Virginia Commerce Bancorp, Inc. (the “Company”), (Nasdaq: VCBI),
parent company of Virginia Commerce Bank (the “Bank”), today
reported its financial results for the second quarter of 2012.
Second Quarter 2012
Highlights
- Net Income Available to Common
Stockholders and Diluted Earnings per Common Share: Net income
available to common stockholders totaled $6.4 million, or $0.19 per
diluted common share, for the second quarter of 2012. This
represented a $1.1 million decrease, or $0.05 per diluted common
share, compared to $7.5 million, or $0.24 per diluted common share
for the second quarter of 2011. Sequentially, net income available
to common stockholders increased $1.6 million, or $0.05 per diluted
common share, representing a 35.7% increase from $0.14 per diluted
common share, for the first quarter of 2012.
- Asset Quality: Non-performing
assets (“NPAs”) decreased 17.8%, from $73.4 million as of June 30,
2011, to $60.4 million at June 30, 2012, while sequentially
increasing $907 thousand, or 1.5%. Net charge-offs decreased $2.8
million, from $4.7 million during the second quarter of 2011, to
$1.9 million during the second quarter of 2012. Sequentially, net
charge-offs decreased $7.5 million from $9.4 million during the
first quarter of 2012.
- Asset and Loan Growth: Total
assets increased $219.5 million, or 7.8%, from $2.80 billion at
June 30, 2011, to $3.02 billion at June 30, 2012, while
sequentially increasing $63.1 million, or 2.1%, from $2.95 billion
at March 31, 2012. Total loans, net of allowance for loan losses,
increased $36.6 million, or 1.7%, from $2.09 billion at June 30,
2011, to $2.13 billion at June 30, 2012, while sequentially
increasing $32.1 million, or 1.5%, from $2.10 billion at March 31,
2012.
- Net Interest Margin: The net
interest margin was 3.80% in the second quarter of 2012, compared
to 3.99% in the second quarter of 2011. Sequentially, the net
interest margin was stable in the second quarter of 2012,
decreasing one basis point from 3.81% in the first quarter of
2012.
- Capital Strength and Book Value per
Common Share Growth: The ratio of tangible common equity
improved to 7.79% at June 30, 2012, as compared to 7.75% and 7.18%
at March 31, 2012, and June 30, 2011, respectively. The book value
per common share increased to $7.42, as compared to $7.23 and $6.77
at March 31, 2012, and June 30, 2011, respectively.
Peter A. Converse, President and Chief Executive Officer,
commented, “Overall, management is pleased with what we consider a
solid performance in the second quarter. Sequentially, earnings per
diluted common share of $0.19 were up 35.7%. The year-over-year
decrease of $0.05 was primarily attributable to earnings in the
year ago period being bolstered by lower provisioning expense on
almost 3 million less in average diluted shares outstanding at that
time. Asset quality improved nicely year-over-year, with NPAs
decreasing 17.8% to $60.4 million as of June 30, 2012. On a linked
quarter basis, NPAs marginally increased by only $907 thousand, or
1.5%, while loans 30-89 days past due remained under $10 million
for the second consecutive quarter.”
“We are cautiously optimistic about the resumption of our growth
momentum as total assets went over $3 billion for the first time
and net loans as of June 30, 2012, increased 1.7% and 1.5% over the
year ago and prior quarter ends, respectively. However, uncertain
economic conditions and continued competitive pressure from both a
pricing and structuring perspective represent the primary
challenges to that momentum in the near-term.”
Converse concluded, “With our continued earnings progress,
stable asset quality and strong capital ratios, we continue to
focus on initiating the repayment of TARP and will continue to work
with our regulators toward achieving that goal. Although we
anticipated applying to the Federal Reserve for permission to begin
the incremental repayment process as early as the end of June and
have initiated discussions with appropriate Fed officials, on their
guidance, we have delayed our application until at least the end of
the third quarter. To date, we have not been contacted by the
Treasury about our inclusion in any individual or pooled auction,
which we view as a positive validation of our ability to repay TARP
in full in the next 18 months.”
SUMMARY REVIEW OF FINANCIAL PERFORMANCE
Net Income
For the three months ended June 30, 2012, the Company recorded
net income of $7.7 million. After an effective dividend of $1.3
million to the U.S. Treasury on TARP preferred stock, the Company
reported net income to common stockholders of $6.4 million, or
$0.19 per diluted common share, compared to net income available to
common stockholders of $7.5 million, or $0.24 per diluted common
share, in the second quarter of 2011. Sequentially, net income
available to common shareholders increased $1.6 million, or $0.05
per diluted common share, from the first quarter in 2012. For the
six months ended June 30, 2012, the Company reported net income
available to common stockholders of $11.1 million, or $0.33 per
diluted common share, compared to net income available to common
stockholders of $11.1 million, or $0.36 per diluted common share,
for the same period in 2011.
Adjusted operating earnings (a non-GAAP measure) for the three
months ended June 30, 2012, were $5.5 million, or $0.16 per diluted
common share, compared to $7.3 million, or $0.24 per diluted common
share, for the same period in 2011. On a sequential basis, adjusted
operating earnings were up $2.4 million, or $0.07 per diluted
common share, for the three months ended June 30, 2012. The
year-over-year decrease is primarily due to higher provisioning for
loan losses of $1.7 million and increased non-interest expenses of
$1.0 million, partially offset by $700 thousand in reduced
provision for income taxes. The sequential increase in the
Company’s adjusted operating earnings was mostly due to lower
provisioning for loan losses of $2.8 million and decreased
non-interest expenses of $1.1 million, slightly offset by decreased
non-interest income of $264 thousand and a $1.4 million increase in
provision for income taxes. The Company calculates adjusted
operating earnings by excluding impairment losses on securities,
realized gains and losses on sale of securities and death benefits
received from bank-owned life insurance, from net income.
Asset Quality and Provisions For Loan Losses
Total non-performing assets and loans 90+ days past due declined
from $74.7 million at June 30, 2011, to $60.4 million at June 30,
2012, and increased $896 thousand sequentially from $59.5 million
at March 31, 2012. As of June 30, 2012, the allowance for loan
losses represented 2.14% of total loans, compared to 2.11% and
2.47%, at March 31, 2012, and June 30, 2011, respectively. The
allowance for loan losses covered 100.5% of total non-performing
loans as of June 30, 2012, compared to 97.4% and 88.6%, at March
31, 2012, and June 30, 2011, respectively.
Non-performing loans continue to be concentrated in residential
and commercial construction and land development loans in outer
sub-markets hardest hit by the residential downturn and commercial
and consumer credits experiencing the after shocks in
sub-contracting businesses and unemployment levels. Overall, as of
June 30, 2012, $29.2 million, or 63.1%, of non-performing loans
represented acquisition, development and construction (“ADC”)
loans, $5.6 million, or 12.0%, represented non-farm,
non-residential loans, $9.0 million, or 19.4%, represented loans on
one-to-four family residential properties, and $2.5 million, or
5.5%, represented commercial and industrial (“C&I”) loans. As
of June 30, 2012, specific reserves of $20.4 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.
Included in the loan portfolio at June 30, 2012, are loans
classified as troubled debt restructurings (“TDRs”), totaling $43.1
million, a 46.9% decrease from $81.1 million at June 30, 2011.
Sequentially, TDRs increased $628 thousand from $42.4 million at
March 31, 2012. These 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. Over 90% of TDRs were performing prior to modification.
