MIDLOTHIAN, Va., March 13, 2009 (GLOBE NEWSWIRE) -- Bank of Virginia (Nasdaq:BOVA) (www.bankofva.com) reported financial results for the fourth quarter and year ended 2008. The net loss for the fourth quarter of 2008 was $1.4 million and diluted loss per common share of $0.46. The primary reason for the loss was Management's decision to significantly increase allowance for loan losses in light of the continued deterioration of the economy. The net loss for the year-end was $1.3 million and diluted loss per common share of $0.43.
As stated above, one of the major factors of the Bank's net loss for the fourth quarter and the year was the increased provision for loan loss. The voluntary contribution to the loan loss reserve resulted in the largest quarterly provision for loan losses ever recorded by the Bank in the amount of $1.5 million. Because of the steady downward trend of our economy, the Bank's management team made a decision to increase its loan loss reserve in the fourth quarter. Frank Bell, President and Chief Executive Officer noted, "We are not immune to the effects of a slowing economy as 2008 proved to be one of the most difficult and unpredictable years in the history of the financial services industry.
The economic recession is negatively impacting all those in the financial sector; however as a local community bank, we did not participate in the unsound lending practices that have troubled many financial institutions during the past year."
The provision for loan losses in the fourth quarter was $1.5 million as compared to $106 thousand in the prior quarter and $98 thousand in the fourth quarter of 2007. This results in a loan loss reserve to total loans of $2.9 million, which as a ratio to total loans is 1.89%, an increase from the prior quarter's ratio of approximately 1%.
Another significant factor in the quarter was continued compression of the net interest margin. The net interest margin was 2.89% during the quarter, which is one basis points less than the prior quarter and 51 basis points less than the fourth quarter of 2007. This contraction is driven by the rapid decline in interest rates quickly affecting asset yields while market rates on deposits decreased at a slower pace.
Although the Company did report a loss for the quarter and the year, the balance sheet showed growth driven by its loan portfolio. At year-end 2008, total assets equaled $203.7 million, up $19.7 million from December 31, 2007. Net loans increased from $130.8 million in 2007 to $153.0 million in 2008, representing a 17% increase for the year. Deposit balances grew steadily in support of loan demand and were $171.0 million at December 31, 2008 in comparison to $154.9 million at December 31, 2007, a 10.4% increase.
Frank Bell, President and Chief Executive Officer, said, "I am very pleased with the dedication and hard work of our officers and staff during these challenging times. Our Company is not involved in the sub-prime market, so we are not directly experiencing any of the negative returns associated with that business. Our loan portfolio continues to perform well and the Bank continues to be "well capitalized," the highest regulatory capital level.
In January 2009, Bank of Virginia marked its five-year anniversary of operations. Also noteworthy, on February 19, 2009, Bank of Virginia officially broke ground on a 3000-square-foot branch office in Chesterfield County, Virginia, which will be a relocation of an existing retail storefront branch. The expected date of opening is late Summer 2009. Management feels positive that with the existing shareholder and customer base that surrounds the office, it will prove to be a positive addition to Bank of Virginia. Mr. Bell said, "I hope that the community will see our new full service branch as a demonstration of stability and our commitment to the community."
Bank of Virginia operates five branch offices in Chesterfield County and Henrico County in Virginia. Bank of Virginia common stock is traded on the NASDAQ stock market under the quotation symbol "BOVA." Additional investor-related information can be found on the Internet at www.bankofva.com.
DISCLAIMER
This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Bank's periodic filings with the Board of Governors of the Federal Reserve System, including the Bank's annual report on Form 10-K as filed with the Board of Governors of the Federal Reserve. Pursuant to the Private Securities Litigation Reform Act of 1995, the Bank does not undertake to update forward-looking statements contained within this news release.
