VCBI Virginia Commerce Bancorp (MM)

Virginia Commerce Bancorp, Inc. (Nasdaq: VCBI), parent company of Virginia Commerce Bank (the �Bank�), today reported its financial results for the second quarter and six months ended June 30, 2007. Second Quarter 2007 Highlights: Net income of $6.9 million representing a 9.6% increase over second quarter 2006 Diluted earnings per share up 12.0% to $0.28 Loans and deposits up 19.7% and 22.2%, respectively, since June 30, 2006, Twenty-first branch opened in Ashburn, Virginia (first in Loudoun County) Peter A. Converse, Chief Executive Officer, commented, �Despite the ongoing challenging banking environment, Virginia Commerce again posted strong performance metrics. We�re especially proud of our record earnings resulting in diluted earnings per share of $0.28 for the quarter, a 12.0% increase over the same period last year. Earnings benefited from year-over-year increases of almost 20% and 14% in loans and non-interest income, respectively, as well as a 66% decrease in loan loss provisions. The provision expense declined due to sequential reductions in non-performing and other identified problem loans as well as residential construction loans which require higher reserves. While overall loan growth was robust over the last twelve months, it has slowed sequentially over the last two quarters due to unusually high pay-off levels and the effect of heightened competition on the rate of approved loan closings. Nonetheless, our loan backlog is strong and 20% loan growth for 2007 is attainable depending on the continued constraint of pay-offs and competition.� Converse continued, �Deposit growth continues to benefit from promotions of at least five product lines as well as new branch openings. Our first branch in high income, high growth Loudoun County opened in May and will be followed by three more new branches over the next few months in Fredericksburg, Centreville, and Leesburg (also Loudoun County). We decided to limit our branching for 2007 to four new locations to more readily maintain quality growth in a very competitive market.� SUMMARY REVIEW OF FINANCIAL PERFORMANCE Net Income Second quarter earnings of $6.9 million increased $601 thousand, or 9.6%, over 2006 second quarter earnings of $6.3 million. On a diluted per share basis, second quarter 2007 earnings were $0.28 compared to $0.25 for the second quarter of 2006, an increase of 12.0%. For the six months ended June 30, 2007, earnings of $13.4 million represents an 11.3% increase over the $12.0 million earned for the same period in 2006, with diluted earnings per share of $0.54 increasing 12.5%. The increases in net income for both the quarter and year-to-date were due to a 7.5% and 9.1% increase in net interest income, a 13.8% and 11.3% increase in non-interest income, and a 68.6% and 66.3% decline in loan loss provisions. Net Interest Income Net interest income for the second quarter of $18.7 million was up 7.5% compared with $17.3 million for the same quarter last year due to strong loan growth, as the net interest margin declined from 4.19% in the second quarter of 2006 to 3.75% for the current three-month period. Year-to-date net interest income of $36.5 million was up 9.1%, compared to $33.5 million in 2006, again due to strong loan growth as the net interest margin for the six-month period declined from 4.23% in 2006, to 3.75%. On a sequential basis, the margin was up one basis point from 3.74% in the first quarter of 2007. The year-over-year declines in the net interest margin continue to be the result of significantly higher short-term rates on savings, money market and time deposit accounts, a shift of funds in 2006 from lower rate interest-bearing checking accounts to the higher rate accounts, and ongoing strong competition for deposits in the local market. These factors resulted