Community Bank of Northern Virginia Announces Second Quarter 2004 Results.STERLING, Va. -- Community Bank of Northern Virginia Northern Virginia (NoVA) consists of Arlington, Fairfax, Loudoun, and Prince William counties and the independent cities of Alexandria, Falls Church, Fairfax, Manassas, and Manassas Park. (Nasdaq:CBNV CBNV Community Bank of Northern Virginia ) today announced second quarter 2004 net income of $1.695 million, or $0.16 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. common share, compared to $881,000, or $0.09 per diluted common share for the same period last year, an increase of 92%. Return on average equity for the second quarter 2004 was 11.94% compared to 6.53% for the same period last year. Return on average assets for the second quarter 2004 was 0.82% compared to 0.51% for the same quarter last year. Net income for the six months ended June June: see month. 30, 2004 was $4.132 million, or $0.40 per diluted common share, compared to $3.5 million, or $0.34 per diluted common share for the same period last year, an increase of 18%. Return on average equity for the six months ended June 30, 2004 was 14.59% compared to 13.24% for the same period last year. Return on average assets for the six months ended June 30, 2004 was 1.03% compared to 1.04% for the same period last year. Key highlights of Second Quarter 2004 vs. Second Quarter 2003 --Average assets increased $140 million, or 20%; average loans increased $131 million, or 29%; and average deposits increased $109 million, or 21%. Loan growth was concentrated primarily in two sectors, business loans secured by real estate and indirect consumer loans. Deposit growth was principally reflected in certificates of deposit, as customers preferred the flexibility and higher rate offered with our no-penalty product. Additional funding for the asset growth was provided by wholesale borrowings from the Federal Home Loan Bank. Average borrowings increased $27 million or 24%. --The operating efficiency ratio improved to 45.99% from 47.62% as the Bank continued its focus on controlling expenses and maximizing max·i·mize tr.v. max·i·mized, max·i·miz·ing, max·i·miz·es 1. To increase or make as great as possible: utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be of its technology infrastructure. --Dividends per share increased $0.03 to $0.10, an increase of 43% compared with the same period last year --Asset quality ratios were mixed. Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. net charge-offs to average loans held for investment declined to 0.03% from 0.38% however nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. to total assets increased to 1.35% from 0.29%. During the second quarter 2004 several larger commercial real estate credits were placed on nonaccrual. Two of these commercial real estate loans were underwritten as condo conversions Generally stated, a condo conversion is a process of entitling an income property or other lands currently held under one title to convert from sole ownership of the entire property (which often already is a multi unit property) into individual for sale units. but the conversions have not proceeded as expected. Due to the delay, the current fair value of the underlying collateral collateral (kəlăt`ərəl), something of value given or pledged as security for payment of a loan. Collateral consists usually of financial instruments, such as stocks, bonds, and negotiable paper, rather than physical goods, although was less than the recorded loan amount and the Bank was required to increase its allowance for loan losses by a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge of $1.125 million in the second quarter 2004. Workout Workout Informal repayment or loan forgiveness arrangement between a borrower and creditors. workout 1. The process of a debtor's meeting a loan commitment by satisfying altered repayment terms. efforts are continuing. --Income before discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , or core income, decreased $545 thousand, or 24%, in the second quarter 2004 compared to the same period last year. Comparing the second quarter 2004 with the second quarter 2003, net interest income increased $824 thousand or 12.4% despite a 22 basis point decline in net interest margin. The provision for loan losses increased $1.3 million, which includes the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. charge. Other income declined $102 thousand attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk in large measure to a reduction in gains on the sale of investment securities. Securities gains declined $245 thousand. