GLOUCESTER, Va., April 29, 2013 /PRNewswire/ --Colonial Virginia Bank (OTCBB: CNVB) ("the Bank"), today reported net income of 164,506 after taxes, or $0.27 per share, for the quarter ended March 31, 2013, compared to a net loss of ($151,978), or ($0.25) per share assuming dilution, for the same period in 2012. Pre-tax results were $232,606 for the current quarter compared to a net loss of ($248,978) for the same period in 2012. Return on average assets ("ROAA") improved to 0.59% for the current quarter compared to (0.46%) for March 31, 2012. The current quarter also compared favorably to the quarter-ended December 31, 2012, which reflected after tax net income of $122,654, or $0.20 per share and 0.43% ROAA. Earnings performance from core operations has begun to reflect improved stability after several quarters of volatile effects of the economic debacle of the past few years. The improvement is the result of the management and resolution of many problem loans after the years of economic collapse.
The earnings shifts above reflect certain anomalies as indicated in a gain on sale of non-performing assets of $9,500 in the current quarter compared to a loss of ($351,000) from write-downs on carrying values of foreclosed properties for the same quarter in 2012 and ($222,076) in the quarter-ended December 31, 2012. The December amount was the result of the write-down of bank premises transferred to other real estate owned ("OREO") at the closing of the New Kent branch office.
The Bank relies primarily on net interest income (interest income on loans and investment minus interest expense on deposits and borrowings) for its overall net income. Net interest income for the quarter-ended March 31, 2013 was $1,102,690, compared to $1,202,696 for the same period in 2012. The decline was associated with the shrinkage of average earning assets, as well as declining yields in the bond market negatively affecting the Bank's investment portfolio. The Bank continues its aggressive posture of reducing its cost of funds, specifically interest bearing deposits. The average rate on interest-bearing liabilities during the first quarter of this year was 0.66%, down from 0.89% for the first quarter of 2012, and a continued reduction from an average rate of 0.71% for the fourth quarter of 2012. Average yield on earning assets reflected a decrease from 5.06% at March 31, 2012 to 4.93% at March 31, 2013, due primarily to the decreased yield in the bond portfolio. The net interest margin remained relatively stable at 4.33% for the first quarter of 2013, compared to 4.27% for the same period in 2012, and 4.34% for the fourth quarter of 2012.
Non-interest income (loss) for the quarter ended March 31, 2013 was $106,217, compared to ($243,199) for the quarter ended March 31, 2012 and ($110,555) for the quarter ended December 31, 2012. The two quarters reflecting losses are due to the write-downs discussed above. Total non-interest expense was $941,301 compared to $863,788 and $1,045,850 for the fourth quarter and first quarter of 2012, respectively. Reduced personnel expense accounted for the majority of the decrease year over year, reflecting a drop in the number of full-time equivalent employees ("FTEs") when compared to the first quarter of 2012, associated with the closing of the New Kent Office. Loan loss provisions for the quarter were $35,000, up from $20,000 in the previous quarter but appreciably less than the $162,625 in provision expense recorded in the same period of last year. Sequential quarter decrease in the Loan Loss Reserves to Nonperforming Loans ratio (89.51% at December 31, 2012, compared to 60.60% at March 31, 2013) was due primarily to the change of three loans totaling $962,956 to nonaccrual status as of March 31, 2013. The change in status was prompted by either a missed principal payment (even if interest was paid) or some other form of non-compliance with original loan terms. Impairment exposure for potential loss was performed and reserves are considered adequate.
Total assets as of March 31, 2013 were $117.9 million, virtually unchanged from year-end but representing a decline of 6.1% from March 2012. Total securities of $17.2 million increased 12.9% during the quarter but remain 11.3% lower than a year ago. Gross loans decreased 2.5% for the quarter and 6.7% from last March to $77.1 million. Total deposits declined 0.1% from year end and 5.5% from March of last year to $102.6 million. FHLB borrowings at quarter end totaled $1.5 million, unchanged from the prior quarter but down from $4.0 million at the end of the first quarter of 2012. Total capital increased 1.2% from December 2012 and 5.0% from March 2012 to $12.0 million.
