BOVA Bank of Virginia (MM)

Bank of Virginia (Nasdaq:BOVA) (www.bankofva.com) today announced financial results for its fourth quarter and year ended December 31, 2009, reflecting the impact of current economic conditions.

For the three months ended December 31, 2009, the Company reported a net loss of $1.5 million and diluted loss per common share of $0.48. For the year ended December 31, 2009, the Company reported a net loss of $4.2 million and diluted loss per common share of $1.39.

In 2009, results were significantly impacted by an increase in provision for loan losses to $4.5 million for 2009 as compared to $1.8 million in 2008. The Bank's reserve for loan losses at December 31, 2009 was $5.2 million or 3.04% of total loans as compared to $2.9 million or 1.89% for year-end 2008. Additionally, results were affected by an unprecedented FDIC Deposit Insurance Fund special assessment of over $100,000. This assessment (based on asset size) was imposed on all FDIC insured institutions. The Bank also incurred significant expenses associated with improving its financial and risk management programs.

"The current economic conditions and real estate values continue to hamper financial institutions and especially smaller, community banks like Bank of Virginia. Not only have the decreased values weakened commercial credits, but this also is indirectly attributable to a special, one-time FDIC insurance premium. The combination of the aforementioned events as well as economic trends, increased fees associated with improving our risk management programs and costs associated with a core system conversion completed in third quarter 2009 that was necessary for growth, caused us to experience a net loss for 2009," said Bell.

During the fourth quarter of 2009, the Company continued to focus on the Bank's capital position. In conjunction with the current initiative to raise capital, Bank of Virginia received $4.1 million in capital at year-end 2009, making the Bank "well-capitalized" by regulatory standards. "With today's current economic conditions and resulted heightened regulatory scrutiny, having a strong capital position is critical for the success of our Bank," said Bell.

Additional highlights at December 31, 2009 and for the fourth quarter of 2009 include:

Total assets at December 31, 2009 were $221.5 million compared with $203.7 million a year ago.

Net loans were $166.3 million at December 31, 2009 compared with $153.0 million last year.

Total deposits at December 31, 2009 were $193.1 million compared with $171.0 million at December 31, 2008.

Although the Company did experience a loss for the quarter and the year, the balance sheet showed continual growth. At year-end 2009, total assets were just over $221 million, an increase of $18 million or 8.75% from year-end 2008. During 2009, the Bank consistently increased its total core deposits and loan volume. Total deposits were $193 million, up $22 million, or 13% over the year-ended 2008. At December 31, 2009, total net loans were $166 million compared to $153 million at December 31, 2008, an increase of $13 million or 8.75%.

"We are encouraged to report that during 2009 we were able to have solid growth in both core deposits and loans, considering the economic conditions that we, among many of our peers, are operating. Our focus in 2010 will be to continue with our strong business model, focusing on small businesses and individuals residing in our market area to provide them with premium financial services, technology and advice to help them prosper," Bell stated.

Also in 2009, Bank of Virginia reported completed the following achievements outlined below:

The Bank celebrated its five-year anniversary of operation with five full-service locations in Chesterfield and Henrico Counties, VA.

In the spring of 2009, Bank of Virginia was awarded the Community Impact Award by the Chesterfield Economic Development Authority for its community involvement and dedication.

The Bank relocated an existing storefront branch in August 2009 to a new 3000 square foot office in Chesterfield County, VA.

Completed a core system conversion in September 2009, moving processing and technology solutions to Fidelity National Information Services®, which was a planned strategic initiative to address technology and service enhancements and aid in future cost savings.

Bank of Virginia, a Virginia state chartered bank headquartered in Midlothian, Virginia currently operates five full-service offices in the counties of Chesterfield and Henrico, Virginia. Bank of Virginia common stock is traded on the NASDAQ stock market under the quotation symbol "BOVA". Additional investor relations 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

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

Three Months and Period Ended

Twelve Months and Period Ended

 

 

December 31,

December 31,

 

 

2009

2008

2009

2008

 

 

 

 

 

 

Interest

Income:

Interest and fees on loans

 $ 2,579,445

 $ 2,596,383

 $ 10,041,122

 $ 10,220,810

 

Investment securities

 444,384

 505,034

 2,042,383

 2,141,546

 

Interest on federal funds sold and deposits with banks

 1,417

 826

 7,019

 65,115

 

Total interest income

 3,025,246

 3,102,243

 12,090,524

 12,427,471

 

 

 

 

 

 

 

 

 

 

 

 

Interest

Expense:

Interest on deposits

 1,235,940

 1,525,788

 5,531,975

 6,432,811

 

Interest on fed funds purchased and FHLB borrowings

 112,296

 137,565

 466,038

 533,058

 

Total interest expense

 1,348,236

 1,663,353

 5,998,013

 6,965,869

 

Net interest income

 1,677,010

 1,438,890

 6,092,511

 5,461,602

 

Provision for loan losses

 1,024,951

 1,515,500

 4,483,650

 1,764,325

 

Net interest income after provision for loan losses

 652,059

 (76,610)

 1,608,861

 3,697,277

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest Income:

Service charges on deposit accounts

 45,597

 38,405

 182,040

 206,456

 

Net gain on available for sale securities

 5,994

 37,628

281,287

186,697

 

Other fee income

 29,209

 40,551

 173,651

 140,318

 

Total non-interest income

 80,800

 116,584

 636,978

 533,471

 

 

 

 

 

 

 

 

 

 

 

 

Non-interest Expense:

