Virginia Commerce Bancorp, Inc. (the “Company”), (Nasdaq: VCBI),
parent company of Virginia Commerce Bank (the “Bank”), today
reported its financial results for the first quarter of 2012.
First Quarter 2012
Highlights
- Net Income Available to Common
Stockholders and Diluted Earnings per Common Share Growth: Net
income available to common stockholders increased to $4.8 million,
or $0.14 per diluted common share, for the first quarter of 2012.
This represented a 16.7% increase in diluted earnings per common
share compared to $0.12 for the first quarter of 2011.
Sequentially, net income available to common stockholders decreased
$655 thousand or 12.1%, from $5.4 million for the fourth quarter of
2011.
- Asset Quality: Non-performing
assets decreased 19.1%, from $73.5 million as of March 31, 2011, to
$59.5 million at March 31, 2012, while sequentially increasing
$11.7 million, or 24.6%. Total troubled debt restructurings
(“TDRs”) declined $49.5 million, a reduction of 53.8% to $42.4
million at March 31, 2012, with a sequential decrease of $9.8
million, or 18.8%.
- Significant Improvement in the
Average Interest Bearing Liabilities: The average cost of
interest bearing liabilities decreased by 44 basis points from
1.70% for the first quarter of 2011, to 1.26% for the first quarter
of 2012, with a sequential decrease of 14 basis points.
- Capital Strength and Book Value per
Common Share Growth: The ratio of tangible common equity
improved to 7.75% at March 31, 2012, as compared 7.37% and 6.74% at
December 31, 2011, and March 31, 2011, respectively. The book value
per common share increased to $7.23, as compared to $7.17 and $6.35
at December 31, 2011, and March 31, 2011, respectively.
Peter A. Converse, President and Chief Executive Officer,
commented, “Starting the year with year-over-year improvement in
quarterly earnings and asset quality is gratifying. It speaks to
the overall progress and positive trends in both since 2009. The
sequential decrease in net income available to stockholders and
sequential increase in non-performing assets, or NPAs, should not
be viewed as a reversal of those trends. Rather, management would
characterize them as a slight detour on this year’s road to
continued performance improvement.”
“The quarterly earnings decline on a linked basis was mostly
attributable to a $2.4 million increase in provisioning expense
necessitated by the placement of $18.1 million in loans to two
borrowers on non-accrual and the planned disposition of other
non-performing loans and TDRs. In general, the aggressive
disposition of problem assets in the first quarter resulted in
sequentially higher levels of charge-offs and write-downs or losses
on the sale of other real estate owned. These levels are more
reflective of a disposition strategy and not indicative of run
rates for subsequent quarters this year. Furthermore, there were
offsetting positive trends in other sequential asset quality
metrics for the quarter just ended. TDRs declined $9.8 million, or
18.8%, from $52.3 million at December 31, 2011, to $42.4 million at
March 31, 2012. Loans 30-89 days past due ended the quarter at $8.5
million, or 0.4% of total loans, down from $13.1 million at
December 31, 2011, and finishing at their lowest point since the
December 31, 2009 level of $4.7 million. Both trends support
management’s belief that the first quarter is not indicative of a
deteriorating direction in asset quality.”
Converse continued, “Apart from the effects of heightened
provisioning expense and write-downs of other real estate owned,
earnings would have shown a meaningful quarter-over-quarter
increase. We anticipate that potential earnings improvement will be
further enhanced going forward with the resumption of positive loan
growth that began to show promise at the end of last year. With the
prospect of less loan run-off related to problem loan resolution
including charge-offs, it is more likely that future loan volume
will result in positive portfolio growth and an ultimate rise in
net interest income. Nonetheless, like many banks, our progress in
loan growth will be challenged by any lingering softness in demand
and intensified competition.”
Converse concluded, “Our confidence in being able to sustain
earnings and asset quality progress remains high as does our
resolve to pay off TARP from earnings. We anticipate applying to
the Federal Reserve in the second quarter for approval to initiate
an incremental curtailment of at least 25%. However, we will also
look to be opportunistic with the prospect of further TARP auctions
by the Treasury, as this activity progresses.”
SUMMARY REVIEW OF FINANCIAL PERFORMANCE
Net Income
For the three months ended March 31, 2012, the Company recorded
net income of $6.1 million. After an effective dividend of $1.4
million to the U.S. Treasury on preferred stock, the Company
reported net income available to common stockholders of $4.8
million, or $0.14 per diluted common share, compared to net income
available to common shareholders of $3.7 million, or $0.12 per
diluted common share, for the three months ended March 31, 2011.
The year-over-year earnings improvement was largely attributable to
increases in non-interest income partially offset by increases in
non-interest expense. The Company’s net income available to common
stockholders decreased sequentially from $5.4 million, or $0.18 per
diluted common share, for the fourth quarter of 2011, primarily due
to a slight decline in net interest income, a $2.4 million increase
in the provision for loan losses, and a $775 thousand increase in
non-interest expense, partially offset by a $2.5 million increase
in non-interest income.
Adjusted operating earnings (a non-GAAP measure) for the three
months ended March 31, 2012, were $3.6 million, down $270 thousand,
or 6.9%, as compared to $3.9 million for the same period in 2011.
On a sequential basis, adjusted operating earnings were down $1.8
million, or 33.7%, for the three months ended March 31, 2012. The
year-over-year and sequential decreases in the Company’s adjusted
operating earnings are mostly due to higher provisioning for loan
losses and increased non-interest expense. The Company calculates
adjusted operating earnings by excluding gains or losses on other
real estate owned, gains and losses on sale of securities,
impairment losses on securities, and death benefits from bank-owned
life insurance, from net income.