These loans make up 2.0% of the total loan portfolio and represent
$11.3 million in ADC loans, $18.7 million in non-farm,
non-residential real estate loans, $9.3 million in C&I loans
and $3.8 million in one-to-four family residential loans. At June
30, 2012, 16.6% of the Company’s TDRs were reviewable TDRs and
83.4% 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 $189.3 million for the quarter ended June
30, 2012, a $42.9 million decrease from $232.1 million at June 30,
2011. Sequentially, classified loans increased $19.0 million from
$170.3 million at March 31, 2012. The quarterly increase was
largely due to the downgrade of loans representing two credit
relationships from Special Mention to Substandard. These loans are
performing and well-secured, but were downgraded due to delays in
the execution of development plans or pending asset sales projected
to improve borrower cash flow and liquidity. These events are
anticipated to occur as early as this quarter, but at least by
year-end.
Provisions for loan losses were $3.2 million for the quarter
ended June 30, 2012, compared to $1.4 million in the same period in
2011. Net charge-offs were $1.9 million for the three months ended
June 30, 2012, compared to $9.4 million and $4.7 million for the
quarters ended March 31, 2012, and June 30, 2011, respectively. For
the six months ended June 30, 2012, provisions for loan losses
totaled $9.2 million, compared to $7.3 million for the prior year
period, with 2012 year-to-date net charge-offs amounting to $11.3
million, compared to $16.5 million in the first half of 2011. The
higher provision for loan losses in 2012, compared to 2011, coupled
with a reduction in non-performing loans, have contributed to an
increase in the allowance for loan losses to non-performing loans
coverage ratio to 100.5% at June 30, 2012, compared to 88.6% at
June 30, 2011. The lower net charge-off amount of $5.2 million in
the first half of 2012, compared to the same period in 2011, was
primarily do to net charge-offs in the real estate-construction
loan portfolio decreasing $4.5 million, from $8.4 million in the
first half 2011 to $3.9 million in the first half of 2012.
Net Interest Income
Net interest income of $26.9 million for the second quarter of
2012 was up $129 thousand, or 0.5%, over the same quarter last
year. The net interest margin decreased 19 basis points from 3.99%
in the first quarter of 2011, to 3.80% for the same period in 2012.
Year-to-date net interest income of $53.7 million was up 1.4%,
compared to net interest income of $53.0 million for the first six
months of 2011. On a sequential basis, the net interest margin was
down one basis point from 3.81% for the first quarter of 2012 to
3.80% for the second quarter of 2012. The year-over-year decrease
in the net interest margin was primarily driven by lower average
yielding loan and security assets, the impact of which was
partially offset by a lower cost of average interest-bearing
liabilities. Interest and dividend income decreased $2.0 million on
average total interest-earnings assets of $2.89 billion for the
three months ended June 30, 2012, compared to interest and dividend
income generated by average total interest-earnings assets of $2.72
billion for the same period in 2011. The decline in interest and
dividend income is mostly attributable to lower yielding average
loan and security assets being generated in the current low
interest rate environment. Interest expense decreased $2.1 million
on an average total interest-bearing liability balance of $2.30
billion for the quarter ended June 30, 2012, from an average total
interest-bearing liability balance of $2.24 billion for the same
period in 2011. The average rate paid on total interest-bearing
liabilities was 1.18% for the second quarter of 2012, as compared
to 1.26% for the first quarter 2012, and 1.58% for the second
quarter of 2011. Management anticipates the net interest margin
will range between 3.75% and 3.90% for the current year.
Non-Interest Income
For the three months ended June 30, 2012, the Company recognized
$3.4 million in non-interest income, compared to non-interest
income of $2.3 million for the three months ended June 30, 2011.
Included in the second quarter 2012 non-interest income is a gain
on sale of securities of $1.3 million. Non-interest income for the
second quarter 2011 included a bank-owned life insurance death
benefit of $361 thousand. The Company recognized non-interest
income of $8.4 million for the six months ended June 30, 2012,
compared to non-interest income of $3.7 million for the same period
in 2011. For the six months ended June 30, 2012, non-interest
income included a gain on sale of securities of $3.9 million, while
non-interest income for the six months ended June 30, 2011,
included an impairment loss on securities of $732 thousand, which
was partially offset by a gain on sale of securities of $503
thousand, and a bank-owned life insurance death benefit of $361
thousand.
Fees and net gains on loans held-for-sale increased in the
second quarter 2012, on a year-over-year basis by $296 thousand, or
55.4%. The increase can be attributed to greater volume driven by
lower interest rates on mortgage products. For the six months ended
June 30, 2012, fees and net gains on loans held-for-sale increased
$776, or 73.6% compared to the six months ended June 30, 2011.
Mortgage loans held-for sale totaling $85.7 million were closed in
the first half of 2012, as compared to $53.5 million for the first
half of 2011.
Non-Interest Expense
Non-interest expense increased $1.0 million, or 7.1%, from $14.5
million in the second quarter of 2011, to $15.5 million in the
second quarter of 2012. Sequentially, non-interest expense
decreased $1.1 million, or 6.4%, from $16.6 million for the first
quarter in 2012. The majority of the year-over-year increase was an
$813 thousand increase to salaries and employee benefits, and a
$561 thousand increase in loss on other real estate owned,
partially offset by a decrease of $408 thousand in FDIC insurance.
The increase in salaries and employee expense includes $489
thousand in salary expense primarily related to the addition of key
personnel in our sales and support functions to support our
continued growth, and $216 thousand related to commissions paid to
mortgage originators in connection with greater mortgage production
sold into the secondary market. The sequential decrease was driven
by a reduction of $546 thousand in salary and employee benefits
with lower employee benefits of $266 thousand and an increase of
$153 thousand in deferred compensation costs in connection with
increased loan originations during the second quarter of 2012. The
sequential decrease also included a reduction of other expenses of
$359 thousand, which included of $56 thousand in loss on other real
estate owned, $138 thousand in professional services and legal
costs, and $162 thousand in FDIC insurance.
Investment Securities
Investment securities increased $55.6 million, or 10.9%,
year-over-year to $566.7 million at June 30, 2012, and were down
$31.5 million sequentially from March 31, 2012. During the second
quarter of 2012, the Company sold $67.9 million of investment
securities resulting in a $1.3 million realized gain on sale of
securities. The investment portfolio also contains three pooled
trust preferred securities with a book value of $5.6 million, and a
fair value of $339 thousand at June 30, 2012, 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 and defaults
within each pool. There has been no recorded impairment loss in the
six months ended June 30, 2012, compared to an impairment loss of
$732 thousand for the same time period in 2011.
Loans
Loans, net of allowance for loan losses, increased $36.6
million, or 1.7%, from $2.09 billion at June 30, 2011, to $2.13
billion at June 30, 2012. Non-farm, non-residential real estate
loans increased $52.1 million, or 4.7%, C&I loans were up $23.6
million, or 10.1%, ADC loans fell by $58.4 million, or 17.9%, and
multifamily real estate loans decreased $1.5 million, or 1.7%, from
June 30, 2011, to June 30, 2012. Sequentially, net loans were up
$32.1 million, or 1.5%. The sequential increase in loans was driven
primarily by $3.1 million and $18.2 million increases in
multi-family and one-to-four family residential loans,
respectively, commercial loans increasing $8.8 million and ADC
loans increasing $12.5 million. These increases offset the $2.4
million and $7.7 million sequential decreases in owner-occupied and
non-owner-occupied commercial mortgages, respectively. The
orientation and mix of loan growth is reflective of the continued
focus on building greater market share in commercial lending and
residential real estate lending, while limiting ADC lending and
non-farm, non-residential real estate lending to select
transactions in key markets with solid economic metrics.
