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Virginia Commerce Bancorp (VCBI) filed Quarterly Report for the period ended 2011-09-30.
Virginia Commerce Bancorp has a market cap of $188.3 million; its shares were traded at around $6.33 with a P/E ratio of 9.8 and P/S ratio of 1.1.
This is the annual revenues and earnings per share of VCBI over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of VCBI.
Highlight of Business Operations:
For the three months ended September 30, 2011, the Company recorded net income of $6.6 million. After an effective dividend of $1.3 million to the U.S. Treasury on the Company’s TARP preferred stock, the Company reported net income available to common stockholders of $5.2 million, or $0.17 per diluted common share, compared to net income available to common stockholders of $5.7 million, or $0.20 per diluted common share, in the third quarter of 2010. For the nine months ended September 30, 2011, the Company reported net income available to common stockholders of $16.4 million, or $0.53 per diluted common share, compared to net income available to common stockholders of $13.2 million, or $0.46 per diluted common share, for the same period in 2010. The higher earnings reported for the three months ended September 30, 2010, were largely attributable to $1.0 million of death benefits received from bank-owned life insurance during that quarter. Earnings improvement for the nine-month period ended September 30, 2011, as compared to the same period in 2010, was attributable to lower provisions for loan losses, higher net interest margins and non-interest expense reduction.For the nine months ended September 30, 2011, total deposits increased $121.7 million, or 5.4%, from $2.25 billion at December 31, 2010, to $2.37 billion at September 30, 2011. The Company’s deposit mix improved as demand deposits increased $124.8 million or 47.1%, savings and interest-bearing demand accounts decreased $14.0 million or 1.2% and time deposits increased $10.9 million or 1.4%. Sequentially, deposits rose $115.2 million, or 5.1%, with demand deposits increasing by $96.4 million, or 32.9%, savings and interest-bearing demand accounts growing $5.3 million, or 0.5%, and time deposits increasing by $13.4 million, or 1.7%. The annual and sequential increases are impacted by a temporary influx of approximately $71.0 million in demand deposits that are expected to flow back out in the fourth quarter of 2011. The vast majority of these demand deposits that are expected to flow out during the fourth quarter of 2011 are held by a longstanding client that invests and trades in U.S. markets. Demand deposit growth remains the top deposit priority, with the increase in demand deposits (other than the previously discussed demand deposits that are earmarked for auction) due to the successful efforts of the Company’s team of eight business development officers, who are focused on acquisition and retention of commercial operating funds, treasury management services and other related cross-sales. At September 30, 2011, the Bank had no brokered certificates of deposit, down from $30.0 million at September 30, 2010.
For the three months ended September 30, 2011, the Company recorded net income to common stockholders of $5.2 million compared to net income $5.7 million for the same period in 2010 as net interest income fell $452 thousand, or 1.7%, non-interest income decreased $1.2 million, or 37.5%, non-interest expense decreased $418 thousand, or 2.7%, and provisions for loan losses were down $1.2 million, or 22.9%. The higher earnings reported for the three months ended September 30, 2010, were largely attributable to $1.0 million of death benefits received from bank-owned life insurance during that quarter. The return on average assets and return on average equity were 0.91% and 9.61% for the three months ended September 30, 2011, compared to 0.97% and 11.66% for the same period in 2010.
Net interest income is the excess of interest earned on loans and investments over the interest paid on deposits and borrowings and is the Company’s primary revenue source. Net interest income is thereby affected by overall balance sheet growth, changes in interest rates and changes in the mix of investments, loans, deposits and borrowings. Net interest income of $26.7 million for the third quarter of 2011 was down $452 thousand, or 1.7%, over the same quarter last year, due primarily to a decrease in the net interest margin from 3.96% in the third quarter of 2010 to 3.85% for the third quarter 2011. This decrease was primarily due to decreases in yields on the Company’s interest-earning assets, including a 93 basis point decrease in the yield on the Company’s investment securities portfolio. Interest expense decreased $2.0 million for the quarter ended September 30, 2011, from the same period in 2010 and decreased $6.6 million for the nine months ended September 30, 2011, compared to 2010. Reductions in interest expense partially offset the decrease in interest and fee income on loans of $2.5 million for the three-months ended September 30, 2011, as compared to the same period in 2010. Year-to-date net interest income of $79.7 million was up 1.9%, compared to $78.2 million in 2010. The increase in the net interest margin for the nine months ended September 30, 2011, compared to the same period in 2010, was primarily driven by lower deposit costs due to significant reductions in the level of time deposits, increased levels of demand deposits and lower rate interest-bearing transaction accounts. As a result, the average cost of interest-bearing deposits fell from 1.57% in the third
Construction loans at September 30, 2011, included $138.9 million in loans to commercial builders of single family residential property and $12.8 million to individuals on single family residential property, together representing 7.1% of total loans. These loans are made to a number of unrelated entities and generally have a term of twelve to eighteen months. In addition, the Company had $171.9 million of construction loans on non-residential commercial property at September 30, 2011, representing 8.0% of total loans. Total construction loans of $323.6 million include $108.4 million in land acquisition and/or development loans on residential property and $84.0 million in land acquisition and/or development loans on commercial property, together totaling $192.4 million, or 9.0% of total loans. Potential adverse developments in the Northern Virginia real estate market or economy, including substantial increases in mortgage interest rates, slower housing sales, and increased commercial property vacancy rates, could have an adverse impact on these groups of loans and the Bank’s income and financial position. At September 30, 2011, the Company had no other concentrations of loans in any one industry exceeding 10% of its total loan portfolio. An industry for this purpose is defined as a group of counterparties that are engaged in similar activities and have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions.
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