | $ | 1,063 | $ | 1,123 | $ | 900 | $ | 176,362 | |||||||
| Deductions: | |||||||||||||||
| Sales Proceeds | $ | 46 | $ | -- | $ | -- | $ | 25,915 | |||||||
| Payments | 28 | 5,003 | 1,223 | 16,099 | |||||||||||
| Reviews | 663 | 600 | -- | 44,698 | |||||||||||
| Upgrades | -- | -- | -- | 14,392 | |||||||||||
| Partial C/Os w/Continuing TDRs | -- | -- | -- | 11,243 | |||||||||||
| Charge-offs w/Loans Sold or Settled | 27 | 616 | -- | 4,500 | |||||||||||
| Transfer to NPA | 7,335 | -- | 664 | 38,708 | |||||||||||
| Subtotal Deductions: | $ | 8,099 | $ | 6,219 | $ | 1,887 | $ | 155,555 | |||||||
| Net Increase / (Decrease) | ($7,036 | ) | ($5,096 | ) | ($988 | ) | |||||||||
| % Increase / (Decrease) from Preceding Period | (20.7 | %) | (18.9 | %) | (4.5 | %) | |||||||||
| Period Ended Balance | $ | 26,890 | $ | 21,794 | $ | 20,807 | $ | 20,807 | |||||||
| (Dollars in thousands) | As of December 31, | As of | |||||||||||||
| 2013 | 2012 | % Change | 9/30/13 | % Change | |||||||||||
| Loan Portfolio: | |||||||||||||||
| Commercial | $ | 216,657 | $ | 261,007 | -17.0 | % | $ | 218,197 | -0.71 | % | |||||
| Real estate-one to four family residential: | |||||||||||||||
| Permanent first and second | 303,626 | 282,640 | 7.4 | % | 296,110 | 2.5 | % | ||||||||
| Home equity loans and lines | 108,916 | 117,175 | -7.0 | % | 109,844 | -0.8 | % | ||||||||
| Total real estate-one-to-four family residential | $ | 412,542 | $ | 399,815 | 3.2 | % | $ | 405,954 | 1.6 | % | |||||
| Real estate-multifamily residential | 81,037 | 78,397 | 3.4 | % | 70,330 | 15.22 | % | ||||||||
| Real estate-non-farm, non-residential: | |||||||||||||||
| Owner-occupied | 427,054 | 486,478 | -12.2 | % | 438,981 | -2.72 | % | ||||||||
| Non-owner-occupied | 657,714 | 668,755 | -1.7 | % | 651,206 | 1.00 | % | ||||||||
| Total real estate-non-farm, non-residential | $ | 1,084,768 | $ | 1,155,233 | -6.1 | % | $ | 1,090,187 | -0.50 | % | |||||
| Real estate-construction: | |||||||||||||||
| Residential | 156,955 | 169,977 | -7.7 | % | 160,688 | -2.32 | % | ||||||||
| Commercial | 104,763 | 112,062 | -6.5 | % | 104,508 | 0.24 | % | ||||||||
| Total real estate-construction: | $ | 261,718 | $ | 282,039 | -7.2 | % | $ | 265,196 | -1.31 | % | |||||
| Consumer | 8,938 | 8,266 | 8.1 | % | 8,784 | 1.75 | % | ||||||||
| Farmland | 5,260 | 4,888 | 7.6 | % | 5,560 | -5.40 | % | ||||||||
| Total loans | $ | 2,070,920 | $ | 2,189,645 | -5.4 | % | $ | 2,064,208 | 0.33 | % | |||||