Deposits
Total deposits at June 30, 2012, were $2.25 billion, a decrease
of $2.1 million, or 0.1%, compared to June 30, 2011, with demand
deposits increasing $90.6 million, or 30.9%, savings and
interest-bearing demand deposits increasing by $4.1 million, or
0.3%, and time deposits decreasing $96.8 million, or 12.4%. The
increase in demand deposits was primarily driven by the successful
efforts of the Company’s team of eight business development
officers, who are focused on acquisition and retention of
commercial operating funds, treasury management services, and other
related cross-sales. In regard to savings and interest-bearing
demand deposits, the Company was successful in its strategy to
further reduce the interest rate paid on these deposit products,
while also generating an increase in these deposit products, as
compared to the prior year. On a linked quarter basis, total
deposits increased $13.8 million, or 0.6%, with demand deposits
increasing by $48.1 million, or 14.3%, savings and interest-bearing
demand accounts increasing $12.9 million, or 1.1%, and time
deposits decreasing by $47.2 million, or 6.5%. The reduction in
time deposits was intentional and resulted from a series of
interest rate reductions that began in late 2011, and continued
through the second quarter of 2012. As a result, the cost of total
interest-bearing deposits declined from 1.36% for the quarter ended
June 30, 2011, and 1.03% for the quarter ended March 31, 2012, to
0.95% for the quarter ended June 30, 2012.
Capital Levels and Stockholders’ Equity
On March 31, 2011, the Company issued 426,000 shares of its
common stock at a price of $5.87 per share in a registered direct
placement with a Company director for total gross proceeds of
approximately $2.5 million. In addition, the Company issued to the
investor, warrants exercisable for shares of common stock, which,
if fully exercised, would provide an additional $4.8 million in
gross proceeds to the Company. The warrants each had an exercise
price of $5.62 per share. The Series A warrants, exercisable for a
total of 426,000 shares of common stock, were exercisable for a
period of seven months following the closing date. The Series B
warrants, also exercisable for a total of 426,000 shares of common
stock, were exercisable for a period of twelve months following the
closing date. The 426,000 Series A warrants were exercised in full
before they expired. In March 2012, the remaining 426,000 Series B
warrants were also exercised.
On September 29, 2010, the Company issued 1,904,766 shares of
its common stock at a price of $5.25 per share in a registered
direct placement with several institutional investors for total
gross proceeds of $10.0 million. In addition, the Company issued to
the investors warrants exercisable for shares of common stock. The
warrants each had an exercise price of $6.00 per share, which
represented a 14.3% premium to the offering price of the shares of
common stock sold in the registered direct placement. The Series A
warrants were exercisable through April 30, 2011, and 130,851 were
exercised as of that date. The 952,383 Series B warrants originally
were to expire on September 29, 2011, but on September 27,
2011, the expiration date of 904,764 of the Series B Warrants was
extended to January 27, 2012, with 47,619 warrants having been
exercised prior to the warrant extension. Following the extension,
during the fourth quarter of 2011, an additional 47,619 Series B
warrants were exercised. During January 2012, the remaining 857,155
Series B warrants were exercised.
Stockholders’ equity increased $36.2 million, or 13.5%, from
$267.1 million at June 30, 2011, to $303.3 million at June 30,
2012, with approximately $10.2 million in net proceeds from the
above referenced stock issuances, net income to common stockholders
of $21.8 million over the twelve-month period, a $939 thousand
increase in other comprehensive income related to the investment
securities portfolio, $1.8 million in the accretion of the discount
on preferred stock and $1.4 million in proceeds and tax benefits
related to the exercise of options by the Company’s directors and
officers, and stock option expense credits. As a result of these
changes, the Company’s Tier 1 capital ratio increased from 14.35%
at June 30, 2011, to 15.74% at June 30, 2012, its total qualifying
capital ratio increased from 15.60% to 17.00%, and its tangible
common equity ratio increased from 7.18% to 7.79%. Sequentially,
the Company’s Tier 1 and total qualifying capital ratios are each
up 19 basis points and its tangible common equity ratio is up 4
basis points.
CONFERENCE CALL
The Company will host a teleconference call for the financial
community on July 19, 2012, at 11:00 a.m. Eastern Daylight Time to
discuss the second quarter 2012 financial results. The public is
invited to listen to this conference call by dialing 866-261-3330
at least 10 minutes prior to the call.
A replay of the conference call will be available from 2:00 p.m.
Eastern Daylight Time on July 19, 2012, until 11:59 p.m. Eastern
Daylight Time on July 26, 2012. The public is invited to listen to
this conference call replay by dialing 888-266-2081 and entering
access code 1584707.
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.
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 losses on securities, realized gains and losses on sale
of securities, and death benefits received from bank-owned life
insurance. 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 June 30, 2012, June 30, 2011, and March 31, 2012, is
as follows:
Three Months
Ended
June 30,
Three Months
Ended
March 31,
(in thousands)
2012 2011
2012
Net Income Available to Common
Stockholders
$ 6,357 $ 7,488 $ 4,779 Adjustments to net income: Realized gain on
sale of securities (1,328 ) -- (2,592 ) Death benefits received
from bank-owned life insurance -- (361 ) -- Net tax effect
adjustment 465 126 907
Adjusted Operating Earnings $
5,494 $ 7,253 $ 3,094
The adjusted efficiency ratio is a non-GAAP financial measure
that is computed by dividing non-interest expense by the sum of net
interest income on a tax equivalent basis, and non-interest income
excluding impairment losses on securities, realized gains and
losses on sale of securities, and death benefits received from
bank-owned life insurance. 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 months and six months
ended June 30, 2012, and June 30, 2011, is as follows:
(in thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2012
2011 2012
2011 Summary Operating Results:
Non-interest expense $ 15,557 $ 14,520 $ 32,184 $ 28,970
Net interest income $ 26,917 $ 26,788 $ 53,696 $ 52,971
Non-interest income 3,421 2,256 8,370 3,732 Impairment loss
on securities -- -- -- 732 Gain on sale of securities (1,328 ) --
(3,920 ) (503 ) Death benefits received from bank owned life
insurance
-- (361
) --
(361 ) Adjusted non-interest income $
2,093 $ 1,895 $ 4,450 $ 3,600 Total net interest income and
non-interest income,
adjusted (1)
$ 29,010 $ 28,683 $ 58,146 $ 56,571
Efficiency Ratio,
adjusted 53.0 % 50.0 % 54.7 % 50.5 %
(1) Tax Equivalent Income of $29,376 for the
three months ended June 30, 2012, and $58,878 for the six months
ended June 30, 2012. Tax Equivalent Income of $29,071 for the three
months ended June 30, 2011, and $57,347 for the six months ended
June 30, 2011.
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. 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 June 30, 2012, June 30, 2011, March 31, 2012 and
December 31, 2011 is as follows:
(in
thousands)
As of June 30, March 31,
December 31, 2012
2011 2012 2011
Tangible common equity: Total stockholders’
equity $ 303,294 $ 267,124 $ 296,637 $ 283,771 Less:
Outstanding TARP senior preferred stock 68,146 66,334 67,670 67,195
Intangible assets
--
-- --
-- Tangible common equity $ 235,148 $ 200,790 $
228,967 $ 216,576 Total tangible assets $ 3,017,276 $
2,797,775 $ 2,954,226 $ 2,938,518
Tangible common equity
ratio 7.79 % 7.18 % 7.75 % 7.37 %
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 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 markets, 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, 2011, and other
reports filed with and furnished to the Securities and Exchange
Commission.