in a 76 basis point increase in the cost of funds year-over-year, compared to a 26 basis point increase in the yield on interest-earning assets. Despite the one basis point increase in the margin quarter-over-quarter, which was due to an eighteen basis point improvement in the yield on investment securities and only a four basis point increase in the cost of funds, management expects net interest margin pressure to continue in the second half of 2007. This is due to continued high short-term interest rates and competitive pressures on deposit and loan rates in the Company�s market area. However, the rate of compression continues to decelerate and is expected to bottom out in the second half of the year. As a result, we expect the margin for the remainder of 2007 to remain in the 3.60% to 3.75% range. Non-Interest Income Non-interest income of $2.0 million in the second quarter was up 13.8% from the $1.7 million for the same period in 2006 and was up $391 thousand, or 11.3%, on a year-to-date basis with increases in all categories. Compared to the first quarter of 2007, non-interest income is up $113 thousand, due mostly to higher fees and net gains on mortgage loans held-for-sale. Management expects only slight improvement in the non-interest income categories, including fees and net gains from mortgage lending activities, over the rest of 2007. Non-Interest Expense Non-interest expense increased $1.5 million, or 16.7%, from $8.5 million in the second quarter of 2006, to $9.9 million, and was up $2.7 million, or 16.2%, from $16.7 million for the six months ended June 30, 2006, to $19.4 million year-to-date. Compared to the first quarter of 2007, non-interest expense is up $408 thousand, or 4.3%. The year-over-year increases were due to the opening of the Bank�s twentieth and twenty-first branch locations in August 2006 and May 2007, the hiring of additional loan and business development officers, other staffing and facilities expansion to support loan and deposit growth, and the resumption of FDIC insurance premiums in the second quarter of 2007. As a result of these increases in expenses, the efficiency ratio rose from 44.5% in the second quarter of 2006 to 48.0% in the current period and to 47.9% on a year-to-date basis. Management expects higher levels in all non-interest expense categories for the remainder of 2007 with the opening of three additional branch locations. However, it is expected that the efficiency ratio will continue to remain in the high forties. Loans Over the past year, loans, net of allowance for loan losses, increased $286.0 million, or 19.7%, from $1.45 billion at June 30, 2006, to $1.74 billion at June 30, 2007. The majority of loan growth occurred in non-farm, non-residential real estate loans and real estate construction loans, rising 18.9% and 16.8%, respectively, while commercial loans also increased 30.6%. Since December 31, 2006, loans are up $108.0 million, or 6.6%, and are up $48.2 million, or 2.9%, since March 31, 2007. Loan growth in 2007 has been impacted by an unusually higher level of run-off with total run-off of $188.3 million compared to $117.4 million in 2006. Management expects slightly higher levels of loan growth for the remainder of 2007 based on a strong current pipeline. Deposits Since June 30, 2006, deposits have increased $317.1 million, or 22.2%, from $1.43 billion to $1.74 billion with savings and interest-bearing demand deposits increasing by $106.4 million, and time deposits growing by $210.6 million. Year-to-date deposits are up $139.5 million, or 8.7%, with demand deposits having increased $18.9 million, savings and interest-bearing demand deposits increasing $44.9 million, and time deposits growing by $75.7 million. Sequentially, deposits rose $34.7 million, with demand deposits increasing $13.7 million, savings and