| Less unearned income | 4,294 | 4,000 | 7.3 | % | 4,303 | -0.21 | % | ||||||||
| Less allowance for loan losses | 38,932 | 42,773 | -9.0 | % | 40,909 | -4.83 | % | ||||||||
| Loans, net | $ | 2,027,694 | $ | 2,142,872 | -5.4 | % | $ | 2,018,996 | 0.43 | % | |||||
| (Dollars in thousands) | As of December 31, 2013 | ||||||||||||||
|
Residential, Acquisition, Development and Construction |
|
||||||||||||||
|
|
Non-accruals |
Net charge- |
|||||||||||||
| Total | Percentage | Non-accrual | as a % of |
offs as a % of |
|||||||||||
| By County/Jurisdiction of Origination: | Outstandings | of Total | Loans | Outstandings | Outstandings | ||||||||||
| District of Columbia | $ | 1,445 | 0.9 | % | $ | 300 | 0.2 | % | -- | ||||||
| Montgomery, MD | -- | 0.0 | % | -- | -- | -- | |||||||||
| Prince Georges, MD | 7,180 | 4.6 | % | 3,182 | 2.0 | % | -- | ||||||||
| Other Counties in MD | 1,985 | 1.3 | % | 54 | -- | -- | |||||||||
| Arlington/Alexandria, VA | 37,106 | 23.6 | % | 700 | 0.4 | % | 0.4 | % | |||||||
| Fairfax, VA | 27,717 | 17.7 | % | -- | -- | -- | |||||||||
| Culpeper/Fauquier, VA | 10,726 | 6.8 | % | -- | -- | -- | |||||||||
| Frederick, VA | -- | 0.0 | % | -- | -- | -0.1 | % | ||||||||
| Henrico, VA | 930 | 0.6 | % | -- | -- | -- | |||||||||
| Loudoun, VA | 13,767 | 8.8 | % | -- | -- | -- | |||||||||
| Prince William, VA | 28,309 | 18.0 | % | -- | -- | -- | |||||||||
| Spotsylvania, VA | 648 | 0.4 | % | -- | -- | -- | |||||||||
| Stafford, VA | 20,452 | 13.0 | % | -- | -- | -- | |||||||||
| Other Counties in VA | 4,382 | 2.8 | % | -- | -- | -0.1 | % | ||||||||
| Outside VA, D.C. & MD | 2,308 | 1.5 | % | -- | -- | -- | |||||||||
| $ | 156,955 | 100.0 | % | $ | 4,236 | 2.6 | % | 0.2 | % | ||||||
| (Dollars in thousands) | As of December 31, 2013 | ||||||||||||||
|
Commercial, Acquisition, Development and Construction |
|
||||||||||||||
|
|
Non-accruals |
Net charge- |
|||||||||||||
| Total | Percentage | Non-accrual | as a % of |
offs as a % of |
|||||||||||
| By County/Jurisdiction of Origination: | Outstandings | of Total | Loans | Outstandings | Outstandings | ||||||||||
| District of Columbia | $ | 3,330 | 3.2 | % | $ | -- | -- | -- | |||||||
| Montgomery, MD | 2,000 | 1.9 | % | -- | -- | -- | |||||||||
| Prince Georges, MD | 6,307 | 6.0 | % | -- | -- | -- | |||||||||
| Other Counties in MD | 2,009 | 1.9 | % | -- | -- | -- | |||||||||