Salaries and employee benefits

 840,531

 769,468

 3,240,723

 3,110,236

 

Occupancy expense

 187,400

 105,902

 516,298

 410,422

 

Equipment expense

 89,578

 81,908

 260,589

 318,098

 

Data processing

 126,564

 148,946

 480,628

 457,809

 

Marketing expense

 56,835

 9,214

144,207

171,093

 

Legal and professional fees

 231,873

 86,812

351,913

239,444

 

FDIC insurance assessments

 225,043

 39,765

428,949

106,076

 

Other operating expenses

 461,274

 197,327

 1,034,958

 732,165

 

Total non-interest expenses

 2,219,098

 1,439,342

 6,458,265

 5,545,343

 

 

 

 

 

 

 

Net income (loss)

 $ (1,486,239)

 $ (1,399,368)

 $ (4,212,426)

 $ (1,314,595)

 

 

 

 

 

 

 

Income (loss) per share, basic and diluted

 $ (0.48)

 $ (0.46)

 $ (1.39)

 $ (0.43)

 

Weighted Average Shares Outstanding:

 

 

 

 

 

Basic

 3,064,909

 3,031,866

 3,040,195

 3,031,866

 

Diluted

 3,064,909

 3,031,866

 3,040,195

 3,031,866

 

At period end:

 

 

 

 

 

Book value per share

 3.78

 5.38

 

 

 

Market value per share

 3.29

 3.40

 

 

 

Tangible common equity to assets

7.76%

8.01%

 

 

BANK OF VIRGINIA

 

 

Balance Sheets

 

 

 

 

 

 

 

 

 

 December 31, 

 December 31, 

 

 

2009

2008

 

 

 Unaudited 

 Audited 

Assets

Cash and due from banks

 $ 4,596,953

 $ 2,608,500

 

Federal funds sold and interest-bearing balances with banks

 3,527,759

 42,194

 

 

 8,124,712

 2,650,694

 

Securities available for sale, at fair market value

 38,109,075

 39,474,175

 

Restricted securities

 1,475,350

 1,534,550

 

Loans, net of allowance for loan losses of $5,222,023 in 2009

 

 

 

and $2,942,988 in 2008

 166,342,222

 152,962,046

 

Premises and equipment, net

 5,630,860

 5,688,585

 

Accrued interest receivable

 849,201

 864,630

 

Other real estate owned

 578,535

 308,019

 

Other assets

 441,565

 229,220

 

 

 

 

 

Total assets

 $ 221,551,520

 $ 203,711,919

 

 

 

 

Liabilities

Deposits:

 

 

 

Noninterest-bearing

 $ 14,701,106

 $ 12,483,762

 

Savings and interest-bearing demand

 30,211,719

 18,770,259

 

Time, $100,000 and over

 60,631,093

 55,939,332

 

Other time

 87,598,774

 83,818,330

 

Total deposits

 193,142,692

 171,011,683

 

Accrued expenses and other liabilities

 1,213,562

 1,208,215

 

FHLB borrowings

 10,000,000

 15,000,000

 

Federal funds purchased

 --

 176,000

 

Total liabilities

 204,356,254

 187,395,898

 

 

 

 

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, 4,551,866

 

 

 

shares issued and outstanding in 2009 and 3,031,866

 

 

 

shares issued and outstanding in 2008

 11,379,665

 7,579,665

 

Additional paid-in capital

 14,975,103

 14,705,508

 

Retained (deficit)

 (10,126,367)

 (5,913,941)

 

Accumulated other comprehensive income (loss)

 966,865

 (55,211)

 

Total stockholders' equity

 17,195,266

 16,316,021

 

 

 

 

 

Total liabilities and stockholders' equity

 $ 221,551,520

 $ 203,711,919

BANK OF VIRGINIA

 

 

 

 

 

Selected Historical Information

 

 

 

 

 

(Unaudited)

 

 

 

 

 

As of and for the Quarter Ended

 

 

 

 

 

 

Dec. 31, 

Sept. 30, 

June 30, 

March 31, 

Dec. 31, 

 

2009

2009

2009

2009

2008

 

 

 

 

 

 

Asset Quality Analysis:

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

Beginning balance

 4,476,947

 4,690,071

 3,012,738

 2,942,988

 1,525,551

Provision

 1,024,951

 (181,575)

 3,570,525

 69,750

 1,515,500

Charge-offs

 (279,875)

 (31,549)

 (1,893,192)

 -- 

 (98,063)

Recoveries

 -- 

 -- 

 -- 

 -- 

 -- 

Net charge-offs

 (279,875)

 (31,549)

 (1,893,192)

 -- 

 (98,063)

Ending Balance

 5,222,023

 4,476,947

 4,690,071

 3,012,738

 2,942,988

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming Assets:

 

 

 

 

 

Nonaccrual loans

 6,453,472

 5,065,056

 4,541,510

 -- 

 244,273

Foreclosed real estate

 578,535

 308,019

 308,019

 308,019

 308,019

Loans 90 days or more past due and still accruing

 -- 

 -- 

 768,088

 3,197,350

 696,000

Nonperforming assets

 7,032,007

 5,373,075

 5,617,617

 3,505,369

 1,248,292

 

 

 

 

 

 

Allowance for loan losses as a percent of loans

3.04%

2.62%

2.82%

1.89%

1.89%

Non-performing assets to total assets

3.17%

2.37%

2.49%

1.58%

0.61%

CONTACT: Bank of Virginia

Kenneth P. Mulkey, Senior Vice-President

& Chief Financial Officer

804-763-1333