Virginia Commerce Bancorp, Inc. Financial Highlights
(Dollars in thousands, except per share data) (Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2012
2011 % Change 2012
2011 % Change Summary
Financial Results:
Interest and dividend income $ 33,643 $
35,638 -5.6 % $ 67,648 $ 71,155 -4.9 % Interest expense 6,726 8,850
-24.0 % 13,952 18,184 -23.3 % Net interest income 26,917 26,788 0.5
% 53,696 52,971 1.4 % Provision for loan losses 3,162 1,434 120.5 %
9,156 7,277 25.8 % Non-interest income 3,421 2,256 51.6 % 8,370
3,732 124.3 % Non-interest expense 15,557 14,520 7.1 % 32,184
28,970 11.1 % Income before income taxes 11,619 13,090 -11.2 %
20,726 20,456 1.3 % Net income $ 7,720 $ 8,836 -12.6 % $ 13,862 $
13,802 0.4 % Effective dividend on preferred stock 1,363 1,348 1.1
% 2,726 2,663 2.4 % Net income available to common stockholders $
6,357 $ 7,488 -15.1 % $ 11,136 $ 11,140 0.0 %
Performance
Ratios: Return on average assets 1.04 % 1.26 % 0.94 % 1.00 %
Return on average equity 10.28 % 13.68 % 9.41 % 10.94 % Net
interest margin 3.80 % 3.99 % 3.80 % 3.99 % Efficiency ratio,
adjusted 53.0 % 50.0 % 54.7 % 50.5 %
Per Share Data:
Earnings per common share-basic $ 0.20 $ 0.25 -20.0 % $ 0.35 $ 0.38
-7.9 % Earnings per common share-diluted $ 0.19 $ 0.24 -20.8 % $
0.33 $ 0.36 -8.3 % Average number of shares outstanding: Basic
31,811,390 29,643,226 31,657,370 29,453,918 Diluted 33,637,832
30,727,636 33,592,767 30,565,862 As of June
30, As of 2012 2011 % Change 03/31/12
% change
Selected Balance Sheet Data: Loans,
net of allowance for loan losses $ 2,131,572 $ 2,094,949 1.7 % $
2,099,484 1.5 % Investment securities 566,688 511,052 10.9 %
598,178 -5.3 % Assets 3,017,276 2,797,775 7.8 % 2,954,226 2.1 %
Deposits 2,251,692 2,253,742 -0.1 % 2,237,848 0.6 % Stockholders’
equity 303,294 267,124 13.5 % 296,637 2.2 % Book value per common
share $ 7.42 $ 6.77 9.6 % $ 7.23 2.6 %
Capital Ratios
(% of risk weighted assets): Tier 1 capital: Company 15.74 % 14.35
% 15.55 % Bank 15.20 % 13.99 % 14.93 % Total qualifying capital:
Company 17.00 % 15.60 % 16.81 % Bank 16.46 % 15.24 % 16.19 % Tier 1
leverage: Company 12.25 % 11.67 % 12.12 % Bank 11.91 % 11.41 %
11.70 % Tangible common equity: Company 7.79 % 7.18 % 7.75 %
(Dollars in thousands) As
of June 30, As of 2012 2011
03/31/12 12/31/11
Asset Quality: Non-performing assets: Non-accrual loans:
Commercial $ 2,540 $ 4,932 $ 9,968 $ 5,005 Real estate-one-to-four
family residential: Permanent first and second 5,500 1,982 3,060
3,912 Home equity loans and lines
3,480
2,990 3,580
3,142 Total real estate-one-to-four
family residential $ 8,980 $ 4,972 $ 6,640 $ 7,054 Real
estate-multi-family residential -- 495 476 476 Real
estate-non-farm, non-residential: Owner-occupied 3,504 6,516 2,997
1,999 Non-owner-occupied
2,079
7,831 88
-- Total real estate-non-farm, non-residential
$ 5,583 $ 14,347 $ 3,085 $ 1,999 Real estate-construction:
Residential 12,379 25,393 12,122 18,479 Commercial
16,859 8,586
14,232 5,505 Total
real estate-construction $ 29,238 $ 33,979 $ 26,354 $ 23,984
Consumer
18 18
19 18
Total non-accrual loans $ 46,359 $ 58,743 $ 46,542 $ 38,536 OREO
14,018 14,690
12,928 8,925
Total non-performing assets $ 60,377 $ 73,433 $ 59,470 $ 47,461
Loans 90+ days past due and still accruing: Commercial $ 45
$ -- $ -- $ -- Real estate-one-to-four family residential:
Permanent first and second -- -- 56 71 Home equity loans and lines
-- --
-- 250 Total real
estate-one-to-four family residential $ -- $ -- $ 56 $ 321 Real
estate-multi-family residential -- -- -- -- Real estate-non-farm,
non-residential: Owner-occupied -- -- -- -- Non-owner-occupied
-- 350
-- -- Total real
estate-non-farm, non-residential $ -- $ 350 $ -- $ -- Real
estate-construction: Residential -- 957 -- -- Commercial
-- --
-- -- Total Real
estate-construction: $ -- $ 957 $ -- $ -- Consumer
-- --
-- 11 Total loans
90+ days past due and still accruing $ 45 $ 1,307 $ 56 $ 332
Total non-performing assets and 90+ days past due loans $ 60,422 $
74,740 $ 59,526 $ 47,793 Troubled debt restructurings $
43,054 $ 81,070 $ 42,426 $ 52,264 Non-performing assets to
total loans: 2.77 % 3.41 % 2.77 % 2.18 % to total assets: 2.00 %
2.62 % 2.01 % 1.62 % Non-performing assets and past due loans to
total loans: 2.77 % 3.47 % 2.77 % 2.20 % to total assets: 2.00 %
2.67 % 2.01 % 1.63 % Allowance for loan losses to total loans 2.14
% 2.47 % 2.11 % 2.24 % Allowance for loan losses to non-performing
loans 100.49 % 88.62 % 97.37 % 125.37 % Total allowance for
loan losses $ 46,632 $ 53,217 $ 45,371 $ 48,729
(Dollars in
thousands) As of June 30, As of 2012 2011
03/31/12 12/31/11 Loans 30 to 89 days past due
and still accruing Commercial $ 2,099 $ 1,812 $ 1,916 $ 1,259 Real
estate-one-to-four family residential: Permanent first and second
4,149 2,815 4,652 3,548 Home equity loans and lines
249 339
640 390 Total real
estate-one-to-four family residential $ 4,398 $ 3,154 $ 5.292 $
3,938 Real estate-multi-family residential -- -- -- -- Real
estate-non-farm, non-residential: Owner-occupied 349 4,908 278
1,008 Non-owner-occupied
2,979
4,688 1,487
6,063 Total real estate-non-farm,
non-residential $ 3,328 $ 9,596 $ 1,765 $ 7,071 Real
estate-construction: Residential -- 574 -- 761 Commercial
-- --
-- -- Total real
estate-construction: $ -- $ 574 $ -- $ 761 Consumer 17 35 99 105
Farmland
-- --
-- --
Total loans 30 to 89 days past due $ 9,842 $ 15,171 $ 9.072 $
13,134 Three months ended
June 30,
Six months ended
June 30,
2012 2011 2012 2011 Net
charge-offs Commercial $ 207 $ 474 $ 4,874 $ 869 Real
estate-one-to-four family residential: Permanent first and second
842 180 715 1,777 Home equity loans and lines
449 37
787 766 Total real