| Arlington/Alexandria, VA | 495 | 0.5 | % | 495 | 0.5 | % | -- | ||||||||
| Fairfax, VA | 1,592 | 1.5 | % | -- | -- | 0.2 | % | ||||||||
| Culpeper/Fauquier, VA | 1,348 | 1.3 | % | 1,108 | 1.1 | % | 1.0 | % | |||||||
| Frederick, VA | 2,000 | 1.9 | % | -- | -- | -- | |||||||||
| Henrico, VA | -- | -- | -- | -- | -- | ||||||||||
| Loudoun, VA | 14,442 | 13.8 | % | -- | -- | -- | |||||||||
| Prince William, VA | 43,525 | 41.6 | % | -- | -- | -- | |||||||||
| Spotsylvania, VA | 1,550 | 1.5 | % | -- | -- | -- | |||||||||
| Stafford, VA | 20,788 | 19.8 | % | 3,125 | 2.9 | % | 5.4 | % | |||||||
| Other Counties in VA | 5,377 | 5.1 | % | 835 | 0.8 | % | -- | ||||||||
| Outside VA, D.C. & MD | -- | -- | -- | -- | -- | ||||||||||
| $ | 104,763 | 100.0 | % | $ | 5,563 | 5.3 | % | 6.6 | % | ||||||
| (Dollars in thousands) | As of December 31, 2013 | ||||||||||||||
|
|
|||||||||||||||
| Non-Farm/Non-Residential | Non-accruals |
Net charge- |
|||||||||||||
| Total | Percentage | Non-accrual | as a % of |
offs as a % of |
|||||||||||
| By County/Jurisdiction of Origination: | Outstandings | of Total | Loans | Outstandings | Outstandings | ||||||||||
| District of Columbia | $ | 66,537 | 6.1 | % | $ | -- | -- | -- | |||||||
| Montgomery, MD | 16,237 | 1.5 | % | 1,646 | 0.2 | % | -- | ||||||||
| Prince Georges, MD | 62,394 | 5.8 | % | -- | -- | -- | |||||||||
| Other Counties in MD | 51,148 | 4.7 | % | -- | -- | -- | |||||||||
| Arlington/Alexandria, VA | 144,249 | 13.3 | % | 910 | 0.1 | % | -- | ||||||||
| Fairfax, VA | 250,459 | 23.1 | % | -- | -- | 0.1 | % | ||||||||
| Culpeper/Fauquier, VA | 4,740 | 0.4 | % | 1,549 | 0.1 | % | -- | ||||||||
| Frederick, VA | 7,524 | 0.7 | % | -- | -- | -- | |||||||||
| Henrico, VA | 18,518 | 1.7 | % | -- | -- | -- | |||||||||
| Loudoun, VA | 135,204 | 12.5 | % | 3,650 | 0.3 | % | -- | ||||||||
| Prince William, VA | 200,110 | 18.4 | % | -- | -- | -- | |||||||||
| Spotsylvania, VA | 31,113 | 2.9 | % | -- | -- | -- | |||||||||
| Stafford, VA | 19,093 | 1.8 | % | -- | -- | 0.1 | % | ||||||||
| Other Counties in VA | 68,772 | 6.3 | % | -- | -- | -- | |||||||||
| Outside VA, D.C. & MD | 8,668 | 0.8 | % | -- | -- | -- | |||||||||
| $ | 1,084,768 | 100.0 | % | $ | 7,755 | 0.7 | % | 0.2 | % | ||||||
Of this total of $1.1 billion in non-farm/non-residential real estate loans, approximately $140.8 million will mature in 2014, $66.5 million in 2015 and $108.0 million in 2016.