interest-bearing demand deposits increasing $18.3 million and time deposits rising only $2.7 million during the period. Repurchase Agreements Repurchase agreements, the majority of which represent funds of significant demand deposit customers, increased $38.8 million, or 31.2% from $124.4 million at June 30, 2006, to $163.0 million at June 30, 2007, and increased $14.2 million, or 9.5%, year-to-date. Asset Quality and Provisions For Loan Losses Provisions for loan losses were $300 thousand for the three months ended June 30, 2007, compared to $955 thousand in the same period in 2006. This was due to a sequential decrease in non-performing loans from $3.9 million to $3.2 million, lower net loan growth of $48.2 million for the second quarter of 2007 as compared to growth of $83.2 million for the prior year quarter, and a sequential decrease in other identified potential problem loans, which, although well-secured and currently performing, but requiring higher reserve levels, fell from $4.3 million at March 31, 2007, to $3.6 million at June 30, 2007. In addition, residential construction loans, which require high levels of reserves, fell $26.6 million during the quarter, while residential mortgages, which require lower reserve levels, rose $19.8 million. As a result, the allowance for loan losses to total loans declined from 1.08% at March 31, 2007, to 1.06%. Stockholders� Equity Stockholders� equity is up $27.5 million, or 22.0%, from $125.1 million at June 30, 2006, to $152.6 million at June 30, 2007, on earnings of $25.9 million over the twelve month period, a $438 thousand increase in other comprehensive income and $1.2 million from proceeds and tax benefits related to the exercise of stock options by company directors, officers and employees and stock option expense credits. On May 1, 2007, a ten percent stock dividend was paid, increasing the number of shares outstanding by 2.2 million to 23.9 million as of quarter-end. This is the twelfth consecutive year that a stock dividend or split has been paid. CONFERENCE CALL Virginia Commerce Bancorp will host a teleconference call for the financial community on July 17, 2007, at 11:00 a.m. Eastern Daylight Time to discuss the second quarter 2007 financial results. The public is invited to listen to this conference call by dialing 866-814-1919 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 17, 2007, until 11:59 p.m. Eastern Daylight Time on July 24, 2007. The public is invited to listen to this conference call replay by dialing 888-266-2081 and entering passcode 1112755. ABOUT VIRGINIA COMMERCE BANCORP Virginia Commerce Bancorp, Inc. is the parent bank holding company for Virginia Commerce Bank (the �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-one branch offices, two residential mortgage offices and two investment services offices, principally to individuals and small to medium-size businesses in Northern Virginia and the Metropolitan Washington, D.C. area. NON-GAAP PRESENTATIONS This press release refers to the efficiency ratio, which is computed by dividing non-interest expense by the sum of net interest income on a tax equivalent basis and non-interest income. This is a non-GAAP financial measure that we believe provides investors with important information regarding our operational efficiency. Comparison of our efficiency ratio with those of other companies may not be possible because other companies may calculate the efficiency ratio differently. The Company, in referring to its net income, is referring to income under accounting principals generally accepted in the United States, or �GAAP�. FORWARD LOOKING STATEMENTS This press release may contain 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 and regarding general economic conditions. In some cases, forward-looking statements can be identified by use of words such as �may,� �will,� �anticipates,� �believes,� �expects,� �plans,� �estimates,� �potential,� �continue,� �should,� and similar words or phrases. 