Asset Quality and Provisions For Loan Losses
Provisions for loan losses were $6.0 million for the three
months ended March 31, 2012, compared to $5.8 million in the same
period in 2011, with total net charge-offs of $9.4 million in the
first quarter of 2012, versus $11.8 million for the first quarter
of 2011. Total non-performing assets and loans 90+ days past due
declined from $73.5 million at March 31, 2011, to $59.5 million at
March 31, 2012, a reduction of 19.0%, and increased $11.7 million
from $47.8 million as of December 31, 2011. The sequential increase
in non-performing assets and loans 90+ days past due was primarily
driven by the placement of two large credit relationships on
non-accrual. One represents a $10.0 million commercial land
development loan in the Fredericksburg market which has been
completed, but failed to meet certain lot sale requirements
established as part of the loan’s terms, resulting in cancellation
of further advances from the interest reserve. The Company has
engaged an outside consultant to evaluate disposition strategies
and also continues to work with the borrower on enhanced marketing.
The Company has evaluated the loan and a related loan of $835
thousand that was also placed on non-accrual for impairment and
believes both loans are adequately secured. The second credit
relationship represents a commercial loan with a balance of $7.3
million as of March 31, 2012. This loan is collateralized by the
assignment of a number of real estate secured promissory notes.
Based upon certain events, the Company has taken control of the
collateral notes and is working with the borrower to liquidate them
through sale of the notes or foreclosure and sale of the underlying
properties. The Company has evaluated the promissory notes for
impairment and established appropriate loan loss reserves. The
loans related to both of these credit relationships were identified
as problem assets prior to being placed on non-accrual and offset a
net decrease in other non-performing assets of $6.8 million, which
was achieved through note sales, foreclosure and collateral
disposition.
Charge-offs during the first quarter of 2012, included the
write-down of a number of loans in anticipation of pending note or
collateral sales of non-performing assets or troubled debt
restructurings. Significant among these transactions were a $1.3
million charge to facilitate a $3.5 million commercial note sale of
a TDR, a $654 thousand charge to complete the sale of a retail
center, $640 thousand to finalize the sale of two commercial real
estate properties, $1.4 million in anticipation of the sale of a
$2.3 million non-performing land development note in the second
quarter and $340 thousand to complete the note sale of several
non-performing loans secured by two rental townhouses and a
residential lot. The balance of charge-offs represented the
adjustment of non-performing loan balances to the current estimated
fair value of underlying collateral or the write-down of
one-to-four family residential and consumer loans due to
uncollectibility caused by bankruptcy or short sale transactions. A
majority of these charge-offs were supported by specific reserves.
As of March 31, 2012, reserves for loan losses represented 2.11% of
total loans, down from 2.24% at December 31, 2011, with reserves
covering 97.4% of total non-performing loans as of March 31,
2012.
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
March 31, 2012, $26.4 million, or 56.6%, of non-performing loans
represented acquisition, development and construction (“ADC”)
loans, $3.1 million, or 6.6%, represented non-farm, non-residential
loans, $6.6 million, or 14.3%, represented loans on one-to-four
family residential properties, and $10.0 million, or 21.4%,
represented commercial and industrial (“C&I”) loans. As of
March 31, 2012, specific reserves of $18.4 million have been
established for non-performing loans and other loans determined to
have an impairment. The Company continues to pursue an aggressive
campaign to further 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 March 31, 2012, are loans
classified as TDRs, totaling $42.4 million, a sequential reduction
of $9.8 million from $52.3 million at December 31, 2011. 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 $11.5 million in
ADC loans, $19.2 million in non-farm, non-residential real estate
loans, $9.3 million in C&I loans and $2.4 million in
one-to-four family residential loans. At March 31, 2012, 14.9% of
the Company’s TDRs were reviewable TDRs and 85.1% 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. The sequential
reduction in TDRs during the first quarter of 2012, was
attributable to note and collateral sales of $5.1 million, upgrades
to performing status of reviewable TDRs of $3.9 million, principal
payments of $226 thousand, downgrades to non-performing status of
$799 thousand and charge-offs of $604 thousand. These reductions
were partially offset by TDR additions of $777 thousand.
Net Interest Income
Net interest income for the first quarter of 2012, of $26.8
million was up $596 thousand, or 2.3%, over the same quarter last
year. The net interest margin decreased 18 basis points from 3.99%
in the first quarter of 2011, to 3.81% for the same period in 2012.
On a sequential basis, the net interest margin was up three basis
points from 3.78% for the fourth quarter of 2011. The
year-over-year decrease in the net interest margin was primarily
driven by lower yielding loan and security assets, the impact of
which was partially offset by lower cost of interest bearing
liabilities. Interest and dividend income decreased $1.5 million on
average total interest-earnings assets of $2.87 billion for the
three months ended March 31, 2012, compared to interest and
dividend income generated by average total interest-earnings assets
of $2.69 billion for the same period in 2011. The decline in
interest and dividend income is mostly attributable to lower
yielding 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 March 31, 2012, from an average
total interest-bearing liability balance of $2.23 billion for the
same period in 2011. The average rate paid on total
interest-bearing liabilities was 1.26% for the first quarter of
2012, as compared to 1.70% for the first quarter of 2011, and 1.55%
for the fourth quarter. Management anticipates the net interest
margin will range between 3.75% and 3.90% for the year.
Non-Interest Income
For the three months ended March 31, 2012, the Company
recognized $4.9 million in non-interest income, compared to
non-interest income of $1.5 million for the three months ended
March 31, 2011. Included in the first quarter 2012, non-interest
income is a gain on sale of securities of $2.6 million, as compared
to a similar gain of $503 thousand in the first quarter of 2011.
The Company did not generate any gains on sale of securities during
the fourth quarter of 2011. There was no impairment loss on
securities in the first quarter of 2012, as compared to a $732
thousand loss for the three months ended March 31, 2011.