| As of December 31, | As of | |||||||||||||||
| (Dollars in thousands) | 2013 | 2012 | % Change | 9/30/13 | % Change | |||||||||||
| Investment Securities (at book value): | ||||||||||||||||
| Available-for-sale (AFS): | ||||||||||||||||
| U.S. government agency obligations | $ | 370,051 | $ | 392,867 | -5.8 | % | $ | 386,475 | -4.2 | % | ||||||
| Pooled trust preferred securities | 1,665 | 357 | 366.4 | % | 1,612 | 3.3 | % | |||||||||
| Obligations of states and political subdivisions | 89,330 | 100,200 | -10.8 | % | 93,090 | -4.0 | % | |||||||||
| Total Investment Securities | $ | 461,046 | $ | 493,424 | -6.6 | % | $ | 481,177 | -4.2 | % | ||||||
| Virginia Commerce Bancorp, Inc. | |||||||
| Consolidated Balance Sheets | |||||||
| (Dollars in thousands, except per share data) | |||||||
| (Unaudited, except as of December 31, 2012) | |||||||
| As of December 31, | |||||||
| 2013 | 2012 | ||||||
| Assets | |||||||
| Cash and due from banks | $ | 43,637 | $ | 49,531 | |||
| Investment securities, AFS | 461,046 | 493,424 | |||||
| Restricted stocks, at cost | 11,828 | 10,147 | |||||
| Interest bearing deposits in other banks | 95,000 | 1,000 | |||||
| Loans held-for-sale | 1,241 | 15,195 | |||||
| Loans, net of allowance for loan losses of $38,932 and $42,773 | 2,027,694 | 2,142,872 | |||||
| Bank premises and equipment, net | 8,423 | 10,072 | |||||
| Accrued interest receivable | 7,532 | 8,563 | |||||
| Other real estate owned, net of valuation allowance of $1,973 and $6,374 | 8,445 | 12,302 | |||||
| Bank owned life insurance | 45,579 | 44,393 | |||||
| Other assets | 34,844 | 36,193 | |||||
| Total assets | $ | 2,745,269 | $ | 2,823,692 | |||
| Liabilities and Stockholders' Equity | |||||||
| Deposits | |||||||
| Demand deposits | $ | 449,050 | $ | 416,091 | |||
| Savings and interest-bearing demand deposits | 1,071,455 | 1,200,397 | |||||
| Time deposits | 531,996 | 628,904 | |||||
| Total deposits | $ | 2,052,501 | $ | 2,245,392 | |||
| Securities sold under agreement to repurchase | 290,899 | 250,718 | |||||
| Other borrowed funds | 60,000 | 7,000 | |||||
| Trust preferred capital notes | 67,019 | 66,827 | |||||
| Accrued interest payable | 1,507 | 1,885 | |||||
| Other liabilities | 3,304 | 6,561 | |||||
| Total liabilities | $ | 2,475,231 | $ | 2,578,383 | |||
| Stockholders' Equity | |||||||
| Common stock, $1.00 par value per share, 50,000,000 shares authorized, issued and outstanding December 2013, 33,632,232 including 179,727 in unvested restricted stock issued; December 2012, 31,920,756 including 110,215 in unvested restricted stock issued | $ | 33,452 | $ | 31,811 | |||
| Surplus | 126,588 | 118,508 | |||||
| Warrants | 8,520 | 8,520 | |||||
| Retained earnings | 111,123 | 83,487 | |||||
| Accumulated other comprehensive income (loss), net | (9,645 | ) | 2,983 | ||||
| Total stockholders' equity | $ | 270,038 | $ | 245,309 | |||
| Total liabilities and stockholders' equity | $ | 2,745,269 | $ | 2,823,692 | |||
| Virginia Commerce Bancorp, Inc. | |||||||||||||
| Consolidated Statements of Operations | |||||||||||||
| (Dollars in thousands except per share data) | |||||||||||||
| (Unaudited) | |||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||
| December 31 | December 31, | ||||||||||||
| 2013 | 2012 | 2013 | 2012 | ||||||||||
| Interest and dividend income: | |||||||||||||