estate-one-to-four family residential $ 1,291 $ 217 $ 1,502 $ 2,543
Real estate-multi-family residential (118 ) -- (118 ) -- Real
estate-non-farm, non-residential: Owner-occupied 174 (2 ) 221 52
Non-owner-occupied
3
3,047 635
4,577 Total real estate-non-farm,
non-residential $ 177 $ 3,045 $ 856 $ 4,629 Real
estate-construction: Residential (89 ) 920 3,397 1,830 Commercial
388 --
488 6,595 Total real
estate-construction: $ 299 $ 920 $ 3,885 $ 8,425 Consumer 45 26 $
254 $ 36 Farmland
--
-- --
-- Total net charge-offs $ 1,901 $ 4,682 $
11,253 $ 16,502 Net charge-offs to average loans outstanding 0.09 %
0.21 % 0.52 % 0.75 % Total provision for loan losses $ 3,162
$ 1,434 $ 9,156 $ 7,277
Classes of loans by risk rating as of June 30, 2012, excluding
loans held-for-sale, are summarized as follows (dollars in
thousands):
Internal Risk Rating Grades
Pass Watch
Special
Mention
Substandard Doubtful
Total
Loans
Commercial $ 188,952 $ 29,560 $
11,729 $ 24,563 $ 1,810 $ 256,614 Real estate-one-to-four family
residential: Permanent first and second 228,273 14,069 10,285
25,141 114 277,882 Home equity loans and lines
110,765 2,851
2,119 5,978
2,240 123,953 Total real
estate-one-to-four family residential $ 339,038 $ 16,920 $ 12,404 $
31,119 $ 2,354 $ 401,835 Real estate-multi-family residential
80,717 3,460 -- -- -- 84,177 Real estate-non-farm, non-residential:
Owner-occupied 367,535 62,369 25,067 16,490 -- 471,461
Non-owner-occupied
510,605
102,602 26,174
44,792 --
684,173 Total real estate-non-farm, non-residential $
878,140 $ 164,971 $ 51,241 $ 61,282 $ -- $ 1,155,634 Real
estate-construction: Residential 75,605 22,476 19,807 29,176 --
147,064 Commercial
40,181
18,090 26,702
38,903 --
123,876 Total real estate-construction $ 115,786 $
40,566 $ 46,509 $ 68,079 $ -- $ 270,940 Consumer 8,093 307 165 73
-- 8,638 Farmland 3,415
158 -- --
-- 3,573
Total
$ 1,614,141
$ 255,942 $ 122,048
$ 185,116 $
4,164 $ 2,181,411
Classes of loans by risk rating as of June 30, 2011, excluding
loans held-for-sale, are summarized as follows (dollars in
thousands):
Internal Risk Rating Grades
Pass Watch
Special
Mention
Substandard Doubtful
Total
Loans
Commercial $ 154,569 $ 43,933 $
3,438 $ 28,968 $ 2,144 $ 233,052 Real estate-one-to-four family
residential: Permanent first and second 208,915 19,211 10,508
22,702 -- 261,336 Home equity loans and lines
110,193 5,506
1,647 8,287
253 125,886 Total real
estate-one-to-four family residential $ 319,108 $ 24,717 $ 12,155 $
30,989 $ 253 $ 387,222 Real estate-multi-family residential 69,055
16,117 -- 495 -- 85,667 Real estate-non-farm, non-residential:
Owner-occupied 353,551 46,774 20,762 33,873 -- 454,960
Non-owner-occupied
448,743
129,748 10,351
59,777 --
648,619 Total real estate-non-farm, non-residential $
802,294 $ 176,522 $ 31,113 $ 93,650 $ -- $ 1,103,579 Real
estate-construction: Residential 61,617 34,239 6,927 48,431 --
151,214 Commercial
57,315
68,237 25,487
27,105 --
178,144 Total real estate-construction $ 118,932 $
102,476 $ 32,414 $ 75,536 $ -- $ 329,358 Consumer 9,993 243 94 108
-- 10,438 Farmland 2,498
-- -- --
-- 2,498
Total
$ 1,476,449
$ 364,008 $ 79,214
$ 229,746 $ 2,397
$ 2,151,814
Classes of loans by risk rating as of March 31, 2012, excluding
loans held-for-sale, are summarized as follows (dollars in
thousands):
Internal Risk Rating Grades
Pass Watch
Special
Mention
Substandard Doubtful
Total
Loans
Commercial $ 175,523 $ 34,782 $
4,997 $ 23,427 $ 9,108 $ 247,837 Real estate-one-to-four family
residential: Permanent first and second 205,804 15,342 10,163
25,154 115 256,578 Home equity loans and lines
111,181 3,288
1,902 8,420
2,243 127,034 Total real
estate-one-to-four family residential $ 316,985 $ 18,630 $ 12,065 $
33,574 $ 2,358 $ 383,612 Real estate-multi-family residential
76,304 4,253 -- 476 -- 81,033 Real estate-non-farm,
non-residential: Owner-occupied 369,014 63,240 25,360 16,267 --
473,881 Non-owner-occupied
505,373
119,446 37,154
29,872 --
691,845 Total real estate-non-farm, non-residential $
874,387 $ 182,686 $ 62,514 $ 46,139 $ -- $ 1,165,726 Real
estate-construction: Residential 65,280 22,329 20,100 29,048 --
136,757 Commercial
39,092
20,483 36,037
26,055 --
121,667 Total real estate-construction $ 104,372 $
42,812 $ 56,137 $ 55,103 $ -- $ 258,424 Consumer 8,259 291 167 67
-- 8,784 Farmland 2,574
-- -- --
-- 2,574
Total
$ 1,558,404
$ 283,454 $ 135,880
$ 158,786 $
11,466 $ 2,147,990
Classes of loans by risk rating as of December 31, 2011,
excluding loans held-for-sale, are summarized as follows (dollars
in thousands):
Internal Risk Rating Grades
Pass Watch
Special
Mention
Substandard Doubtful
Total
Loans
Commercial $ 172,457 $ 51,935 $
1,506 $ 22,178 $ 4,306 $ 252,382 Real estate-one-to-four family
residential: Permanent first and second 195,786 16,726 7,004 26,904
-- 246,420 Home equity loans and lines
111,800
4,937 1,441
6,105 2,247
126,530 Total real estate-one-to-four family
residential $ 307,586 $ 21,663 $ 8,445 $ 33,009 $ 2,247 $ 372,950
Real estate-multi-family residential 71,756 4,274 -- 476 -- 76,506
Real estate-non-farm, non-residential: Owner-occupied 357,480
62,766 21,777 18,750 -- 460,773 Non-owner-occupied
481,584 111,779
31,361 47,413
-- 672,137 Total real
estate-non-farm, non-residential $ 839,064 $ 174,545 $ 53,138 $
66,163 $ -- $ 1,132,910 Real estate-construction: Residential
70,323 30,546 12,984 37,264 -- 151,117 Commercial
63,520 59,217
27,395 25,168
-- 175,300 Total real
estate-construction $ 133,843 $ 89,763 $ 40,379 $ 62,432 $ -- $
326,417 Consumer 8,169 233 119 71 -- 8,592 Farmland
2,573 --
-- -- --
2,573
Total
$ 1,535,448 $ 342,413
$ 103,587 $
184,329 $ 6,553
$ 2,172,330
Troubled Debt Restructurings
(TDRs) By Loan Type As of June 30, 2012