BANK OF VIRGINIA
Statements of Operations
Three Months Ended Twelve Months Ended
------------------------ ------------------------
December 31, December 31,
2008 2007 2008 2007
----------- ----------- ----------- -----------
Interest
Income:
Interest and fees
on loans $ 2,596,383 $ 2,617,830 $10,220,810 $ 9,526,583
Investment
securities 505,034 461,257 2,141,546 1,494,000
Interest on
federal funds
sold and
deposits with
banks 826 88,821 65,115 359,886
----------- ----------- ----------- -----------
Total interest
income 3,102,243 3,167,908 12,427,471 11,380,469
----------- ----------- ----------- -----------
Interest
Expense:
Interest on
deposits 1,525,788 1,610,466 6,432,811 5,868,301
Interest on fed
funds purchased
and FHLB
borrowings 137,565 113,594 533,058 320,661
----------- ----------- ----------- -----------
Total interest
expense 1,663,353 1,724,060 6,965,869 6,188,962
----------- ----------- ----------- -----------
Net interest
income 1,438,890 1,443,848 5,461,602 5,191,507
Provision for
loan losses 1,515,500 98,365 1,764,325 345,534
----------- ----------- ----------- -----------
Net interest
income after
provision for
loan losses (76,610) 1,345,483 3,697,277 4,845,973
----------- ----------- ----------- -----------
Non-interest
Income:
Service charges on
deposit accounts 38,405 37,603 206,456 121,619
Net gain on
available for
sale securities 37,628 11,316 186,697 11,776
Other fee income 40,551 25,413 140,318 86,057
----------- ----------- ----------- -----------
Total
non-interest
income 116,584 74,332 533,471 219,452
----------- ----------- ----------- -----------
Non-interest
Expense:
Salaries and
employee benefits 769,468 743,955 3,110,236 2,709,305
Occupancy expense 105,902 78,698 410,422 319,740
Equipment expense 81,908 52,298 318,098 208,382
Data processing 148,946 97,890 457,809 351,517
Marketing expense 9,214 40,870 171,093 144,876
Legal and
professional fees 86,812 38,962 239,444 146,791
Other operating
expenses 237,092 273,199 838,241 678,318
----------- ----------- ----------- -----------
Total
non-interest
expense 1,439,342 1,325,872 5,545,343 4,558,929
----------- ----------- ----------- -----------
Net (Loss)
income $(1,399,368) $ 93,943 $(1,314,595) $ 506,496
=========== =========== =========== ===========
(Loss) Income per
share, basic and
diluted $ (0.46) $ 0.03 $ (0.43) $ 0.17
=========== =========== =========== ===========
Weighted Average
Shares
Outstanding:
Basic 3,031,866 3,031,866 3,031,866 3,031,866
=========== =========== =========== ===========
Diluted 3,031,866 3,031,866 3,031,866 3,031,866
=========== =========== =========== ===========
At period end:
Book value
per share 5.38 5.94
Market value
per share 3.40 6.00
BANK OF VIRGINIA
Balance Sheets
December 31, December 31,
2008 2007
Audited Audited
------------- -------------
Assets
Cash and due from banks $ 2,608,500 $ 4,183,359
Federal funds sold and interest-bearing
balances with banks 42,194 4,771,376
------------- -------------
2,650,694 8,954,735
Securities available for sale, at
fair market value 41,008,725 37,641,272
Loans, net of allowance for loan losses
of $2,942,988 in 2008 and
$1,276,726 in 2007 152,962,046 130,805,447
Premises and equipment, net 5,688,585 5,532,009
Accrued interest receivable 864,630 857,853
Other assets 537,239 217,311
------------- -------------
Total assets $ 203,711,919 $ 184,008,627
============= =============
Liabilities
Deposits:
Noninterest-bearing $ 12,483,762 $ 13,020,632
Savings and interest-bearing demand 18,770,259 17,122,793
Time, $100,000 and over 55,939,332 46,155,151
Other time 83,818,330 78,586,170
------------- -------------
Total deposits 171,011,683 154,884,746
Accrued expenses and other liabilities 1,208,215 1,119,459
FHLB borrowings and other indebtedness 15,176,000 10,000,000
------------- -------------
Total liabilities 187,395,898 166,004,205
------------- -------------
Stockholders' Equity
Preferred stock, $5 par value,
5,000,000 shares authorized,
none issued -- --
Common stock, $2.50 par value,
40,000,000 shares authorized,
3,031,866 shares issued and
outstanding in 2008 and 2007,
respectively 7,579,665 7,579,665
Additional paid-in capital 14,705,508 14,693,218
Retained deficit (5,913,941) (4,599,347)
Accumulated other comprehensive
(loss) income (55,211) 330,886
------------- -------------
Total stockholders' equity 16,316,021 18,004,422
------------- -------------
Total liabilities and
stockholders' equity $ 203,711,919 $ 184,008,627
============= =============
As of and for the Quarter Ended
Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
2008 2008 2008 2008 2007
--------- --------- --------- --------- ---------
Asset Quality
Analysis:
Allowance for
loan losses:
Beginning
balance 1,525,551 1,419,977 1,389,977 1,276,726 1,178,361
Provision 1,515,500 105,574 30,000 113,251 98,365
Charge-offs (98,063) -- -- -- --
Recoveries -- -- -- -- --
--------- --------- --------- --------- ---------
Net
charge-
offs (98,063) -- -- -- --
--------- --------- --------- --------- ---------
Ending
Balance 2,942,988 1,525,551 1,419,977 1,389,977 1,276,726
========= ========= ========= ========= =========
Nonperforming
Assets:
Nonaccrual
loans 244,273 -- -- -- --
Foreclosed
real estate 308,019 -- -- -- --
Repossessions -- -- -- -- --
Loans 90 days
or more past
due and
still
accruing 696,000 -- -- -- --
--------- --------- --------- --------- ---------
Non-
performing
assets 1,248,292 -- -- -- --
========= ========= ========= ========= =========
Allowance for
loan losses
as a percent
of loans 1.89% 1.00% 0.98% 0.97% 0.97%