| Interest and fees on loans | $ | 25,670 | $ | 29,429 | $ | 109,995 | $ | 120,297 | |||||
| Interest and dividends on investment securities: | |||||||||||||
| Taxable | 2,377 | 2,210 | 8,503 | 9,538 | |||||||||
| Tax-exempt | 535 | 563 | 2,206 | 2,311 | |||||||||
| Dividends on restricted stocks | 119 | 118 | 459 | 428 | |||||||||
| Interest on deposits in other banks | 26 | 107 | 135 | 364 | |||||||||
| Total interest and dividend income | $ | 28,727 | $ | 32,427 | $ | 121,298 | $ | 132,938 | |||||
| Interest expense: | |||||||||||||
| Deposits | $ | 2,975 | $ | 3,880 | $ | 13,020 | $ | 17,548 | |||||
| Securities sold under agreement to repurchase | |||||||||||||
| and federal funds purchased | 938 | 973 | 3,712 | 4,041 | |||||||||
| Other borrowed funds | 29 | -- | 83 | 779 | |||||||||
| Trust preferred capital notes | 887 | 971 | 3,746 | 3,903 | |||||||||
| Total interest expense | $ | 4,829 | $ | 5,824 | $ | 20,561 | $ | 26,271 | |||||
| Net interest income | $ | 23,898 | $ | 26,603 | $ | 100,737 | $ | 106,667 | |||||
| Provision for loan losses | 1,333 | 2,559 | 7,540 | 14,826 | |||||||||
| Net interest income after provision for loan losses | $ | 22,565 | $ | 24,044 | $ | 93,197 | $ | 91,841 | |||||
| Non-interest income: | |||||||||||||
| Service charges and other fees | $ | 920 | $ | 919 | $ | 3,656 | $ | 3,557 | |||||
| Non-deposit investment services commissions | 210 | 181 | 985 | 886 | |||||||||
| Fees and net gains on loans held-for-sale | 101 | 1,572 | 2,119 | 4,485 | |||||||||
| Gain on sale of investment securities | -- | 1,454 | -- | 7,430 | |||||||||
| Bank owned life insurance | 277 | 217 | 1,186 | 376 | |||||||||
| Other | 116 | 32 | 254 | 736 | |||||||||
| Total non-interest income | $ | 1,624 | $ | 4,375 | $ | 8,200 | $ | 17,470 | |||||
| Non-interest expense: | |||||||||||||
| Salaries and employee benefits | $ | 6,223 | $ | 7,407 | $ | 27,550 | $ | 29,924 | |||||
| Occupancy expense | 2,263 | 2,358 | 9,301 | 9,500 | |||||||||
| FDIC insurance premiums | 407 | 617 | 1,943 | 3,105 | |||||||||
| Loss on other real estate owned | (363 | ) | 1,615 | 1,349 | 3,181 | ||||||||
| Other real estate owned expenses | 97 | 92 | 976 | 994 | |||||||||
| Franchise tax expense | 748 | 936 | 2,995 | 3,371 | |||||||||
| Data processing expense | 691 | 770 | 2,795 | 2,762 | |||||||||
| Merger-related expenses | 702 | -- | 2,723 | -- | |||||||||
| Other operating expense | 2,500 | 3,048 | 10,186 | 11,402 | |||||||||
| Total non-interest expense | $ | 13,268 | $ | 16,843 | $ | 59,818 | $ | 64,239 | |||||
| Income before taxes | $ | 10,921 | $ | 11,576 | $ | 41,579 | $ | 45,072 | |||||
| Provision for income taxes | 3,738 | 3,824 | 13,944 | 14,972 | |||||||||
| Net income | $ | 7,183 | $ | 7,752 | $ | 27,635 | $ | 30,100 | |||||
| Effective dividend on preferred stock | -- | $ | 3,522 | -- | $ | 7,612 | |||||||
| Net income available to common stockholders | $ | 7,183 | $ | 4,230 | $ | 27,635 | $ | 22,488 | |||||
| Earnings per common share, basic | $ | 0.21 | $ | 0.13 | $ | 0.84 | $ | 0.71 | |||||
| Earnings per common share, diluted | $ | 0.20 | $ | 0.12 | $ | 0.78 | $ | 0.67 | |||||
| Virginia Commerce Bancorp, Inc. | ||||||||||||||||||
| Consolidated Average Balances, Yields, and Rates | ||||||||||||||||||
| Three Months Ended December 31, | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||
| (Dollars in thousands) |
Average Balance |
