Virginia Commerce Bancorp (VCBI, Financial) filed Quarterly Report for the period ended 2010-03-31.
Virginia Commerce Bancorp has a market cap of $179.65 million; its shares were traded at around $6.67 with and P/S ratio of 1.23. VCBI is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Total assets increased $77.7 million, or 2.8%, from $2.73 billion at December 31, 2009, to $2.80 billion at March 31, 2010, as total deposits grew $70.7 million, or 3.2%, from $2.23 billion to $2.30 billion. Loans, net of allowance for loan losses, were down $6.9 million, or 0.3%, with non-farm, non-residential real estate loans down $1.9 million, construction loans down $6.0 million, one-to-four family residential real estate loans up $6.6 million, and commercial loans down $14.2 million. Loan production for the quarter was negatively impacted by lower economic activity and demand in both the business and consumer sectors, a reallocation of lending personnel to problem loan identification and resolution and a strategic decision to moderate overall loan growth, restrict acquisition, development and construction lending and focus on deposit generation and non-credit products. Lending efforts are being focused on building greater market share in commercial and industrial lending, especially in sectors forecast for growth, such as government contract lending and select service industries, with strategic hiring, marketing campaigns and calling efforts.
Total deposit growth of $70.7 million included a slight decrease in demand deposits of $7.9 million, or 3.3%, from $239.6 million at December 31, 2009, to $231.7 million at March 31, 2010, an increase in interest-bearing demand deposits of $103.1 million, or 10.5%, and a decrease in time deposits of $24.6 million, or 2.4%. The majority of the Banks deposits are attracted from individuals and businesses in the Northern Virginia and the Metropolitan Washington, D.C. area. The increases in interest-bearing demand deposits were due primarily to success with the Companys MEGA Savings and MEGA Checking account products as well as its Premier Interest Checking for non-profits. The declines in time deposits are reflective of lower loan volume, requiring lower levels of funding, and strategic pricing of certificates of deposits relative to both the competitive market and the Companys pricing on interest-bearing transaction accounts. The proportionate share of time deposits to total deposits has declined from 67.2% at year-end 2008, to 45.1% at December 31, 2009, and to 42.6% as of March 31, 2010. Time deposits are expected to decrease below 40% by the end of 2010. Brokered certificates of deposit represent $80.1 million of total time deposits, or 3.5% of total deposits, at March 31, 2010.
As noted, for the three months ended March 31, 2010, the Company recorded net income to common stockholders of $3.2 million compared to a loss of $3.2 million for the three months ended March 31, 2009, as net interest income increased $4.1 million, or 19.6%, non-interest income decreased $2.1 million with a $918 thousand loss on OREO and an $851 thousand impairment loss on securities, while non-interest expense rose $766 thousand, or 5.9% and provisions for loan losses were down $9.2 million. The Companys return on average assets and return on average equity were 0.65% and 8.16% for the three months ended March 31, 2010, compared to a negative 0.35% and 3.86% for the same period in 2009.
Stockholders equity increased $5.4 million, or 2.5%, from $218.9 million at December 31, 2009, to $224.3 million at March 31, 2010, with net income to common stockholders of $3.2 million and an $1.3 million increase in other comprehensive income related to the investment securities portfolio, and $469 thousand in proceeds and tax benefits related to the exercise of options by company directors and officers, and stock option expense credits. As a result of these changes and a lower level of risk-weighted assets, the Companys Tier 1 Capital ratio increased from 11.48% at December 31, 2009, to 11.91% at March 31, 2010, and its total qualifying capital ratio increased from 12.73% to 13.16%. The Banks ratios increased by similar levels.
Provisions for loan losses were $4.2 million for the three months ended March 31, 2010, compared to $13.4 million in the same period in 2009, with net charge-offs of $7.0 million in the first quarter versus $12.4 million for the three months ended March 31, 2009. Despite a sequential increase in non-performing assets of $10.7 million and an increase in troubled debt restructurings of $9.1 million, the total allowance for loan losses declined by $2.7 million from 2.86% of total loans at December 31, 2009, to 2.75% at March 31, 2010. This decline of $2.7 million in the allowance reflected the charge-off of $5.8 million in specific reserves that were part of the allowance as of December 31, 2009, the recovery of $548 thousand in prior period charge-offs, specific reserves added for additions to impaired loans of $5.4 million, and a decline of $2.3 million in general reserves. The decline in the general reserves was due to a 20 basis point decrease in our qualitative factors on commercial real estate loans and commercial construction loans with improvement in local economic conditions and delinquency levels in those portfolios, as reflected in the decline in commercial real estate loans 30 to 89 days past due from $22.2 million at September 30, 2009, to $7.5 million at March 31, 2010, and no delinquencies in our commercial construction loan portfolio. See Risk Elements and Non-Performing Assets later in this discussion for more information on non-performing assets and loans 90 + days past due and other impaired loans.