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 discussion 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. Virginia Commerce Bancorp, Inc. Financial Highlights (Dollars in thousands, except per share data) (Unaudited) � Three Months Ended June 30, Six Months Ended June 30, 2007 � � 2006 � % Change � 2007 � 2006 � % Change Summary Operating Results: Interest and dividend income $ 37,779 $ 30,594 23.5 % $ 73,886 $ 57,835 27.8 % Interest expense 19,123 13,246 44.4 % 37,341 24,335 53.4 % Net interest and dividend income 18,656 17,348 7.5 % 36,545 33,500 9.1 % Provision for loan losses 300 955 -68.6 % 660 1,960 -66.3 % Non-interest income 1,975 1,735 13.8 % 3,837 3,446 11.3 % Non-interest expense 9,897 8,484 16.7 % 19,386 16,678 16.2 % Income before income taxes 10,434 9,644 8.2 % 20,336 18,308 11.1 % Net income $ 6,879 $ 6,278 9.6 % $ 13,353 $ 11,992 11.3 % � Performance Ratios: Return on average assets 1.34 % 1.47 % 1.32 % 1.47 % Return on average equity 18.41 % 20.64 % 18.40 % 20.40 % Net interest margin 3.75 % 4.19 % 3.75 % 4.23 % Efficiency ratio (1) 48.00 % 44.46 % 47.90 % 45.14 % � Per Share Data: (2) Net income-basic $ 0.29 $ 0.26 11.5 % $ 0.56 $ 0.51 9.8 % Net income-diluted $ 0.28 $ 0.25 12.0 % $ 0.54 $ 0.48 12.5 % Average number of shares outstanding: Basic 23,904,123 23,606,427 23,894,732 23,497,800 Diluted 24,941,947 25,045,764 24,946,583 24,952,496 As of June 30, 2007 � 2006 � % Change � Selected Balance Sheet Data: Loans, net $ 1,737,852 $ 1,451,864 19.7 % Investment securities 265,169 204,793 29.5 % Assets 2,113,547 1,728,666 22.3 % Deposits 1,745,456 1,428,393 22.2 % Stockholders� equity 152,612 125,073 22.0 % Book value per share (2) $ 6.38 $ 5.29 20.6 % � Capital Ratios (% of risk weighted assets): Tier 1 capital: Company 10.29 % 10.84 % Bank 7.83 % 7.91 % Total qualifying capital: Company 11.27 % 11.91 % Bank 11.05 % 11.67 % � Asset Quality Non-performing assets: Impaired loans $ 3,232 $ 1,910 69.2 % Non-accrual loans � 3 � � 562 � -99.5 % Total non-performing loans $ 3,235 $ 2,472 30.9 % Loans 90+ days past due and still accruing � 461 � � 136 � 239.0 % Total non-performing assets and past due loans $ 3,696 $ 2,608 41.7 % Non-performing loans to total loans: 0.18 % 0.17 % to total assets: 0.15 % 0.14 % Non-performing loans and past due loans to total loans: 0.21 % 0.18 % to total assets: 0.17 % 0.15 % Allowance for loan losses to total loans 1.06 % 1.07 % Net charge-offs (recoveries) $ 25 $ 80 Net charge-offs to average loans outstanding 0.001 % 0.01 % � As of June 30, 2007 � 2006 � % Change � Loan Portfolio: Commercial $ 194,327 $ 148,828 30.6 % Real estate-one to four family residential 218,113 167,950 29.9 % Real estate-multifamily residential 50,174 53,703 -6.6 % Real estate-nonfarm, nonresidential 762,014 640,762 18.9 % Real estate-construction 530,139 453,712 16.8 % Consumer � 7,088 � � 7,659 � -7.5 % Total loans $ 1,761,855 $ 1,472,614 19.6 % Less unearned income 5,266 5,049 4.3 % Less allowance for loan losses � 18,737 � � 15,701 � 19.3 % Loans, net $ 1,737,852 $ 1,451,864 19.7 % � Investment Securities (at book value): Available-for-sale: U.S. Government Agency obligations $ 190,661 $ 145,904 30.7 % Domestic corporate debt obligations 9,525 6,048 57.5 % Obligations of states and political subdivisions 15,093 1,351 1,017.2 % Restricted stock: Federal Reserve Bank 1,442 1,442 -- Federal Home Loan Bank 3,506 3,034 15.6 % Community Bankers� Bank � 55 � � 55 � -- � $ 220,282 $ 157,834 39.6 % Held-to-maturity: U.S. Government Agency obligations $ 33,018 $ 37,994 -13.1 % Obligations of states and political subdivisions � 11,869 � � 8,965 � 32.4 % $ 44,887 $ 46,959 -4.4 % (1) Computed by dividing