Interest Income- Expense |
Average Yields /Rates |
Average Balance |
Interest Income- Expense |
Average Yields /Rates |
||||||||||||
| Assets | ||||||||||||||||||
| Investment securities (1) | $ | 475,154 | $ | 2,912 | 2.69 | % | $ | 543,120 | $ | 2,773 | 2.26 | % | ||||||
| Restricted stock | 11,696 | 119 | 4.04 | % | 10,794 | 118 | 4.34 | % | ||||||||||
| Loans, net of unearned income (2) | 2,078,726 | 25,670 | 4.90 | % | 2,160,768 | 29,429 | 5.43 | % | ||||||||||
| Interest-bearing deposits in other banks | 29,451 | 26 | 0.36 | % | 163,655 | 107 | 0.26 | % | ||||||||||
| Total interest-earning assets | $ | 2,595,027 | $ | 28,727 | 4.44 | % | $ | 2,878,337 | $ | 32,427 | 4.53 | % | ||||||
| Other assets | 149,462 | 107,447 | ||||||||||||||||
| Total Assets | $ | 2,744,489 | $ | 2,985,784 | ||||||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||
| NOW accounts | $ | 412,218 | $ | 271 | 0.26 | % | $ | 424,114 | $ | 363 | 0.34 | % | ||||||
| Money market accounts | 226,215 | 173 | 0.30 | % | 237,037 | 195 | 0.33 | % | ||||||||||
| Savings accounts | 446,446 | 334 | 0.30 | % | 541,836 | 442 | 0.32 | % | ||||||||||
| Time deposits | 537,414 | 2,197 | 1.62 | % | 637,926 | 2,880 | 1.80 | % | ||||||||||
| Total interest-bearing deposits | $ | 1,622,293 | $ | 2,975 | 0.73 | % | $ | 1,840,913 | $ | 3,880 | 0.84 | % | ||||||
| Securities sold under agreement to repurchase and federal funds purchased(3) | 245,164 | 938 | 1.52 | % | 356,590 | 973 | 1.08 | % | ||||||||||
| Other borrowed funds | 57,065 | 29 | 0.20 | % | -- | -- | -- | |||||||||||
| Trust preferred capital notes | 67,019 | 887 | 5.18 | % | 66,791 | 971 | 5.69 | % | ||||||||||
| Total interest-bearing liabilities | $ | 1,991,541 | $ | 4,829 | 0.96 | % | $ | 2,264,294 | $ | 5,824 | 1.02 | % | ||||||
| Demand deposits and other liabilities | 484,088 | 420,026 | ||||||||||||||||
| Total liabilities | $ | 2,475,629 | $ | 2,684,320 | ||||||||||||||
| Stockholders' equity | 268,860 | 301,464 | ||||||||||||||||
| Total liabilities and stockholders' equity | $ | 2,744,489 | $ | 2,985,784 | ||||||||||||||
| Interest rate spread | 3.48 | % | 3.51 | % | ||||||||||||||
| Net interest income and margin | $ | 23,898 | 3.70 | % | $ | 26,603 | 3.73 | % | ||||||||||
|
(1) |
Yields on investment 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 investment securities, which are reflected as a component of stockholders' equity. Average yields on investment 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 $1.9 million and $1.6 million for the three months ended December 31, 2013 and 2012, respectively. | |
| (3) | The securities sold under agreement to repurchase related to customers had an average balance of $170.2 million at an average rate of 0.19% for the three months ended December 31, 2013, and $281.6 million at an average rate of 0.17% for the same period 2012. Also, included are wholesale agreements with an average balance of $75.0 million at an average rate of 4.51% for the three months ended December 31, 2013, and $75.0 million at an average rate of 4.52% for the same period for 2012. | |
| Virginia Commerce Bancorp, Inc. | ||||||||||||||||||
| Consolidated Average Balances, Yields, and Rates | ||||||||||||||||||
| Twelve Months Ended December 31, | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| 2013 | 2012 | |||||||||||||||||
| (Dollars in thousands) |