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Virginia Commerce Bancorp has a market cap of $179.65 million; its shares were traded at around $6.67 with and P/S ratio of 1.23. VCBI is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
For the three months ended March 31, 2010, the Company recorded net income of $4.5 million. After an effective dividend of $1.3 million to the Treasury on preferred stock, the Company reported net income to common stockholders of $3.2 million, or $0.11 per diluted common share, compared to a loss of $3.2 million, or $0.12 per diluted common share in the first quarter of 2009. The year-over-year earnings improvement was largely attributable to a 68% decrease in loan loss provisions from $13.4 million to $4.2 million, and a $4.1 million increase in net interest income. Earnings for the quarter were also impacted by a $918 thousand loss on OREO and an impairment loss on securities of $851 thousand. Excluding taxes, loan loss provisions and the losses on OREO owned and securities, core operating earnings for the three months ended March 31, 2010, of $12.5 million were up $2.9 million, or 30.3%, compared to $9.6 million for the same period in 2009.Total assets increased $77.7 million, or 2.8%, from $2.73 billion at December 31, 2009, to $2.80 billion at March 31, 2010, as total deposits grew $70.7 million, or 3.2%, from $2.23 billion to $2.30 billion. Loans, net of allowance for loan losses, were down $6.9 million, or 0.3%, with non-farm, non-residential real estate loans down $1.9 million, construction loans down $6.0 million, one-to-four family residential real estate loans up $6.6 million, and commercial loans down $14.2 million. Loan production for the quarter was negatively impacted by lower economic activity and demand in both the business and consumer sectors, a reallocation of lending personnel to problem loan identification and resolution and a strategic decision to moderate overall loan growth, restrict acquisition, development and construction lending and focus on deposit generation and non-credit products. Lending efforts are being focused on building greater market share in commercial and industrial lending, especially in sectors forecast for growth, such as government contract lending and select service industries, with strategic hiring, marketing campaigns and calling efforts.
Total deposit growth of $70.7 million included a slight decrease in demand deposits of $7.9 million, or 3.3%, from $239.6 million at December 31, 2009, to $231.7 million at March 31, 2010, an increase in interest-bearing demand deposits of $103.1 million, or 10.5%, and a decrease in time deposits of $24.6 million, or 2.4%. The majority of the Banks deposits are attracted from individuals and businesses in the Northern Virginia and the Metropolitan Washington, D.C. area. The increases in interest-bearing demand deposits were due primarily to success with the Companys MEGA Savings and MEGA Checking account products as well as its Premier Interest Checking for non-profits. The declines in time deposits are reflective of lower loan volume, requiring lower levels of funding, and strategic pricing of certificates of deposits relative to both the competitive market and the Companys pricing on interest-bearing transaction accounts. The proportionate share of time deposits to total deposits has declined from 67.2% at year-end 2008, to 45.1% at December 31, 2009, and to 42.6% as of March 31, 2010. Time deposits are expected to decrease below 40% by the end of 2010. Brokered certificates of deposit represent $80.1 million of total time deposits, or 3.5% of total deposits, at March 31, 2010.
As noted, for the three months ended March 31, 2010, the Company recorded net income to common stockholders of $3.2 million compared to a loss of $3.2 million for the three months ended March 31, 2009, as net interest income increased $4.1 million, or 19.6%, non-interest income decreased $2.1 million with a $918 thousand loss on OREO and an $851 thousand impairment loss on securities, while non-interest expense rose $766 thousand, or 5.9% and provisions for loan losses were down $9.2 million. The Companys return on average assets and return on average equity were 0.65% and 8.16% for the three months ended March 31, 2010, compared to a negative 0.35% and 3.86% for the same period in 2009.
Stockholders equity increased $5.4 million, or 2.5%, from $218.9 million at December 31, 2009, to $224.3 million at March 31, 2010, with net income to common stockholders of $3.2 million and an $1.3 million increase in other comprehensive income related to the investment securities portfolio, and $469 thousand in proceeds and tax benefits related to the exercise of options by company directors and officers, and stock option expense credits. As a result of these changes and a lower level of risk-weighted assets, the Companys Tier 1 Capital ratio increased from 11.48% at December 31, 2009, to 11.91% at March 31, 2010, and its total qualifying capital ratio increased from 12.73% to 13.16%. The Banks ratios increased by similar levels.
Provisions for loan losses were $4.2 million for the three months ended March 31, 2010, compared to $13.4 million in the same period in 2009, with net charge-offs of $7.0 million in the first quarter versus $12.4 million for the three months ended March 31, 2009. Despite a sequential increase in non-performing assets of $10.7 million and an increase in troubled debt restructurings of $9.1 million, the total allowance for loan losses declined by $2.7 million from 2.86% of total loans at December 31, 2009, to 2.75% at March 31, 2010. This decline of $2.7 million in the allowance reflected the charge-off of $5.8 million in specific reserves that were part of the allowance as of December 31, 2009, the recovery of $548 thousand in prior period charge-offs, specific reserves added for additions to impaired loans of $5.4 million, and a decline of $2.3 million in general reserves. The decline in the general reserves was due to a 20 basis point decrease in our qualitative factors on commercial real estate loans and commercial construction loans with improvement in local economic conditions and delinquency levels in those portfolios, as reflected in the decline in commercial real estate loans 30 to 89 days past due from $22.2 million at September 30, 2009, to $7.5 million at March 31, 2010, and no delinquencies in our commercial construction loan portfolio. See Risk Elements and Non-Performing Assets later in this discussion for more information on non-performing assets and loans 90 + days past due and other impaired loans.
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