Fees and net gains on loans held-for-sale increased in the first
quarter 2012, on a year-over-year basis by $480 thousand, or 92.1%,
to $1.0 million. The increase is directly attributed to higher
demand for residential mortgages in our markets. Mortgage loans
held-for sale totaling $34.0 million were closed in the first
quarter of 2012, as compared to $24.0 million in the first quarter
of 2011. Sequentially, fees and net gains on loans held-for-sale
were down $122 thousand from the fourth quarter of 2011.
Non-Interest Expense
Non-interest expense increased $2.2 million, or 15.1%, from
$14.5 million in the first quarter of 2011, to $16.6 million for
the first quarter of 2012. The majority of the year-over-year
increase was due to an increase in salaries and employee benefits
related to commissions payable in connection with greater than
anticipated mortgage production, a $670 thousand increase in losses
on other real estate owned and higher other operating expenses
consisting mostly of legal fees relating to OREO and credit and
collection. FDIC insurance expenses declined $294 thousand, or
22.8%, in the first quarter compared to the same period in 2011.
The decrease in FDIC insurance premiums was primarily due to
changes in the FDIC calculation for computing deposit insurance
assessments.
Investment Securities
Investment securities increased $181.1 million, or 43.4%,
year-over-year to $598.2 million at March 31, 2012, and were down
$26.8 million sequentially from December 31, 2011. U.S. Government
agency securities, including mortgage-backed securities (“MBS”) and
collateralized mortgage obligations (“CMOs”) comprised a majority
of the year-over-year increase. During the first quarter of 2012,
the Company sold $58.6 million of investment securities resulting
in a $2.6 million gain on sale of securities, as compared to the
sale of $35.0 million of investment securities in the first quarter
of 2011, which resulted in a $503 thousand gain on sale of
securities. As of March 31, 2012, the Company transferred its
held-to-maturity investment portfolio with an amortized cost of
$30.0 million and a fair value of $32.5 million, to its
available-for-sale investment portfolio. As a result, an unrealized
gain of $2.5 million net of tax was recorded in stockholders’
equity as accumulated other comprehensive income. The transfer does
not represent a change in the Company’s investment strategy, merely
a reclassification of securities to align with Management’s
intention to hold all securities in its portfolio as
available-for-sale. The investment portfolio also contains four
pooled trust preferred securities with a book value of $5.6
million, 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 since the first quarter of 2011, which
included an impairment loss of $732 thousand. The increase of
$181.1 million in investment securities from March 31, 2011, to
March 31, 2012, was due to the investment of excess funds provided
primarily by customer deposits and repurchase agreements.
Investments were made predominantly in short-term, pass-through
securities, with an average life of three to four years or less.
This strategy positions the Company with strong liquid assets to
maintain a constant flow of funds to support future loan growth and
to provide repricing opportunities if rates begin to rise over the
next few years.
Loans
Loans, net of allowance for loan losses, decreased $22.8
million, or 1.1%, from $2.12 billion at March 31, 2011, to $2.10
billion at March 31, 2012. Non-farm, non-residential real estate
loans increased $51.3 million, or 4.6%, multifamily real estate
loans decreased $8.7 million, or 9.7%, ADC loans fell by $87.7
million, or 25.3%, and C&I loans were up $21.0 million, or
9.3%. Sequentially, net loans were down $20.8 million, or 0.98%.
The sequential decline in loans was driven primarily by a $68.0
million decrease in ADC loans as the Company continues to restrict
this type of lending, resolve problem loans in this category and
re-orient lending activities toward building a greater market share
in commercial loans, owner-occupied and select income property
commercial real estate loans, multi-family residential loans and
one-to-four family residential loans to better balance and
diversify the loan portfolio. The sequential decline in ADC loans
offset $13.1 million and $19.7 million sequential increases in
owner-occupied and non-owner-occupied commercial mortgages,
respectively as well as $4.5 million and $10.7 million sequential
increases in multi-family and one-to-four family residential loans
respectively. Commercial loans declined $4.6 million, as year-end
credit line borrowings initiated by closely-held companies to defer
cash basis taxes, were repaid. Lending efforts for the remainder of
2012, will continue to be focused on building greater market share
in commercial lending, especially in sectors forecast for growth,
such as government contract lending, professional practices and
associations and select service industries, with strategic hiring,
marketing campaigns and calling efforts.
Deposits
Total deposits at March 31, 2012, were $2.24 billion, a decrease
of $19.1 million, or 0.8%, compared to $2.26 billion at March 31,
2011, with demand deposits increasing $45.2 million, or 15.6%,
savings and interest-bearing demand deposits decreasing by $14.2
million, or 1.2%, and time deposits decreasing $50.1 million, or
6.4%. 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 total interest-bearing
deposits, the Company was successful in its strategy to further
reduce the interest rate paid on these deposit products, without
experiencing a significant decrease in total interest-bearing
deposits. The decrease in total interest-bearing deposits was $64.3
million, or 3.3%, while the interest rate paid on total
interest-bearing deposits decreased by 41 basis points from 1.44%
at March 31, 2011, to 1.03% at March 31, 2012. On a linked quarter
basis, total deposits declined $54.3 million, or 2.4%, with demand
deposits declining by $2.4 million, or 0.7%, savings and
interest-bearing demand accounts decreasing $392 thousand, and time
deposits decreasing by $51.6 million, or 6.6%. The reduction in
time deposits was intentional and resulted from a series of
interest rate reductions that began in late 2011, and continued
into 2012. As a result, the cost of total interest-bearing deposits
declined from 1.18% at December 31, 2011, to 1.03% at March 31,
2012. The Company’s deposit mix continued to be weighted heavily in
lower cost demand deposits, savings and interest-bearing demand
deposits, which comprised 67.4% of total deposits at March 31,
2012, compared to 65.5% at March 31, 2011.
