Eastern Virginia Bankshares Inc. (EVBS, Financial) filed Quarterly Report for the period ended 2012-09-30.
Eastern Virginia Bankshares Inc has a market cap of $34.9 million; its shares were traded at around $5.4 with a P/E ratio of 21.3 and P/S ratio of 0.6.
Net interest income, on a fully tax equivalent basis, decreased $275 thousand or 3.2% to $8.4 million for the three months ended September 30, 2012, down from $8.7 million for the three months ended September 30, 2011. Total average earning assets decreased $3.5 million or 0.4% from $998.8 million for the three months ended September 30, 2011 to $995.3 million for the same period of 2012. Total average interest-bearing liabilities decreased $22.0 million
Net interest income, on a fully tax equivalent basis, decreased $1.5 million or 5.5% to $25.3 million for the nine months ended September 30, 2012, down from $26.8 million for the nine months ended September 30, 2011. Total average earning assets decreased $8.0 million or 0.8% from $1.01 billion for the nine months ended September 30, 2011 to $998.1 million for the same period of 2012. Total average interest-bearing liabilities decreased $28.7 million or 3.3% from $878.9 million for the nine months ended September 30, 2011 to $850.2 million for the same period of 2012. The decrease in net interest income was driven by the change in the mix and pricing of the balance sheet components including the impact of declining loan balances, decreasing yields on the Companys loan and investment portfolios and the Companys desire to deploy excess liquidity through the expansion of its investment portfolio. The impact of these changes was partially offset by decreases to the cost of all categories of interest-bearing liabilities other than long-term borrowings and trust preferred debt. These shifts resulted in a decrease of 17 basis points in our net interest margin from 3.56% for the nine months ended September 30, 2011 to 3.39% for the same period of 2012. The percentage of average earning assets to total average assets increased slightly to 93.6% for the nine months ended September 30, 2012, as compared to 93.2% for the same period of 2011.
Noninterest income for the nine months ended September 30, 2012 was $8.0 million, an increase of $1.3 million or 19.2% over noninterest income of $6.7 million for the same period of 2011. The increase in noninterest income was primarily due to sales of available for sale securities, which generated gains of $3.5 million in the first nine months of 2012, an increase of $1.7 million or 99.8% over gains of $1.8 million in the first nine months of 2011. During the first nine months of 2012 the Company strategically adjusted the composition of its investment portfolio by reducing its holdings of tax-exempt securities in an effort to increase the Companys source of taxable income. To implement this strategy the Company sold tax-exempt securities issued by state and political subdivisions during the first nine months of 2012, many of which were in an unrealized gain position at the time of sale as a result of monetary policies of the Federal Reserve to maintain the low interest rate environment, and deployed the proceeds into taxable investment securities issued by state and political subdivisions as well as Agency mortgage-backed and Agency CMO securities. The Company will strategically evaluate opportunities to further adjust the composition of its investment portfolio through the balance of 2012. As discussed above, noninterest income for the first nine months of 2012 was also positively impacted by a $197 thousand gain on the sale of our credit card loan portfolio, while no such gains were generated in 2011.
Nonperforming assets were $19.4 million or 2.73% of total loans and other real estate owned at September 30, 2012 compared to $37.8 million or 5.09% at December 31, 2011. Although nonperforming assets began to trend downward during 2011 and decreased by $18.4 million during the first nine months of 2012, this number increased from 2007 through 2010 as a result of the continued challenging economic conditions which have significantly increased unemployment, reduced profitability of local businesses, and reduced the ability of many of our customers to keep their loans current. The sluggish economic recovery and continuing asset quality issues in the Companys loan portfolio have prompted the Company to maintain the heightened level of the allowance for loan losses as compared to historical levels, which is 205.15% of nonaccrual loans at September 30, 2012, compared to 79.56% at December 31, 2011. Nonperforming loans decreased $17.6 million or 57.9% during the nine months ended September 30, 2012 to $12.8 million.
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Eastern Virginia Bankshares Inc has a market cap of $34.9 million; its shares were traded at around $5.4 with a P/E ratio of 21.3 and P/S ratio of 0.6.