Bob Bailey, President and CEO, stated, "We are pleased to report our fourth consecutive quarterly profit. This has been achieved by reducing expenses and stabilizing credit related costs. Prudent balance sheet management has allowed us to improve capital ratios and reduce interest expense while we wait for loan demand to accelerate. Non-performing asset ("NPA") levels have risen over the last several quarters due to the accounting treatment required after our New Kent branch closing and the change of several loans to non-accrual status. Closings scheduled this quarter on foreclosed properties under contract will reduce NPAs unless new problem assets are identified. There are still a number of borrowers experiencing financial difficulties but we continue to seek mutually beneficial resolutions whenever possible. In addition to our concern over lack of quality loan opportunities, we have been monitoring the impact of sequestration and strategizing over how best to meet the challenge of a burdensome regulatory environment."
The Bank operates two full service retail bank offices in Gloucester County, Virginia and a Loan Production Office ("LPO") in York County. The Bank previously offered mortgage services through Colonial Virginia Mortgage, LLC ("the mortgage company"), a 50% owned subsidiary joint with Johnson Mortgage Company, LLC ("JMC"). Due to the lack of volume within the Bank's current geographical footprint, combined with the continued slow real estate market relative to sales, this operation proved to be less than a good fit for the Bank's overall strategic plan and the decision was made to cease mortgage company operations. All loans in progress were closed and sold as of March 31, 2013 and the LLC is currently inactive.
The Bank's stock is listed for trading on the Over the Counter Bulletin Board (OTCBB) under the symbol CNVB. The bank's primary market maker is Davenport & Company LLC, Richmond, VA.
Additional information regarding the bank's products and services, as well as access to its regulatory filings, are available on the bank's web site at http://www.colonialvabank.com.
Use of Certain Non-GAAP Financial Measures. In addition to results presented in accordance with United States generally accepted accounting principles (GAAP), this earnings release includes certain non-GAAP financial measures, which are reconciled to their equivalent GAAP financial measures below. Management believes these non-GAAP financial measures provide information useful to investors in understanding the corporation's performance trends and facilitate comparisons with its peers.
Although the corporation's management believes the non-GAAP financial measures presented in this earnings release enhance investors' understandings of its performance, these non-GAAP financial measures should not be considered an alternative to GAAP-basis financial statements.
Forward-Looking Statements. The statements contained in this press release that are not historical facts may constitute "forward-looking statements" as defined by the federal securities laws. These statements may address issues that involve estimates and assumptions made by Management; risks and uncertainties, and actual results could differ materially from historical results or those anticipated by such statements. Factors that could have a material adverse effect on the operations and future prospects of the corporation include, but are not limited to, changes in: (1) interest rates, (2) general economic conditions, (3) demand for loan products, (4) the legislative/regulatory climate, (5) monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury and the Federal Reserve Board, (6) the quality or composition of the loan or investment portfolios, (7) deposit flows, (8) competition, (9) demand for financial services in the Bank's market area, (10) technology, (11) reliance on third parties for key services, and (12) accounting principles, policies and guidelines. These risks and uncertainties should be considered in evaluating the forward-looking statements contained herein, and readers are cautioned not to place undue reliance on such statements, which speak only as of their dates.
