Eastern Virginia Bankshares Inc. Reports Operating Results (10-Q)
Eastern Virginia Bankshares Inc. has a market cap of $23.15 million; its shares were traded at around $3.88 with and P/S ratio of 0.52. The dividend yield of Eastern Virginia Bankshares Inc. stocks is 1.03%.
Highlight of Business Operations: Goodwill totaled $16.0 million at both June 30, 2010 and December 31, 2009. Based on the testing of goodwill for impairment, no impairment charges have been recorded. Core deposit intangible assets are being amortized over the expected benefit period, which ranges from 2.39 to 7.0 years. Core deposit intangibles, net of amortization, amounted to $71 thousand and $215 thousand, at June 30, 2010 and December 31, 2009, respectively, and are included in other assets. This component of our intangible assets will be fully amortized as of September 30, 2010.
The reported losses of $6.0 million and $4.6 million, respectively for the three and six months ended June 30, 2010 and the reported losses of $1.8 million and $1.0 million, respectively for the three and six months ended June 30, 2009 equate to the following performance metrics:
On a per share basis, the diluted and basic (loss) per common share (EPS) is ($1.06) and ($0.90), respectively for the three and six months ended June 30, 2010. This compares to an EPS of ($0.36) and ($0.30), respectively for the three and six months ended June 30, 2009.
Net interest income is the Companys primary source of generating income. It represents the difference between what the Company pays for deposits and borrowings and the income that can be generated by the investments in loans and marketable securities. For the second quarter of 2010, net interest income, on a fully tax equivalent basis, increased $723 thousand or approximately 8.6% from the same period of last year. For the six month period ending June 30, also on a fully tax equivalent basis, net interest income increased $2.2 million, or 13.5% between 2009 and 2010.
Lower investment security balances in 2010 caused by the write off of trust preferred securities. For the second quarter the average investment balance declined by $31 million between 2009 and 2010. For the six month period the decline in average investment balances was $12.5 million.
Lower yielding assets caused by the lagging effects of asset re-pricing following cuts in interest rates during 2008 and 2009 were a significant factor in lower total interest income. On a fully tax equivalent basis for the quarter ended June 30, 2010, total interest income declined from $14.9 million to $13.6 million, a decrease of 8.7% from the quarter ended June 30, 2009. For the six month period, total interest income declined from $29.0 million to $27.4 million, a decrease of 5.4%. For the second quarter, the yield on total earning assets declined from 5.86% to 5.43% between 2009 and 2010. For the six month period, the yield declined from 5.82% to 5.51% between 2009 and 2010. Not included in these calculations are loans that are not accruing interest which has increased from $8.7 million at June 30, 2009 to $23.1 million at June 30, 2010 and has also contributed to the overall decline in total interest income. Average loan balances rose during the period which positively affected the income figures. The comparative impact of declining loan balances that have occurred during the second quarter of 2010 due to charge-offs, principal curtailments and weak loan demand will become evident in subsequent periods.
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