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 $43.3 million, or 17.1%, from
$253.4 million at March 31, 2011, to $296.6 million at March 31,
2012, with approximately $10.9 million in net proceeds from the
above referenced stock issuances, net income to common stockholders
of $22.9 million over the twelve-month period, a $6.2 million
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 14.13%
at March 31, 2011, to 15.55% at March 31, 2012, and total
qualifying capital ratio increased from 15.40% to 16.81%, and its
tangible common equity ratio increased from 6.74% to 7.75%.
Sequentially, the Company’s Tier 1 and total qualifying capital
ratios are each up 100 basis points due to lower levels of
risk-weighted assets and increased equity during the first quarter
of 2012, and its tangible common equity ratio is up 38 basis points
primarily due to increases in equity during the first quarter of
2012.
CONFERENCE CALL
The Company will host a teleconference call for the financial
community on April 18, 2012, at 11:00 a.m. Eastern Daylight Time to
discuss the first 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 April 18, 2012, until 11:59 p.m. Eastern
Daylight Time on April 25, 2012. The public is invited to listen to
this conference call replay by dialing 888-266-2081 and entering
access code 1575328.
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
gains or losses on other real estate owned, gains and losses on
sale of securities, impairment losses on securities, and death
benefits 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 March 31, 2012, and
March 31, 2011, is as follows:
Three Months
Ended
March 31,
(in thousands)
2012
2011 Net Income Available to Common
Stockholders $ 4,779 $ 3,651 Adjustments to net income: Loss on
other real estate owned 826 156 Impairment loss on securities --
732 Gain on sale of securities (2,592 ) (503 ) Net tax effect
adjustment 618 (135 )
Adjusted Operating Earnings $
3,631 $ 3,901
The adjusted efficiency ratio is a non-GAAP financial measure
that is computed by dividing non-interest expense, excluding gains
or losses on other real estate owned, by the sum of net interest
income on a tax equivalent basis, non-interest income before
impairment losses on securities and gain on sale of securities. 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 ended March 31, 2012, and
March 31, 2011, is as follows:
(in thousands) Three Months Ended March 31,
2012 2011 Summary
Operating Results: Non-interest expense $ 16,627 $
14,450 Loss on other real estate owned
826
156 Adjusted non-interest expense
$ 15,801 $ 14,294 Net interest income 26,779 26,183
Non-interest income 4,949 1,476 Impairment loss on securities --
732 Gain on sale of securities (2,592 ) (503 ) Total (1) $
29,136 $ 27,888
Efficiency Ratio, adjusted 53.6 %
50.6 %
(1) Tax Equivalent Income of $29,501 for
2012, and $28,276 for 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 March 31, 2012, March 31, 2011, and December 31, 2011,
is as follows:
(in thousands)
As of
March 31, Dec 31, Sept
31, 2012 2011
2011
2011 Tangible common equity:
Total stockholders’ equity $ 296,637 $ 253,373 $ 283,771 $ 275,546
Less: Outstanding TARP senior preferred stock 67,670 65,873
67,195 66,794 Intangible assets
--
-- --
-- Tangible common equity $ 228,966 $ 187,500 $
216,576 $ 208,752 Total tangible assets $ 2,954,226 $
2,783,633 $ 2,938,518 $ 2,942,323
Tangible common equity
ratio 7.75 % 6.74 % 7.37 % 7.09 %
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 March 31,
Three Months Ended December 31,
2012
2011 %
Change 2011 %
Change Summary Operating Results:
Interest and dividend income $ 34,005 $
35,517 -4.3 % $ 35,286 -3.6 % Interest expense 7,226 9,334 -22.6 %
8,184 -11.7 % Net interest income 26,779 26,183 2.3 % 27,102 -1.2 %
Provision for loan losses 5,994 5,843 2.6 % 3,639 64.7 %
Non-interest income 4,949 1,476 235.3 % 2,473 100.1 % Non-interest
expense 16,627 14,450 15.1 % 15,852 4.9 % Income before income
taxes 9,107 7,366 23.6 % 10,084 -9.7 % Net income $ 6,142 $ 4,966
23.7 % $ 6,722 -8.6 % Effective dividend on preferred stock 1,363
1,315 3.7 % 1,288 5.8 % Net income available to common stockholders
$ 4,779 $ 3,651 30.9 % $ 5,434 -12.1 %
Performance
Ratios: Return on average assets 0.84 % 0.73 % 0.90 % Return on