Reviewable TDRs Permanent TDRs Total TDRs # of
Loans Balance As % of Balance # of
Loans
Balance As % of Balance # of
Loans
Balance As % of
Balance
Loan Type:
Commercial -- -- 0.0 % 7
$ 9,289 25.9 % 7 $ 9,289 21.6 %
Real estate-one to four family
residential: Permanent first and seconds 10 3,782 52.9 % -- --
0.0 % 10 3,782 8.8 % Home equity loans and lines
--
-- 0.0 %
-- -- 0.0
% -- --
0.0 % Total real estate-one to four
family residential: 10 $ 3,782 52.9 % -- -- 0.0 % 10 3,782 8.8 %
Real estate-multifamily residential -- -- 0.0 % -- -- 0.0 %
-- -- 0.0 %
Real estate-non-farm, non-residential
Owner-occupied 1 642 8.9 % 1 2,756 7.7 % 2 3,398 7.9 %
Non-owner-occupied
2 2,264
31.7 % 4
12,995 36.2 % 6
15,259 35.4 % Total
real estate-non-farm, non-residential: 3 $ 2,906 40.6 % 5 $ 15,751
43.9 % 8 $ 18,657 43.3 %
Real estate-construction:
Residential -- -- 0.0 % 3 4,106 11.4 % 3 4,106 9.5 % Commercial
1 465 6.5
% 2 6,755
18.8 % 3
7,220 16.8 % Total real
estate-construction: 1 $ 465 6.5 % 7 $ 10,861 30.2 % 6 $ 11,326
26.3 %
Farmland -- -- 0.0 % -- -- 0.0 % -- -- 0.0 %
Consumer -- --
0.0 % --
-- 0.0 % --
-- 0.0 % Total
Loans 14 $ 7,153 100.0 % 17 $ 35,901 100.0 % 31 $ 43,054 100.0
%
Troubled Debt Restructurings (TDRs)
By Quarterly Review / Maturity Date As of June 30,
2012 Reviewable TDRs Permanent TDRs Total
TDRs (Dollars in thousands) # of Loans
Balance As % of Balance # of
Loans
Balance As % of Balance # of
Loans
Balance As % of
Balance
Review / Maturity by Quarter:
2012 3rd Quarter 2 $ 2,112 29.5 % -- $ -- 0.0 % 2 $ 2,112
4.9 % 4th Quarter
3 1,353
18.9 % 8
12,982 36.2 %
11 14,335 33.3
% Total 2012: 5 $ 3,465 48.4 % 8 $ 12,982 36.2 % 13 $
16,447 38.2 %
2013 1st Quarter 5 $ 2,803 39.2 % -- $ -- 0.0
% 5 $ 2,803 6.5 % 2nd Quarter -- -- 0.0 % -- -- 0.0 % -- -- 0.0 %
3rd Quarter 4 885 12.4 % -- -- 0.0 % 4 885 2.1 % 4th Quarter
-- -- 0.0
% 3 3,859
10.7 % 3
3,859 8.9 % Total 2013: 9 $
3,688 51.6 % 3 $ 3,859 10.7 % 9 $ 7,547 17.5 %
2014 &
beyond -- $ --
0.0 % 6 $
19,060 53.1 % 6
$ 19,060 44.3 %
Total Loans 14 $ 7,153 100.0 % 17 $ 35,901 100.0 % 31 $
43,054 100.0 %
Troubled Debt Restructurings
(TDRs)
Migration by Quarter
As of June 30, 2012
(Dollars in thousands)
4/1/09 to
6/30/09
7/1/09 to
9/30/09
10/1/09
to
12/31/09
1/1/10 to
3/31/10
4/1/10 to
6/30/10
7/1/10 to
9/30/10
10/1/10
to
12/31/10
Period Beginning Balance $ -- $ 33,309 $ 37,425 $ 71,885 $
80,993 $ 96,976 $ 105,617
Additions: New Loans Added
$ 33,309 $ 5,226 $ 37,663 $ 23,477 $ 21,720 $ 12,698 $ 12,377 Loan
Advances
-- 974
348 219
472 220
531 Subtotal Additions: $ 33,309
$ 6,200 $ 38,011 $ 23,696 $ 22,192 $ 12,918 $ 12,908
Deductions: Sales Proceeds -- $ 944 $ 1,783 $ 1,218 $ 761 --
$ 125 Payments -- 317 174 50 1,202 1,138 433 Reviews -- -- 229 75
3,714 2,468 -- Upgrades -- -- -- -- -- -- 11,000 Partial C/Os
w/Continuing TDRs -- -- -- -- -- -- -- Charge-offs w/Loans Sold or
Settled -- -- 56 -- -- -- -- Transfer to NPA
--
823 1,309
13,245 532
671 3,971
Subtotal Deductions: -- $ 2,084 $ 3,551 $ 14,588 $ 6,209 $
4,277 $ 15,529
Net Increase / (Decrease) $ 33,309 $
4,116 $ 34,460 $ 9,108 $ 15,983 $ 8,641 $ ( 2,621 )
%
Increase / (Decrease) from Preceding Period 12.4 % 92.1 % 12.7
% 19.7 % 8.9 % (2.5 %)
Period Ended Balance $ 33,309
$ 37,425 $ 71,885 $ 80,993 $ 96,976 $ 105,617 $ 102,996
1/1/11 to
3/31/11
4/1/11 to
6/30/11
7/1/11 to
9/30/11
10/1/11 to
12/31/11
1/1/12 to 3/31/12 4/1/12 to
6/30/12 TOTAL Period Beginning
Balance $ 102,996 $ 91,876 $ 81,070 $ 71,686 $ 52,264 $ 42,426
Additions: New Loans Added $ 3,188 $ 116 $ 984 $ 753
$ 541 $ 1,345 $ 153,397 Loan Advances
486
197 53
40 236
186 3,962 Subtotal
Additions: $ 3,674 $ 313 $ 1,037 $ 793 $ 777 $ 1,531
$
157,359 Deductions: Sales Proceeds $ 367 $ 126
$ 4,597 $ 6,168 $ 5,098 $ 247 $ 21,434 Payments 1,989 1,715 532 990
226 158 8,924 Reviews 5,731 640 4,292 10,111 3,888 498 31,646
Upgrades -- -- -- -- -- -- 11,000 Partial C/Os w/Continuing TDRs
5,656 3,000 -- -- -- -- 8,656 Charge-offs w/Loans Sold or Settled
251 -- -- 2,946 604 -- 3,857 Transfer to NPA
800 5,638
1,000 --
799 --
28,788 Subtotal Deductions: $ 14,794 $
11,119 $ 10,421 $ 20,215 $ 10,615 $ 903 $ 114,305
Net
Increase / (Decrease) $ (11,120 ) $ (10,806 ) $ (9,384 ) $
(19,422 ) $ (9,838 ) $ 628
% Increase / (Decrease) from
Preceding Period (10.8 %) (11.8 %) (11.6 %) (27.1 %) (18.8 %)
1.5 %
Period Ended Balance $ 91,876 $ 81,070 $ 71,686
$ 52,264 $ 42,426 $ 43,054 $ 43,054
(Dollars in
thousands) As of June 30,
As of 2012 2011 % Change
03/31/12 % Change
Loan Portfolio: Commercial $ 256,614 $ 233,052 10.1 %
$ 247,837 3.5 % Real estate-one to four family residential:
Permanent first and second 277,882 261,336 6.3 % 256,578 8.3 % Home
equity loans and lines
123,953
125,886 -1.5 %
127,034 -2.4 % Total real
estate-one-to-four family residential $ 401,835 $ 387,222 3.8 % $
383,612 4.8 % Real estate-multifamily residential 84,177 85,667
-1.7 % 81,033 3.9 % Real estate-non-farm, non-residential:
Owner-occupied 471,461 454,960 3.6 % 473,881 -0.5 %
Non-owner-occupied
684,173
648,619 5.5 %
691,845 -1.1 % Total real
estate-non-farm, non-residential $ 1,155,634 $ 1,103,579 4.7 % $
1,165,726 -0.9 % Real estate-construction: Residential 147,064
151,214 -2.7 % 136,757 7.5 % Commercial
123,876
178,144 -30.5 %
121,667 1.8 % Total
real estate-construction: $ 270,940 $ 329,358 -17.7 % $ 258,424 4.8
% Consumer 8,638 10,438 -17.2 % 8,784 -1.7 % Farmland
3,573 2,498 43.0
% 2,574 38.8
% Total loans $ 2,181,411 $ 2,151,814 1.4 % $
2,147,990 1.6 % Less unearned income 3,207 3,648 -12.1 % 3,135 2.3
% Less allowance for loan losses
46,632
53,217 -12.4 %
45,371 2.8 % Loans, net of
allowance for loan losses $ 2,131,572 $ 2,094,949 1.7 % $ 2,099,484