Average Balance |
Interest Income- Expense |
Average Yields /Rates |
Average Balance |
Interest Income- Expense |
Average Yields /Rates |
||||||||||||
| Assets | ||||||||||||||||||
| Investment securities (1) | $ | 486,316 | $ | 10,709 | 2.44 | % | $ | 571,763 | $ | 11,849 | 2.28 | % | ||||||
| Restricted stock | 10,953 | 459 | 4.19 | % | 11,139 | 428 | 3.84 | % | ||||||||||
| Loans, net of unearned income (2) | 2,137,617 | 109,995 | 5.15 | % | 2,169,441 | 120,297 | 5.56 | % | ||||||||||
| Interest-bearing deposits in other banks | 42,700 | 135 | 0.31 | % | 140,631 | 364 | 0.26 | % | ||||||||||
| Total interest-earning assets | $ | 2,677,586 | $ | 121,298 | 4.58 | % | $ | 2,892,974 | $ | 132,938 | 4.65 | % | ||||||
| Other assets | 129,923 | 76,452 | ||||||||||||||||
| Total Assets | $ | 2,807,509 | $ | 2,969,426 | ||||||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||||||
| Interest-bearing deposits: | ||||||||||||||||||
| NOW accounts | $ | 426,038 | $ | 1,205 | 0.28 | % | $ | 371,740 | $ | 1,335 | 0.36 | % | ||||||
| Money market accounts | 226,674 | 688 | 0.30 | % | 229,748 | 899 | 0.39 | % | ||||||||||
| Savings accounts | 474,930 | 1,431 | 0.30 | % | 585,229 | 2,443 | 0.42 | % | ||||||||||
| Time deposits | 576,631 | 9,696 | 1.68 | % | 692,269 | 12,871 | 1.86 | % | ||||||||||
| Total interest-bearing deposits | $ | 1,704,273 | $ | 13,020 | 0.76 | % | $ | 1,878,986 | $ | 17,548 | 0.93 | % | ||||||
|
Securities sold under agreement to repurchase and federal funds purchased(3) |
272,040 | 3,712 | 1.36 | % | 330,598 | 4,041 | 1.22 | % | ||||||||||
| Other borrowed funds | 37,258 | 83 | 0.22 | % | 18,052 | 779 | 4.25 | % | ||||||||||
| Trust preferred capital notes | 66,946 | 3,746 | 5.60 | % | 66,695 | 3,903 | 5.85 | % | ||||||||||
| Total interest-bearing liabilities | $ | 2,080,517 | $ | 20,561 | 0.99 | % | $ | 2,294,331 | $ | 26,271 | 1.15 | % | ||||||
| Demand deposits and other liabilities | 468,956 | 377,357 | ||||||||||||||||
| Total liabilities | $ | 2,549,474 | $ | 2,671,688 | ||||||||||||||
| Stockholders' equity | 258,035 | 297,738 | ||||||||||||||||
| Total liabilities and stockholders' equity | $ | 2,807,509 | $ | 2,969,426 | ||||||||||||||
| Interest rate spread | 3.59 | % | 3.50 | % | ||||||||||||||
| Net interest income and margin | $ | 100,737 | 3.81 | % | $ | 106,667 | 3.74 | % | ||||||||||
| (1) | Yields on investment 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 investment securities, which are reflected as a component of stockholders' equity. Average yields on investment 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 $5.6 million and $5.3 million for the twelve months ended December 31, 2013, and 2012, respectively. | |
| (3) | The sold under agreement to repurchase related to customers had an average balance of $197.0 million at an average rate of 0.16% for the twelve months ended December 31, 2013, and $255.6 million at an average rate of 0.25% for the same period 2012. Also, included are wholesale agreements with an average balance of $75.0 million at an average rate of 4.51% for the twelve months ended December 31, 2013, and $75.0 million at an average rate of 4.52% for the same period for 2012. | |
Virginia Commerce Bancorp, Inc.
Mark S. Merrill
Chief
Financial Officer
703-633-6120
mmerrill@vcbonline.com
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