average equity 8.46 % 8.09 % 9.52 % Net interest margin 3.81 % 3.99
% 3.78 % Efficiency ratio, adjusted 53.56 % 50.55 % 52.75 %
Per Share Data: Earnings per common share-basic $ 0.15 $
0.13 15.4 % $ 0.18 -16.7 % Earnings per common share-diluted $ 0.14
$ 0.12 16.7 % $ 0.17 -17.7 % Average number of shares outstanding:
Basic 31,503,351 29,264,610 30,212,021 Diluted 33,547,703
30,404,089 31,575,158 As of March 31, As of
2012 2011 %
Change 12/31/11 % Change
Selected Balance Sheet Data: Loans, net $ 2,099,484 $
2,122,309 -1.1 % $ 2,120,291 1.0 % Investment securities 598,178
417,071 43.4 % 624,956 -4.3 % Assets 2,954,226 2,783,633 6.1 %
2,938,518 0.5 % Deposits 2,237,848 2,256,970 -0.8 % 2,292,158 -2.4
% Stockholders’ equity 296,637 253,373 17.1 % 283,771 4.5 % Book
value per common share $ 7.23 $ 6.35 13.9 % $ 7.17 0.8 %
Capital Ratios (% of risk weighted assets): Tier 1 capital:
Company 15.55 % 14.13 % 14.55 % Bank 14.93 % 13.73 % 14.21 % Total
qualifying capital: Company 16.81 % 15.40 % 15.81 % Bank 16.19 %
15.00 % 15.47 % Tier 1 leverage: Company 12.12 % 11.48 % 11.61 %
Bank 11.70 % 11.15 % 11.40 % Tangible common equity: Company 7.75 %
6.74 % 7.37 % (Dollars in
thousands) As of March 31, As of 2012
2011 12/31/11 09/30/11
Asset Quality: Non-performing assets:
Non-accrual loans: Commercial $ 9,968 $ 5,622 $ 5,005 $ 5,486 Real
estate-one-to-four family residential: Permanent first and second
3,060 2,781 3,912 1,960 Home equity loans and lines
3,580 3,325
3,142 3,051 Total
real estate-one-to-four family residential $ 6,640 $ 6,106 $ 7,054
$ 5,011 Real estate-multi-family residential 476 -- 476 486 Real
estate-non-farm, non-residential: Owner-occupied 2,997 8,016 1,999
3,689 Non-owner-occupied
88
1,988 --
3,878 Total real estate-non-farm,
non-residential $ 3,085 $ 10,004 $ 1,999 $ 7,567 Real
estate-construction: Residential-builder 12,122 24,234 18,479
20,181 Commercial
14,232
8,625 5,505
6,083 Total real estate-construction $ 26,354 $
32,859 $ 23,984 $ 26,264 Consumer
19
18 18
22 Total non-accrual loans 46,542 54,609 38,536
44,836 OREO
12,928
18,879 8,925
10,377 Total non-performing assets $ 59,470 $
73,488 $ 47,461 $ 55,213 Loans 90+ days past due and still
accruing: Commercial $ -- $ -- $ -- $ 89 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 -- 25 -- -- Non-owner-occupied
-- --
-- -- Total real
estate-non-farm, non-residential $ -- $ 25 $ -- $ -- Real
estate-construction Residential-builder -- -- -- 574 Commercial
-- --
-- -- Total real
estate-construction: $ -- $ -- $ -- $ 574 Consumer
-- --
11 -- Total loans
90+ days past due and still accruing $ 56 $ 25 $ 332 $ 663
Total non-performing assets and past due loans $ 59,526 $ 73,513 $
47,793 $ 55,876 Troubled debt restructurings $ 42,426 $
91,876 $ 52,264 $ 71,686 Non-performing assets to total
loans: 2.77 % 3.37 % 2.18 % 2.57 % to total assets: 2.01 % 2.64 %
1.62 % 1.88 % Non-performing assets and past due loans to total
loans: 2.77 % 3.37 % 2.20 % 2.60 % to total assets: 2.01 % 2.64 %
1.63 % 1.90 % Allowance for loan losses to total loans 2.11 % 2.59
% 2.24 % 2.30 % Allowance for loan losses to non-performing loans
97.37 % 103.35 % 125.37 % 108.58 % Total allowance for loan
losses $ 45,371 $ 56,465 $ 48,729 $ 49,405
(Dollars in thousands) As of March 31, As of 2012
2011 12/31/11
09/30/11 Loans 30 to 89 days past due and
still accruing Commercial $ 1,916 $ 1,063 $ 1,259 $ 671 Real
estate-one-to-four family residential: Permanent first and second
4,273 2,376 3,548 1,761 Home equity loans and lines
456 89
390 99 Total real
estate-one-to-four family residential $ 4,729 $ 2,465 $ 3,938 $
1,860 Real estate-multi-family residential -- 495 -- -- Real
estate-non-farm, non-residential: Owner-occupied 278 -- 1,008 3,582
Non-owner-occupied
1,487
5,940 6,063
6,072 Total real estate-non-farm,
non-residential $ 1,765 $ 5,940 $ 7,071 $ 9,654 Real
estate-construction: Residential-owner-occupied -- -- -- --
Residential-builder -- 378 761 573 Commercial
-- --
-- -- Total real
estate-construction: $ -- $ 378 $ 761 $ 573 Consumer 99 63 105 43
Farmland
-- --
-- --
Total loans 30 to 89 days past due $ 8,509 $ 10,404 $ 13,134 $
12,801 For the three months ended March 31, For twelve
months ended For nine months ended 2012
2011 12/31/11 09/30/11
Net charge-offs Commercial $ 4,667 $ 395 $ 1,685 $