Highlight of Business Operations:
Eastern Virginia Bankshares, Inc. is committed to delivering strong long-term earnings using a prudent allocation of capital, in business lines where we have demonstrated the ability to compete successfully. During the first nine months of 2012, the national and local economies showed limited signs of recovery with the main challenges continuing to be persistent unemployment above historical levels and uneven economic growth. Macro-economic and political issues continue to temper the global economic outlook and as such the Company remains cautiously optimistic regarding the limited signs of improvement seen in our local markets. Despite this, the Company believes that our local markets are poised for stronger growth in the coming months and years than the economic recovery in our markets in recent periods. As previously disclosed, the Company has established a plan to improve our operating performance and strengthen our balance sheet by focusing on asset quality issues, containing our noninterest expenses and lowering our cost of funding. During the first nine months of 2012, the Company has been successful in the execution of this plan. With the close of the third quarter of 2012, the Company is not only reporting its seventh straight quarter of net income, but its fifth straight quarter of improved net income. During the three and nine months ended September 30, 2012, the Companys net income increased by 76.1% and 112.7%, respectively, when compared to the same periods one year earlier. Even with these improvements, the Companys earnings remain constrained due to the protracted low-interest rate environment, credit quality issues and a lack of loan demand resulting from the challenging economic climate, all of which contribute to compressing the Companys net interest margin. The Companys number one initiative has been and will continue to be improvement in asset quality. The Company had another strong quarter liquidating our troubled assets, reducing our classified assets and improving our overall asset quality. The Company continues to be aggressive in the liquidation of troubled assets and that approach is evident with the overall reduction of nonperforming assets by 12.5% in the third quarter of 2012 and 48.7% year to date through a combination of successful workouts and write-downs of previously identified impaired loans. The Companys Special Assets Division, which was formed in the second quarter of 2011 and works closely with our Executive Management Asset Quality Committee, has worked tirelessly in formulating workout strategies and conducting assets dispositions. Despite our aggressive approach in liquidating troubled assets, the Companys allowance for loan losses remains healthy producing a ratio of allowance for loan losses to nonperforming loans of 172.37% at September 30, 2012 compared to 79.12% at December 31, 2011, and 152.99% at June 30, 2012. Additionally, the Company was able to reduce its ratio of nonperforming loans to total loans at September 30, 2012 to 1.82%, compared to 4.15% at December 31, 2011 while also reducing its ratio of nonperforming assets to total assets at September 30, 2012 to 1.83%. With a modest economic outlook consisting of slow growth, elevated unemployment and low interest rates in the near term the Company continues to believe the primary drivers behind our continued improvement include focusing on asset quality issues, containing noninterest expenses and lowering our cost of funding while maintaining adequate levels of liquidity, reserves for credit losses and capital.Net interest income, on a fully tax equivalent basis, decreased $275 thousand or 3.2% to $8.4 million for the three months ended September 30, 2012, down from $8.7 million for the three months ended September 30, 2011. Total average earning assets decreased $3.5 million or 0.4% from $998.8 million for the three months ended September 30, 2011 to $995.3 million for the same period of 2012. Total average interest-bearing liabilities decreased $22.0 million
Net interest income, on a fully tax equivalent basis, decreased $1.5 million or 5.5% to $25.3 million for the nine months ended September 30, 2012, down from $26.8 million for the nine months ended September 30, 2011. Total average earning assets decreased $8.0 million or 0.8% from $1.01 billion for the nine months ended September 30, 2011 to $998.1 million for the same period of 2012. Total average interest-bearing liabilities decreased $28.7 million or 3.3% from $878.9 million for the nine months ended September 30, 2011 to $850.2 million for the same period of 2012. The decrease in net interest income was driven by the change in the mix and pricing of the balance sheet components including the impact of declining loan balances, decreasing yields on the Companys loan and investment portfolios and the Companys desire to deploy excess liquidity through the expansion of its investment portfolio. The impact of these changes was partially offset by decreases to the cost of all categories of interest-bearing liabilities other than long-term borrowings and trust preferred debt. These shifts resulted in a decrease of 17 basis points in our net interest margin from 3.56% for the nine months ended September 30, 2011 to 3.39% for the same period of 2012. The percentage of average earning assets to total average assets increased slightly to 93.6% for the nine months ended September 30, 2012, as compared to 93.2% for the same period of 2011.
Noninterest income for the nine months ended September 30, 2012 was $8.0 million, an increase of $1.3 million or 19.2% over noninterest income of $6.7 million for the same period of 2011. The increase in noninterest income was primarily due to sales of available for sale securities, which generated gains of $3.5 million in the first nine months of 2012, an increase of $1.7 million or 99.8% over gains of $1.8 million in the first nine months of 2011. During the first nine months of 2012 the Company strategically adjusted the composition of its investment portfolio by reducing its holdings of tax-exempt securities in an effort to increase the Companys source of taxable income. To implement this strategy the Company sold tax-exempt securities issued by state and political subdivisions during the first nine months of 2012, many of which were in an unrealized gain position at the time of sale as a result of monetary policies of the Federal Reserve to maintain the low interest rate environment, and deployed the proceeds into taxable investment securities issued by state and political subdivisions as well as Agency mortgage-backed and Agency CMO securities. The Company will strategically evaluate opportunities to further adjust the composition of its investment portfolio through the balance of 2012. As discussed above, noninterest income for the first nine months of 2012 was also positively impacted by a $197 thousand gain on the sale of our credit card loan portfolio, while no such gains were generated in 2011.
Nonperforming assets were $19.4 million or 2.73% of total loans and other real estate owned at September 30, 2012 compared to $37.8 million or 5.09% at December 31, 2011. Although nonperforming assets began to trend downward during 2011 and decreased by $18.4 million during the first nine months of 2012, this number increased from 2007 through 2010 as a result of the continued challenging economic conditions which have significantly increased unemployment, reduced profitability of local businesses, and reduced the ability of many of our customers to keep their loans current. The sluggish economic recovery and continuing asset quality issues in the Companys loan portfolio have prompted the Company to maintain the heightened level of the allowance for loan losses as compared to historical levels, which is 205.15% of nonaccrual loans at September 30, 2012, compared to 79.56% at December 31, 2011. Nonperforming loans decreased $17.6 million or 57.9% during the nine months ended September 30, 2012 to $12.8 million.
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