1.5 % As of June 30, 2012
Residential, Acquisition, Development
and Construction
Non-accruals
Net charge-
By County/Jurisdiction of
Origination:
Total
Percentage
Non-accrual
as a % of
offs as a % of
(Dollars in thousands) Outstandings of Total
Loans Outstandings Outstandings
District of Columbia $ 7,820 5.3 % $ 495 0.3 % -- Montgomery, MD $
0 0.0 % -- -- -- Prince Georges, MD 11,754 8.0 % 5,969 4.1 % 1.0 %
Other Counties in MD 3,492 2.4 % 199 0.1 % 0.1 %
Arlington/Alexandria, VA 29,964 20.4 % -- -- -0.1 % Fairfax, VA
32,946 22.4 % -- -- 0.2 % Culpeper/Fauquier, VA 2,100 1.4 % 200 0.1
% -- Frederick, VA 2,288 1.6 % 2,288 1.6 % 1.0 % Loudoun, VA 15,747
10.7 % -- -- -- Prince William, VA 9,254 6.3 % 564 0.4 % --
Spotsylvania, VA 350 0.2 % -- -- -- Stafford, VA 27,109 18.4 %
2,664 1.8 % -- Other Counties in VA 1,399 1.0 % -- -- -- Outside
VA, D.C. & MD
2,841 1.9
% -- --
-- $ 147,063 100.0 % $ 12,379 8.4 % 2.2 %
As of June 30,
2012
Commercial, Acquisition, Development
and Construction
Non-accruals
Net charge-
By County/Jurisdiction of Origination: Total Percentage
Non-accrual as a % of
offs as a % of
(Dollars in thousands) Outstandings of Total
Loans Outstandings Outstandings
District of Columbia $ 785 0.6 % $ -- -- -- Montgomery, MD 1,890
1.5 % -- -- -- Prince Georges, MD 12,489 10.1 % -- -- -- Other
Counties in MD 2,148 1.7 % -- -- -- Arlington/Alexandria, VA 7,984
6.4 % 585 0.5 % -- Fairfax, VA 5,943 4.8 % 2,427 2.0 % 0.3 %
Culpeper/Fauquier, VA 3,049 2.5 % 3,049 2.4 % -- Frederick, VA
2,000 1.6 % -- -- -- Henrico, VA 933 0.8 % -- -- -- Loudoun, VA
12,019 9.7 % -- -- -- Prince William, VA 39,601 32.0 % -- -- 0.1 %
Spotsylvania, VA 1,730 1.4 % -- -- -- Stafford, VA 27,630 22.3 %
9,963 8.0 % -- Other Counties in VA 5,675 4.6 % 835 0.7 % --
Outside VA, D.C. & MD
- 0.0
% -- --
-- $ 123,876 100.0 % $ 16,859 13.6 % 0.4 %
As of June 30, 2012
Non-Farm/Non-Residential
Non-accruals
Net charge-
By County/Jurisdiction of Origination: Total Percentage
Non-accrual as a % of
offs as a % of
(Dollars in thousands) Outstandings of Total
Loans Outstandings Outstandings
District of Columbia $ 84,996 7.4 % $ -- -- -- Montgomery, MD
20,786 1.8 % -- -- -- Prince Georges, MD 64,935 5.6 % -- -- --
Other Counties in MD 53,387 4.6 % -- -- -- Arlington/Alexandria, VA
182,648 15.8 % -- -- -- Fairfax, VA 279,916 24.2 % 829 0.1 % --
Culpeper/Fauquier, VA 3,339 0.3 % 2,078 0.2 % -- Frederick, VA
6,328 0.5 % -- -- -- Henrico, VA 21,951 1.9 % -- -- -- Loudoun, VA
150,715 13.0 % 1,767 0.2 % -- Prince William, VA 199,862 17.3 % 909
0.1 % -- Spotsylvania, VA 11,290 1.0 % -- -- -- Stafford, VA 21,488
1.9 % -- -- -- Other Counties in VA 44,576 3.9 % -- -- 0.1 %
Outside VA, D.C. & MD
9,417
0.8 % --
-- -- $ 1,155,634 100.0 % $
5,583 0.6 % 0.1 %
Of this total of $1.2 billion in non-farm/non-residential real
estate loans, approximately $66.0 million will mature in 2012,
$100.7 million in 2013 and $183.1 million in 2014.
(Dollars in thousands) As
of June 30, As of
2012 2011 % Change
3/31/12 % Change
Investment Securities:
Available-for-sale (AFS) (at fair value): U.S. government treasury
obligations $ 19,999 $ -- 100.0 % $ -- 100.0 % U.S. government
agency obligations 448,297 410,431 9.2 % 494,041 -9.3 % Pooled
trust preferred securities 556 450 23.6 % 486 14.4 % Obligations of
states and political subdivisions
97,836
66,080 48.1 %
103,651 -5.6 % $ 566,688 $
476,961 18.8 % $ 598,178 -5.3 % Held-to-maturity (HTM) (at
amortized cost): U.S. government agency obligations $ -- $ 4,864
-100.0 % $ -- -- Obligations of states and political subdivisions
-- 29,227
-100.0 % --
-- $ -- $ 34,091 -100.0 % $ -- -- Total
Investment Securities $ 566,688 $ 511,052 1.7 % $ 598,178 -5.3
Virginia Commerce Bancorp, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share
data)
As of June 30,
(Unaudited)
2012 2011
Assets Cash and due from banks $ 57,653 $ 40,170 Investment
securities, AFS 566,688 476,961 Investment securities, HTM (fair
value: $36,053 at June 30, 2011) -- 34,091 Restricted stocks, at
cost 11,272 11,486 Federal funds sold -- 39,973 Interest bearing
deposits in other banks 152,129 -- Loans held-for-sale 12,851 7,667
Loans, net of allowance for loan losses of $46,632 and $53,217
2,131,572 2,094,949 Bank premises and equipment, net 10,646 11,326
Accrued interest receivable 9,334 10,023 Other real estate owned,
net of valuation allowance of $6,571 and $6,808 14,018 14,690
Bank-owned life insurance 14,126 13,904 Other assets 36,987
42,535 Total assets $ 3,017,276 $ 2,797,775
Liabilities and Stockholders’ Equity Deposits
Demand deposits $ 383,714 $ 293,093 Savings and interest-bearing
demand deposits 1,186,107 1,182,006 Time deposits 681,871
778,643 Total deposits $ 2,251,692 $ 2,253,742 Securities
sold under agreement to repurchase 364,568 179,105 Other borrowed
funds 25,000 25,000 Trust preferred capital notes 66,698 66,442
Accrued interest payable 2,079 2,600 Other liabilities 3,945
3,762 Total liabilities $ 2,713,982 $ 2,530,651
Stockholders’ Equity
Preferred stock, net of discount, $1.00
par value per share,
1,000,000 shares authorized, Series A;
$1,000 stated value;
71,000 issued and outstanding
$ 68,146 $ 66,334
Common stock, $1.00 par value per share,
50,000,000 shares
authorized, issued and outstanding 2012,
31,812,914 including
113,717 in unvested restricted stock
issued; 2011, 29,687,183
including 41,248 in unvested restricted
stock issued
31,699 29,646 Surplus 117,721 108,142 Warrants 8,520 8,520 Retained
earnings 72,135 50,348 Accumulated other comprehensive income, net
5,073 4,134 Total stockholders’ equity $ 303,294 $
267,124 Total liabilities and stockholders’ equity $ 3,017,276 $
2,797,775
Virginia Commerce Bancorp, Inc.