1,559 Real estate-one-to-four family residential: Permanent first
and second (127 ) 1,597 2,327 2,101 Home equity loans and lines
338 729
1,049 769
Total real estate-one-to-four family residential $ 211 $ 2,326 $
3,376 $ 2,870 Real estate-multi-family residential -- -- -- -- Real
estate-non-farm, non-residential: Owner-occupied 47 54 (142 ) 171
Non-owner-occupied
632
1,530 8,899
6,267 Total real estate-non-farm,
non-residential $ 679 $ 1,584 $ 8,757 $ 6,438 Real
estate-construction: Residential-owner-occupied -- -- (38 ) --
Residential-builder 3,486 910 7,042 5,796 Commercial
100 6,595
7,622 7,494 Total
real estate-construction $ 3,586 $ 7,505 $ 14,626 $ 13,290 Consumer
209 10 118 90 Farmland
--
-- --
-- Total net charge-offs $ 9,352 $ 11,820 $
28,562 $ 24,247 Net charge-offs to average loans outstanding 0.43 %
0.54 % 1.31 % 1.11 % Total provision for loan losses $ 5,994
$ 5,843 $ 14,849 $ 11,210
Troubled Debt Restructurings (TDRs) -
By Loan Type
As of March 31, 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
Loan Type:
Commercial -- $ -- 0.0 % 7 $ 9,271 25.7 % 7 $ 9,271 21.8 %
Real estate-one-to-four family residential: Permanent first
and second 8 2,441 38.6 % -- -- 0.0 % 8 2,441 5.8 % Home equity
loans and lines
-- --
0.0 % --
-- 0.0 % --
-- 0.0 % Total real
estate-one-to-four family residential 8 $ 2,441 38.6 % -- -- 0.0 %
8 $ 2,441 5.8 %
Real estate-multi-family residential -- --
0.0 % -- -- 0.0 % -- -- 0.0 %
Real estate-non-farm,
non-residential: Owner-occupied 2 1,147 18.1 % 1 2,757 7.6 % 3
3,904 9.2 % Non-owner-occupied
2
2,279 36.0 % 4
13,035 36.1 %
6 15,314 36.1
% Total real estate-non-farm, non-residential 4 $
3,426 54.1 % 5 $ 15,792 43.7 % 9 $ 19,218 45.3 %
Real
estate-construction: Residential-owner-occupied -- -- 0.0 % --
-- 0.0 % -- -- 0.0 % Residential-builder -- -- 0.0 % 3 4,276 11.9 %
3 4,276 10.1 % Commercial
1 465
7.3 % 2
6,755 18.7 % 3
7,220 17.0 % Total
real estate-construction 1 $ 465 7.3 % 7 $ 11,031 30.6 % 6 $ 11,496
27.1 %
Consumer -- -- 0.0 % -- -- 0.0 % -- -- 0.0 %
Farmland -- --
0.0 % --
-- 0.0 % --
-- 0.0 % Total
13 $ 6,332 100.0 % 17 $ 36,094 100.0 % 30 $ 42,426 100.0 %
Troubled Debt Restructurings (TDRs) -
By Quarterly Review / Maturity
Date
As of March 31, 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 2nd Quarter 4 $ 3,245 51.2 % -- $ -- 0.0
% 4 $ 3,245 7.7 % 3rd Quarter 2 867 13.7 % -- -- 0.0 % 2 867 2.0 %
4th Quarter
1 95 1.5
% 8 13,118
36.3 % 9
13,213 31.1 % Total 2012: 7
$ 4,207 66.4 % 8 $ 13,118 36.3 % 15 $ 17,325 40.8 %
2013 1st
Quarter 3 1,517 24.0 % -- -- 0.0 % 3 1,517 3.6 % 2nd Quarter -- --
0.0 % -- -- 0.0 % -- -- 0.0 % 3rd Quarter 3 608 9.6 % -- -- 0.0 % 3
608 1.4 % 4th Quarter
-- --
0.0 % 3
3,879 10.8 % 3
3,879 9.2 % Total
2013: 6 $ 2,125 33.6 % 3 $ 3,879 10.8 % 9 $ 6,004 14.2 %
2014
& beyond -- $ --
0.0 % 6 $
19,097 52.9 % 6
$ 19,097 40.3 %
Total Loans
13 $ 6,332 100.0 % 17 $ 36,094 100.0 % 30 $ 42,426 100.0 %
Troubled Debt
Restructurings (TDRs)
Migration by Quarter
As of March 31, 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 -- -- -- -- Transfers 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
TOTAL Period Beginning Balance $ 102,996
$ 91,876 $ 81,070 $ 71,686 $ 52,264
Additions: New
Loans Added $ 3,188 $ 116 $ 984 $ 753 $ 541 $ 152,052 Loan Advances
486 197
53 40
236 3,776 Subtotal
Additions: $ 3,674 $ 313 $ 1,037 $ 793 $ 777 $ 155,828
Deductions: Sales Proceeds $ 367 $ 126 $ 4,597 $ 6,168 $
5,098 $ 21,187 Payments 1,989 1,715 532 990 226 8,766 Reviews 5,731
640 4,292 10,111 3,888 31,148 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 Transfers
to NPA
800 5,638
1,000 --
799 8,788
Subtotal Deductions: $ 14,794 $ 11,119 $ 10,421 $ 20,215 $
10,615 $ 113,402
Net Increase / (Decrease) ($11,120 )
($10,806 ) ($9,384 ) ($19,422 ) ($9,838 )
% Increase /
(Decrease) from Preceding Period (10.8 %) (11.8 %) (11.6 %)
(27.1 %) (18.8 %)
Period Ended Balance $ 91,876 $
81,070 $ 71,686 $ 52,264 $ 42,426 $ 42,426
(Dollars in thousands) As of March 31, As of 2012
2011 % Change 12/31/11 % Change
Loan Portfolio: Commercial $
247,837 $ 226,845 9.3 % $ 252,382 -1.8 % Real estate-one to four
family residential: Permanent first and second 256,578 265,696 -3.4
% 246,420 4.1 % Home equity loans and lines
127,034 126,413 0.5
% 126,530 0.4
% Total real estate-one-to-four family residential $