non-interest expense by the sum of net interest income on a tax-equivalent basis using a 35% rate and non-interest income. (2) Adjusted to give effect to a 10% stock dividend in May 2007. Virginia Commerce Bancorp, Inc. Consolidated Balance Sheets (Dollars in thousands, except per share data) As of June 30, (Unaudited) � 2007 2006 Assets Cash and due from banks $ 33,650 $ 29,566 Interest-bearing deposits with other banks 1,109 1,055 Securities (fair value: 2007, $263,783; 2006, $202,935) 265,169 204,793 Federal funds sold 16,000 -- Loans held-for-sale 12,964 8,785 Loans, net of allowance for loan losses of $18,737 in 2007 and $15,701 in 2006 1,737,852 1,451,864 Bank premises and equipment, net 10,903 8,322 Accrued interest receivable 10,890 7,490 Other assets � 25,010 � � 16,791 � Total assets $ 2,113,547 � $ 1,728,666 � Liabilities and Stockholders� Equity Deposits Demand deposits $ 205,848 $ 205,795 Savings and interest-bearing demand deposits 504,413 397,968 Time deposits � 1,035,195 � � 824,630 � Total deposits $ 1,745,456 $ 1,428,393 Securities sold under agreement to repurchase and federal funds purchased 163,041 124,252 Trust preferred capital notes 44,344 44,344 Accrued interest payable 5,945 4,071 Other liabilities � 2,149 � � 2,533 � Total liabilities $ 1,960,935 � $ 1,603,593 � Stockholders� Equity Preferred stock, $1.00 par, 1,000,000 shares authorized and un-issued $ -- $ -- Common stock, $1.00 par, 50,000,000 shares authorized, issued and outstanding 2007, 23,914,992; 2006, 21,501,026 23,915 21,501 Surplus 72,772 30,663 Retained earnings 57,805 75,227 Accumulated other comprehensive loss, net � (1,880 ) � (2,318 ) Total stockholders� equity $ 152,612 $ 125,073 Total liabilities and stockholders� equity $ 2,113,547 � $ 1,728,666 � Virginia Commerce Bancorp, Inc. Consolidated Statements of Income (Dollars in thousands, except per share data) (Unaudited) � Three Months Ended Six Months Ended June 30, � June 30, 2007 � 2006 � 2007 � 2006 � Interest and dividend income: Interest and fees on loans $ 34,515 $ 28,098 $ 67,315 $ 53,466 Interest and dividends on investment securities: Taxable 2,920 2,012 5,596 3,597 Tax-exempt 163 60 253 120 Dividends 74 64 140 127 Interest on deposits with other banks 17 13 35 26 Interest on federal funds sold � 90 � � 347 � � 547 � � 499 Total interest and dividend income $ 37,779 � $ 30,594 � $ 73,886 � $ 57,835 Interest expense: Deposits $ 16,756 $ 11,379 $ 32,946 $ 20,550 Securities sold under agreement to repurchase and federal funds purchased 1,585 1,109 2,836 2,065 Other borrowed funds -- -- -- 216 Trust preferred capital notes � 782 � � 758 � � 1,559 � � 1,504 Total interest expense $ 19,123 � $ 13,246 � $ 37,341 � $ 24,335 Net interest income: $ 18,656 $ 17,348 $ 36,545 $ 33,500 Provision for loan losses � 300 � � 955 � � 660 � � 1,960 Net interest income after provision for loan losses $ 18,356 � $ 16,393 � $ 35,885 � $ 31,540 Non-interest income: Service charges and other fees $ 820 $ 796 $ 1,660 $ 1,611 Non-deposit investment services commissions 193 136 377 227 Fees and net gains on loans held-for-sale 769 705 1,430 1,422 Other � 193 � � 98 � � 370 � � 186 Total non-interest income $ 1,975 � $ 1,735 � $ 3,837 � $ 3,446 Non-interest expense: Salaries and employee benefits $ 5,785 $ 4,911 $ 11,321 $ 9,731 Occupancy expense 1,628 1,289 3,244 2,556 Data processing expense 430 465 997 942 Other operating expense � 2,054 � � 1,819 � � 3,824 � � 3,449 Total non-interest expense $ 9,897 � $ 8,484 � $ 19,386 � $ 16,678 Income before taxes on income $ 10,434 $ 9,644 $ 20,336 $ 18,308 Provision for income taxes � 3,555 � � 3,366 � � 6,983 � � 6,316 Net Income $ 6,879 � $ 6,278 � $ 13,353 � $ 11,992 � Earnings per common share, basic (1) $ 0.29 $ 0.26 $ 0.56 $ 0.51 Earnings per common share, diluted (1) $ 0.28 $ 0.25 $ 0.54 $ 0.48 (1) Adjusted to give effect to a 10% stock dividend in May 2007. Virginia Commerce Bancorp, Inc. Consolidated Average Balances, Yields, and Rates Three Months Ended June 30, (Unaudited) � � � � � � � � � � 2007 � 2006 � (Dollars in thousands) Average Balance � Interest Income-Expense � Average Yields /Rates Average Balance � Interest Income-Expense � Average Yields /Rates Assets Securities (1) $ 260,680 $ 3,157 4.92 % $ 200,856 $ 2,136 4.29 % Loans, net of unearned income (2) 1,733,803 34,515 7.99 % 1,431,803 28,098 7.76 % Interest-bearing deposits in other banks 1,213 17 5.64 % 1,052 13 4.95 % Federal funds sold � 6,879 � � 90 � 5.18 % � 29,144 � � 347 � 4.71 % Total interest-earning assets $ 2,002,575 $ 37,779 7.58 % $ 1,662,855 $ 30,594 7.38 % Other assets � 61,465 � 49,328 Total Assets $ 2,064,040 $ 1,712,183 � Liabilities and Stockholders� Equity Interest-bearing deposits: NOW accounts $ 159,701 $ 673 1.69 % $ 183,869 $ 755 1.65 % Money market accounts 227,913 2,258 3.97 % 193,969 1,628 3.37 % Savings accounts 106,170 1,172 4.43 % 17,080 23 0.54 % Time deposits � 1,011,207 � � 12,653 � 5.02 % � 831,299 � � 8,973 � 4.33 % Total interest-bearing deposits $ 1,504,991 $ 16,756 4.47 % $ 1,226,217 $ 11,379 3.72 % Securities sold under agreement to repurchase and federal funds purchased 160,953 1,585 3.95 % 110,164 1,109 4.04 % Other borrowed funds -- -- -- -- -- -- Trust preferred capital notes � 43,000 � � 782 � 7.20 % � 43,000 � � 758 � 6.97 % Total interest-bearing liabilities $ 1,708,944 $ 19,123 4.49 % $ 1,379,381 $ 13,246 3.85 % Demand deposits and other liabilities � 205,237 � 210,822 Total liabilities $ 1,914,181 $ 1,590,203 Stockholders� equity � 149,859 � 121,980 Total liabilities and stockholders� equity $ 2,064,040 $ 1,712,183 Interest rate spread 3.09 % 3.53 % Net interest income and margin $ 18,656 3.75 % $ 17,348 4.19 % (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 for both the three months ended June 30, 2007 and 2006. Virginia Commerce Bancorp, Inc. Consolidated Average Balances, Yields, and Rates Six Months Ended June 30, (Unaudited) � � � � � � � � � � 2007 2006 (Dollars in thousands) Average Balance � Interest Income-Expense � Average Yields /Rates Average Balance � Interest Income-Expense � Average Yields /Rates Assets Securities (1) $ 251,088 $ 5,989 4.83% $ 187,514 $ 3,844 4.14% Loans, net of unearned income (2) 1,701,409 67,315 7.98% 1,388,348 53,466 7.77% Interest-bearing deposits in other banks 1,269 35 5.64% 1,052 26 4.95% Federal funds sold 20,928 � 547 � 5.20% 21,413 � 499 � 4.63% Total interest-earning assets $1,974,694 $73,886 7.56% $ 1,598,327 $57,835 7.30% Other assets 60,525 46,618 Total Assets $2,035,219 $1,644,945 � Liabilities and Stockholders� Equity Interest-bearing deposits: NOW accounts $ 158,356 $ 1,321 1.68% $ 189,943 $ 1,566 1.66% Money market accounts 232,366 4,547 3.95% 167,334 2,633 3.17% Savings accounts 92,159 1,979 4.33% 17,832 48 0.54% Time deposits 1,013,631 � 25,099 � 4.99% 789,723 � 16,303 � 4.16% Total interest-bearing deposits $1,496,512 $32,946 4.44% $1,164,832 $20,550 3.56% Securities sold under agreement to repurchase and federal funds purchased 145,786 2,836 3.92% 105,342 2,065 3.95% Other borrowed funds -- -- -- 9,116 216 4.72% Trust preferred capital notes 43,000 � 1,559 � 7.21% 43,000 � 1,504 � 6.96% Total interest-bearing liabilities $1,685,298 $37,341 4.47% $1,322,290 $24,335 3.71% Demand deposits and other liabilities 203,564 204,110 Total liabilities $1,888,862 $1,526,400 Stockholders� equity 146,357 118,545 Total liabilities and stockholders� equity $2,035,219 $ 1,644,945 Interest rate spread 3.09% 3.59% Net interest income and margin $36,545 3.75% $33,500 4.23% (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 $2.8 million and $2.9 million for the six months ended June 30, 2007 and 2006, respectively.