Consolidated Statements of Operations
(Dollars in thousands except per share
data)
(Unaudited)
Three Months Ended Six
Months Ended June 30, June 30, 2012
2011 2012 2011
Interest and dividend
income: Interest and fees on loans
$ 30,427 $ 31,765 $ 61,048 $ 63,688 Interest and dividends on
investment securities: Taxable 2,452 3,131 5,096 5,992 Tax-exempt
586 592 1,174 1,184 Dividends on restricted stocks 104 96 205 192
Interest on federal funds sold -- 54 -- 99 Interest on deposits in
other banks 74 -- 125 -- Total
interest and dividend income $ 33,643 $ 35,638 $ 67,648 $ 71,155
Interest expense: Deposits $ 4,465 $ 6,670 $ 9,407 $
13,693 Securities sold under agreement to repurchase 1,014
960 2,051 1,894 Other borrowed funds 268 268 537 534 Trust
preferred capital notes 979 952 1,957
2,063 Total interest expense $ 6,726 $ 8,850 $ 13,952 $
18,184
Net interest income $ 26,917 $ 26,788 $ 53,696
$ 52,971 Provision for loan losses 3,162 1,434
9,156 7,277 Net interest income after provision for
loan losses $ 23,755 $ 25,354 $ 44,540 $ 45,694
Non-interest income: Service charges and other fees $ 875 $
799 $ 1,756 $ 1,591 Non-deposit investment services commissions 242
460 494 713 Fees and net gains on loans held-for-sale 830 534 1,831
1,055 Gain on sale of securities 1,328 -- 3,920 503 Impairment loss
on securities -- -- -- (732 ) Bank-owned life insurance 54 424 109
486 Other 92 39 260 116 Total
non-interest income $ 3,421 $ 2,256 $ 8,370 $ 3,732
Non-interest expense: Salaries and employee benefits $ 7,239
$ 6,426 $ 15,024 $ 13,085 Occupancy expense 2,341 2,243 4,762 4,713
FDIC insurance 833 1,241 1,828 2,530 Loss on other real estate
owned 881 320 1,707 476 Other real estate owned expenses 262 207
580 339 Franchise tax expense 750 774 1,500 1,546 Data processing
expense 675 635 1,328 1,290 Other operating expense 2,576
2,674 5,455 4,991 Total non-interest
expense $ 15,557 $ 14,520 $ 32,184 $ 28,970 Income before
taxes $ 11,619 $ 13,090 $ 20,726 $ 20,456 Provision for income
taxes 3,899 4,254 6,864 6,653
Net income $ 7,720 $ 8,836 $ 13,862 $ 13,803
Effective dividend on preferred stock 1,363 1,348
2,726 2,663
Net income available to common
stockholders $ 6,357 $ 7,488 $ 11,136 $ 11,140 Earnings per
common share, basic $ 0.20 $ 0.25 $ 0.35 $ 0.38 Earnings per common
share, diluted $ 0.19 $ 0.24 $ 0.33 $ 0.36
Virginia Commerce Bancorp, Inc.
Consolidated Average Balances, Yields, and
Rates
Three Months Ended June 30,
(Unaudited)
2012
2011 (Dollars in thousands)
Average
Balance
Interest
Income-
Expense
Average
Yields
/Rates
Average
Balance
Interest
Income-
Expense
Average
Yields
/Rates
Assets
Securities (1) $ 589,230 $ 3,038 2.24 % $ 443,906 $ 3,723
3.49 % Restricted stock 11,272 104 3.73 % 11,658 96 3.31 % Loans,
net of unearned income (2) 2,165,893 30,427 5.66 % 2,180,131 31,765
5.85 % Interest-bearing deposits in other banks 120,593 74 0.25 %
498 -- 0.05 % Federal funds sold -- -- --
81,105 54 0.27 %
Total interest-earning assets
$ 2,886,988 $ 33,643 4.74 % $ 2,717,298 $ 35,638 5.30 % Other
assets 76,126 89,123
Total Assets $ 2,963,114
$ 2,806,421
Liabilities and Stockholders’ Equity
Interest-bearing deposits: NOW accounts $ 354,559 $ 318 0.36 % $
322,378 $ 595 0.74 % Money market accounts 222,898 221 0.40 %
196,946 515 1.05 % Savings accounts 602,095 644 0.43 % 669,476
1,597 0.96 % Time deposits 706,106 3,282 1.87 %
777,509 3,963 2.04 % Total interest-bearing deposits
$ 1,885,658 $ 4,465 0.95 % $ 1,966,309 $ 6,670 1.36 % Securities
sold under agreement to repurchase 320,100 1,014 1.27 % 184,290 960
2.09 % Other borrowed funds 25,000 268 4.25 % 25,000 268 4.25 %
Trust preferred capital notes 66,660 979 5.80 %
66,406 952 5.67 %
Total interest-bearing
liabilities $ 2,297,418 $ 6,726 1.18 % $ 2,242,005 $ 8,850 1.58
% Demand deposits and other liabilities 364,622
305,258
Total liabilities $ 2,662,040 $ 2,547,263
Stockholders’ equity 301,074 259,158
Total
liabilities and stockholders’ equity $ 2,963,114 $ 2,806,421
Interest rate spread 3.56 % 3.72 % Net interest income and margin $
26,917 3.80 % $ 26,788 3.99 %
(1) Yields on 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 securities, which are reflected as a
component of stockholders’ equity. Average yields on 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 $1.5 million and $1.3 million for
the three months ended June 30, 2012, and 2011, respectively.
Virginia Commerce Bancorp, Inc.
Consolidated Average Balances, Yields, and
Rates
Six Months Ended June 30,
(Unaudited)
2012
2011 (Dollars in thousands)
Average
Balance
Interest
Income-
Expense
Average
Yields
/Rates
Average
Balance
Interest
Income-
Expense
Average
Yields
/Rates
Assets Securities (1) $ 597,137 $ 6,270 2.28 % $ 425,301 $
7,176 3.54 % Restricted stock 11,246 205 3.68 % 11,705 192 3.31 %
Loans, net of unearned income (2) 2,170,454 61,048 5.67 % 2,191,560
63,688 5.87 % Interest-bearing deposits in other banks 98,489 125
0.26 % 443 -- 0.08 % Federal funds sold -- -- 0.00 %
74,401 99 0.27 %
Total interest-earning assets
$ 2,877,326 $ 67,648 4.78 % $ 2,703,410 $ 71,155 5.35 % Other
assets 76,593 83,770
Total Assets $ 2,953,919
$ 2,787,180
Liabilities and Stockholders’ Equity
Interest-bearing deposits: NOW accounts $ 340,775 $ 615 0.36 % $
321,973 $ 1,248 0.78 % Money market accounts 219,417 456 0.42 %
187,119 984 1.06 % Savings accounts 615,197 1,416 0.46 % 680,998
3,513 1.04 % Time deposits 733,425 6,920 1.90 %
780,469 7,948 2.05 % Total interest-bearing deposits
$ 1,908,814 $ 9,407 0.99 % $ 1,970,559 $ 13,693 1.40 % Securities
sold under agreement to repurchase 299,951 2,051 1.38 % 175,331
1,894 2.18 % Other borrowed funds 25,000 537 4.25 % 25,000 534 4.25
% Trust preferred capital notes 66,631 1,957 5.81 %
66,378 2,063 6.18 %
Total interest-bearing
liabilities $ 2,300,396 $ 13,952 1.22 % $ 2,237,268 $ 18,184
1.64 % Demand deposits and other liabilities 357,426
295,467
Total liabilities $ 2,657,822 $ 2,532,735
Stockholders’ equity 296,097 254,445
Total
liabilities and stockholders’ equity $ 2,953,919 $ 2,787,180
Interest rate spread 3.56 % 3.71 % Net interest income and margin $
53,696 3.80 % $ 52,971 3.99 %
(1) Yields on 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 securities, which are reflected as a
component of stockholders’ equity. Average yields on 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 $2months ended June 30, 2012, and
2011, respectively.
Virginia Commerce Bancorp (MM) (NASDAQ:VCBI)
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