383,612 $ 392,109 -2.2 % $ 372,950 2.9 % Real estate-multifamily
residential 81,033 89,771 -9.7 % 76,506 5.9 % Real estate-non-farm,
non-residential: Owner-occupied 473,881 462,744 2.4 % 460,773 2.8 %
Non-owner-occupied
691,845
651,729 6.2 %
672,137 2.9 % Total real
estate-non-farm, non-residential $ 1,165,726 $ 1,114,473 4.6 % $
1,132,910 2.9 % Real estate-construction:
Residential-owner-occupied 9,134 16,285 -43.9 % 14,459 -36.8 %
Residential-builder 127,623 149,262 -14.5 % 136,658 -6.6 %
Commercial
121,667 180,544
-32.6 % 175,300
-30.6 % Total real estate-construction: $
258,424 $ 346,091 -25.3 % $ 326,417 -20.8 % Consumer 8,784 10,650
-17.5 % 8,592 2.2 % Farmland
2,574
2,456 4.8 %
2,573 0.0 % Total loans $
2,147,990 $ 2,182,395 -1.6 % $ 2,172,330 -1.1 % Less unearned
income 3,135 3,621 -13.4 % 3,311 -5.3 % Less allowance for loan
losses
45,371 56,465
-19.6 % 48,729
-6.9 % Loans, net $ 2,099,484 $ 2,122,309
-1.1 % $ 2,120,290 -1.0 % (Dollars in
thousands) As of March 31, 2012
Residential, Acquisition,
Development and Construction
By County/Jurisdiction of
Origination:
Total Outstandings Percentage of Total Non-accrual
Loans
Non-accruals
as a % of Outstandings
Net charge-offs
as a % of Outstandings
District of Columbia $ 6,545 4.8 % $ -- -- --
Montgomery, MD -- -- -- -- -- Prince Georges, MD 12,493 9.1 % 6,194
4.5 % 1.1 % Other Counties in MD 3,883 2.8 % 203 0.1 % --
Arlington/Alexandria, VA 29,058 21.2 % -- -- -- Fairfax, VA 31,276
22.9 % -- -- 0.2 % Culpeper/Fauquier, VA 678 0.5 % 200 0.1 % --
Frederick, VA 2,288 1.7 % 2,288 1.7 % 1.1 % Loudoun, VA 15,693 11.5
% 574 0.4 % -- Prince William, VA 8,679 6.3 % -- -- --
Spotsylvania, VA 174 0.1 % -- -- -- Stafford, VA 20,939 15.3 %
2,664 1.9 % -- Other Counties in VA 1,995 1.5 % -- -- -- Outside
VA, D.C. & MD
3,055 2.2
% -- --
-- $ 136,757 100.0 % $ 12,122 8.9 % 2.4 %
(Dollars in thousands) As of March 31, 2012
Commercial, Acquisition, Development and Construction
By County/Jurisdiction of
Origination:
Total Outstandings Percentage of Total Non-accrual
Loans
Non-accruals
as a % of Outstandings
Net charge-offs
as a % of Outstandings
District of Columbia $ 797 0.7 % $ -- -- --
Montgomery, MD 1,862 1.5 % -- -- -- Prince Georges, MD 12,489 10.3
% -- -- -- Other Counties in MD 2,170 1.8 % -- -- --
Arlington/Alexandria, VA 6,799 5.6 % 641 0.5 % -- Fairfax, VA 6,347
5.2 % 2,793 2.3 % -- Culpeper/Fauquier, VA 3,049 2.5 % -- -- --
Frederick, VA 2,000 1.6 % -- -- -- Henrico, VA 919 0.8 % -- -- --
Loudoun, VA 11,777 9.7 % -- -- -- Prince William, VA 38,004 31.2 %
-- -- .1 % Spotsylvania, VA 1,740 1.4 % -- -- -- Stafford, VA
28,034 23.0 % 9,963 8.2 % -- Other Counties in VA 5,679 4.7 % 835
0.7 % -- Outside VA, D.C. & MD
--
0.0 % --
-- -- $ 121,667 100.0 % $
14,232 11.7 % .1 % (Dollars in thousands) As
of March 31, 2012
Non-Farm/Non-Residential
By County/Jurisdiction of
Origination:
Total Outstandings Percentage of Total Non-accrual
Loans
Non-accruals
as a % of
Outstandings
Net charge-offs
as a % of
Outstandings
District of Columbia $ 89,420 7.7 % $ -- -- --
Montgomery, MD 22,108 1.9 % -- -- -- Prince Georges, MD 64,532 5.5
% -- -- -- Other Counties in MD 53,137 4.6 % 87 0.01 % --
Arlington/Alexandria, VA 183,988 15.8 % -- -- -- Fairfax, VA
286,435 24.6 % 986 0.1 % -- Culpeper/Fauquier, VA 3,349 0.3 % -- --
-- Frederick, VA 6,344 0.5 % -- -- -- Henrico, VA 22,068 1.9 % --
-- -- Loudoun, VA 130,325 11.2 % 1,102 0.1 % -- Prince William, VA
203,580 17.5 % 909 0.1 % -- Spotsylvania, VA 18,761 1.6 % -- -- --
Stafford, VA 21,601 1.9 % -- -- -- Other Counties in VA 50,597 4.3
% -- -- 0.1 % Outside VA, D.C. & MD
9,482
0.8 % --
-- -- $ 1,165,726 100.0 % $
3,085 0.3 % 0.1 %
Of this total of $1.2 billion in non-farm/non-residential real
estate loans, approximately $87.5 million will mature in 2012,
$109.0 million in 2013 and $201.9 million in 2014.
As of March 31,
As of
(Dollars in thousands)
2012
2011
% Change 12/31/11 % Change
Investment Securities (at book value):
Available-for-sale (AFS): U.S. government agency obligations $
494,041 $ 316,868 55.9 % $523,987 -5.7 % Pooled trust preferred
securities 486 444 9.5 % 456 6.6 % Obligations of states and
political subdivisions
103,651
64,584 60.5 %
68,621 51.0 % $ 598,178 $
381,896 56.6 % $593,064 0.9 % Held-to-maturity (HTM): U.S.