Balance Sheet ($) | Y-Y | Q-Q | |||
2013 Q1 | 2012 Q1 | Ch (%) | 2012 Q4 | Ch (%) | |
Loans Held for Investment, before Reserves | 77,105,184 | 82,594,353 | (6.65) | 79,116,328 | (2.54) |
Loan Loss Reserve | 2,002,226 | 2,125,706 | (5.81) | 2,079,051 | (3.70) |
Net Loans Receivable | 75,102,959 | 80,468,647 | (6.67) | 77,037,277 | (2.51) |
Total Assets | 117,857,701 | 125,569,806 | (6.14) | 117,864,706 | (0.01) |
Deposits | 102,586,670 | 108,584,235 | (5.52) | 102,680,780 | (0.09) |
Common Equity | 11,975,031 | 11,409,303 | 4.96 | 11,836,517 | 1.17 |
Total Shareholders' Equity | 11,975,031 | 11,409,303 | 4.96 | 11,836,517 | 1.17 |
Shares Outstanding (actual) | 610,175 | 610,175 | 0.00 | 610,175 | 0.00 |
Income Statement ($) | Y-Y | Q-Q | |||
2013 Q1 | 2012 Q1 | Ch (%) | 2012 Q4 | Ch (%) | |
Net Interest Income | 1,102,691 | 1,202,696 | (8.32) | 1,139,001 | (3.19) |
Provision for Loan Losses | 35,000 | 162,625 | (78.48) | 20,000 | 75.00 |
Noninterest Income (Loss) | 106,216 | (243,199) | 143.67 | (110,555) | 196.08 |
Noninterest Expense | 941,301 | 1,045,850 | (10.00) | 863,788 | 8.97 |
Net Income (Loss) Before Taxes | 232,606 | (248,978) | 193.42 | 144,658 | 60.80 |
Income Tax Provision (Benefit) | 68,100 | (97,000) | 170.21 | 22,004 | 209.49 |
Net Income (Loss) | 164,506 | (151,978) | 208.24 | 122,654 | 34.12 |
Per Share Items ($) | Y-Y | Q-Q | |||
2013 Q1 | 2012 Q1 | Ch (%) | 2012 Q4 | Ch (%) | |
Book Value Per Share | 19.63 | 18.70 | 4.96 | 19.40 | 1.17 |
Diluted Earnings (Loss) Per Share | 0.27 | (0.25) | 208.00 | 0.20 | 35.00 |
Dividends Declared | 0.00 | 0.00 | -- | 0.00 | -- |
Performance Ratios (%) | Y-Y | Q-Q | |||
2013 Q1 | 2012 Q1 | Ch (bp) | 2012 Q4 | Ch (bp) | |
ROAA | 0.59 | (0.46) | 105 | 0.43 | 16 |
ROAE | 5.79 | (5.10) | 1,089 | 4.29 | 150 |
Net Interest Margin | 4.33 | 4.27 | 6 | 4.34 | (1) |
Loans / Deposits | 75.16 | 76.06 | (90) | 77.05 | (189) |
Efficiency Ratio | 72.66 | 103.12 | (3,046) | 81.52 | (886) |
Balance Sheet Ratios (%) | Y-Y | Q-Q | |||
2013 Q1 | 2012 Q1 | Ch (bp) | 2012 Q4 | Ch (bp) | |
Tangible Equity / Tangible Assets | 10.16 | 9.09 | 107 | 10.04 | 12 |
Equity / Assets | 10.16 | 9.09 | 107 | 10.04 | 12 |
Asset Quality Ratios (%) | Y-Y | Q-Q | |||
2013 Q1 | 2012 Q1 | Ch (bp) | 2012 Q4 | Ch (bp) | |
Nonperforming Assets / Assets | 4.63 | 2.25 | 238 | 3.91 | 72 |
Loan Loss Reserves / Gross Loans | 2.59 | 2.57 | 2 | 2.62 | (3) |
Loan Loss Reserves / Nonperforming Loans | 60.60 | 102.28 | (4,168) | 89.51 | (2,891) |
Net Charge-offs / Avg Loans | 0.58 | 1.02 | (44) | 0.49 | 9 |
Regulatory Capital Ratios (%) | Y-Y | Q-Q | |||
2013 Q1 | 2012 Q1 | Ch (bp) | 2012 Q4 | Ch (bp) | |
Tier 1 Capital Ratio | 14.22 | 12.69 | 153 | 13.75 | 47 |
*Performance Ratios are calculated on a fully taxable equivalent basis assuming a federal tax rate of 34%. | |||||
SOURCE Colonial Virginia Bank