government agency obligations $ -- $ 5,459 -100.0 % $ 3,763 -100.0
% Obligations of states and political subdivisions
-- 29,717 -100.0
% 28,129 -100.0
% $ -- $ 35,176 -100.0 % $ 31,892 -100.0 %
Total Investment Securities $ 598,178 $ 417,072 43.4 % $624,956
-4.3 % Virginia Commerce Bancorp, Inc. Consolidated
Balance Sheets (Dollars in thousands, except per share data) As of
March 31, (Unaudited) 2012 2011
Assets Cash and due from banks $ 33,047 $ 41,089 Investment
securities, AFS 598,178 381,896 Investment securities, HTM (fair
value: $36,226) -- 35,176 Restricted stocks, at cost 11,272 11,751
Federal funds sold -- 85,399 Interest bearing deposits in other
banks 116,000 -- Loans held-for-sale 8,164 4,650 Loans, net of
allowance for loan losses of $45,371 and $56,465 2,099,484
2,122,309 Bank premises and equipment, net 11,058 11,666 Accrued
interest receivable 9,798 10,832 Other real estate owned, net of
valuation allowance of $6,571 and $6,543 12,928 18,879 Bank owned
life insurance 14,072 14,130 Other assets 40,225
45,856 Total assets $ 2,954,226 $ 2,783,633
Liabilities and Stockholders’ Equity Deposits
Demand deposits $ 335,580 $ 290,385 Savings and interest-bearing
demand deposits 1,173,176 1,187,395 Time deposits 729,092
779,190 Total deposits $ 2,237,848 $ 2,256,970
Securities sold under agreement to repurchase and federal funds
purchased $ 315,633 $ 177,732 Other borrowed funds $ 25,000 $
25,000 Trust preferred capital notes 66,634 66,378 Accrued interest
payable 2,423 2,753 Other liabilities 10,051 1,427
Total liabilities $ 2,657,589 $ 2,530,260
Stockholders’
Equity Preferred stock, net of discount, $1.00 par value per
share, 1,000,000 shares authorized, Series A; $1,000.00 stated
value; 71,000 issued and outstanding $ 67,670 $ 65,873 Common
stock, $1.00 par value per share, 50,000,000 shares authorized,
issued and outstanding 2012, 31,809,053 including 118,946 in
unvested restricted stock issued; 2011, 29,552,737 including 38,748
in unvested restricted stock issued 31,690 29,514 Surplus 117,563
107,372 Warrants 8,520 8,520 Retained earnings 65,779 42,859
Accumulated other comprehensive income (loss), net 5,415
(765 ) Total stockholders’ equity $ 296,637 $ 253,373
Total liabilities and stockholders’
equity
$ 2,954,226 $ 2,783,633 Virginia
Commerce Bancorp, Inc. Consolidated Statements of Operations
(Dollars in thousands except per share
data)
(Unaudited) Three Months Ended March 31, 2012
2011
Interest and dividend income:
Interest and fees on loans $ 30,621 $ 31,923 Interest
and dividends on investment securities: Taxable 2,644 2,861
Tax-exempt 588 592 Dividends on restricted stocks 101 96 Interest
on federal funds sold -- 45 Interest on deposits in other banks
51 -- Total interest and
dividend income $ 34,005 $ 35,517
Interest
expense: Deposits $ 4,942 $ 7,023 Securities sold under
agreement to repurchase and federal funds purchased 1,037 934 Other
borrowed funds 269 266 Trust preferred capital notes 978
1,111 Total interest expense $ 7,226
$ 9,334
Net interest income $ 26,779 $
26,183 Provision for loan losses 5,994
5,843 Net interest income after provision for loan losses $
20,785 $ 20,340
Non-interest income:
Service charges and other fees $ 881 $ 792 Non-deposit investment
services commissions 252 253 Fees and net gains on loans
held-for-sale 1,001 521 Gain on sale of securities 2,592 503
Impairment loss on securities -- (732 ) Bank owned life insurance
55 62 Other 168 77 Total
non-interest income $ 4,949 $ 1,476
Non-interest expense: Salaries and employee benefits $ 7,785
$ 6,659 Occupancy expense 2,421 2,470 FDIC insurance 995 1,289 Loss
on other real estate owned 826 156 Franchise tax expense 750 772
Data processing expense 653 655 Other operating expense
3,197 2,449 Total non-interest expense
$ 16,627 $ 14,450 Income before taxes $ 9,107
$ 7,366 Provision for income taxes 2,965
2,400
Net income $ 6,142 $ 4,966
Effective dividend on preferred stock $ 1,363
$ 1,315
Net income available to common stockholders $
4,779 $ 3,651 Earnings per common share, basic $ 0.15 $ 0.13
Earnings per common share, diluted $ 0.14 $ 0.12
Virginia Commerce Bancorp, Inc.
Consolidated Average Balances, Yields, and Rates Three Months Ended
March 31, (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) $ 604,991 $ 3,232 2.31 % $ 406,103 $ 3,453 3.59 %
Restricted stock 11,272 101 3.61 % 11,752 96 3.31 % Loans, net of
unearned income (2) 2,175,016 30,621 5.67 % 2,203,117 31,923 5.89 %
Interest-bearing deposits in other banks 76,384 51 0.27 % 388 --
0.13 % Federal funds sold -- -- --
67,622 45 0.27 %
Total
interest-earning assets $ 2,867,663 $ 34,005 4.82 % $ 2,688,982
$ 35,517 5.39 % Other assets 69,052 84,679
Total
Assets $ 2,936,715 $ 2,773,661
Liabilities and
Stockholders’ Equity Interest-bearing deposits: NOW accounts $
326,990 $ 298 0.37 % $ 321,564 $ 653 0.82 % Money market accounts
215,936 235 0.44 % 177,183 469 1.07 % Savings accounts 628,298 772
0.49 % 692,647 1,916 1.12 % Time deposits 760,745
3,637 1.92 % 783,462 3,985
2.06 % Total interest-bearing deposits $ 1,931,969 $ 4,942
1.03 % $ 1,974,856 $ 7,023 1.44 % Securities sold under agreement
to repurchase and federal funds purchased 279,803 1,037 1.49 %
166,272 934 2.28 % Other borrowed funds 25,000 269 4.25 % 25,000
266 4.25 % Trust preferred capital notes 66,602
978 5.81 % 66,346 1,111
6.70 %
Total interest-bearing liabilities $ 2,303,374 $
7,226 1.26 % $ 2,232,474 $ 9,334 1.70 % Demand deposits and other
liabilities 341,380 292,094
Total liabilities
$ 2,644,754 $ 2,524,568 Stockholders’ equity 291,961
249,093
Total liabilities and stockholders’ equity $
2,936,715 $ 2,773,661 Interest rate spread 3.56 % 3.69 % Net
interest income and margin $ 26,779 3.81 % $ 26,183 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 $1.2 million and $687 thousand for the
three months ended March 31, 2012 and 2011, respectively.
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