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased $361 thousand, or 10.7% due primarily to increases in professional fees. In the second quarter of 2003, a $1.4 million loss from discontinued operations was recognized. Community Bank of Northern Virginia (http://www.cbnv.com/) began banking activities in 1992 upon receiving its charter from the Virginia Virginia, state, United States Virginia, state of the south-central United States. It is bordered by the Atlantic Ocean (E), North Carolina and Tennessee (S), Kentucky and West Virginia (W), and Maryland and the District of Columbia (N and NE). State Corporation Commission through the acquisition of assets Acquisition of assets A merger or consolidation in which an acquirer purchases the selling firm's assets. and liabilities of an existing bank. Community Bank is a full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. banking institution that operates thirteen branch offices and fifteen automated teller machines automated teller machine (ATM), device used by bank customers to process account transactions. Typically, a user inserts into the ATM a special plastic card that is encoded with information on a magnetic strip. . The primary services offered by its 122 full-time equivalent Full-time equivalent (FTE) is a way to measure a worker's involvement in a project, or a student's enrollment at an educational institution. An FTE of 1.0 means that the person is equivalent to a full-time worker, while an FTE of 0.5 signals that the worker is only half-time. employees include retail, mortgage, commercial, and home banking. This press release contains certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. with respect to the plans, objectives, future performance and business of Community Bank of Northern Virginia. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) competitive pressure in the banking industry increase significantly; (2) changes in the interest rate environment reduce margins or favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. changes in interest rates do not occur; (3) general economic conditions either nationally or regionally are less favorable than expected, resulting in, among other things, a deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in credit quality; (4) changes occur in the regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. environment; (5) changes occur in business conditions; (6) changes occur in the securities markets; (7) the Bank's loan loss reserve to address credit quality concerns may be inadequate, and additional reserves are necessary; (8) strategies to enhance earnings and/or and/or conj. Used to indicate that either or both of the items connected by it are involved. Usage Note: And/or is widely used in legal and business writing. shareholder value are not implemented or fail to have the effects anticipated; (9) recent bank merger activity may not result in the Bank's realizing its goals of increased market share and additional branch expansion; and (10) litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the Bank's second mortgage lending Second mortgage lending Loans secured by real estate previously pledged in a first mortgage. does not have the effects anticipated and liabilities resulting from the litigation are greater than expected.
COMMUNITY BANK OF NORTHERN VIRGINIA
FINANCIAL HIGHLIGHTS (Unaudited)
----------------------------------------------------------------------
Quarter Ended
(000's except share data)
---------------------------------
%
Operations 6/30/04 6/30/03 Change
-------------- ----------- ----------- ---------
Interest income $11,061 $9,982 10.8
Interest expense 3,565 3,310 7.7
----------- ----------- ---------
Net interest income 7,496 6,672 12.4
Provision for possible loan losses 1,850 550 236.4
----------- ----------- ---------
Net interest income after provision
for possible loan losses 5,646 6,122 -7.8
Other income 433 535 -19.1
Operating expenses 3,729 3,368 10.7
----------- ----------- ---------
Income before income taxes and
discontinued operations 2,350 3,289 -28.5
Income taxes 655 1,049 -37.6
----------- ----------- ---------
Income before discontinued
operations 1,695 2,240 -24.3
Income (loss) from discontinued
operations ---- (1,359) ----
----------- ----------- ---------
Net income $1,695 $881 92.4
=========== ----------- ---------
Per Share Data
------------------
Basic earnings per share before
discontinued operations $0.17 $0.22 -22.7
Basic earnings per share $0.17 $0.09 88.9
Diluted earnings per share before
discontinued operations $0.16 $0.22 -27.3
Diluted earnings per share $0.16 $0.09 77.8
Dividends per share $0.10 $0.07 42.9
Book value per share $5.44 $5.35 1.7
Closing stock price $13.50 $11.69 15.4
Weighted average shares - Basic 10,159,192 10,081,352
Weighted average shares - Diluted 10,334,490 10,389,379
Selected Balance Sheet Data
-------------------------------
Investments $224,031 $208,215 7.6
Gross Loans $608,819 $467,696 30.2
Total Assets $869,885 $713,994 21.8
Deposits $660,279 $561,799 17.5
Borrowings $145,441 $91,610 58.8
Stockholders' Equity $55,348 $53,961 2.6
Ratios
----------
Return on average assets before
discontinued operations 0.82% 1.29%
Return on average assets 0.82% 0.51%
Return on average equity before
discontinued operations 11.94% 16.60%
Return on average equity 11.94% 6.53%
Gross loans to deposits 92.21% 83.25%
Net interest margin (tax equivalent) 3.81% 4.03%
Overhead ratio before discontinued
operations 1.58% 1.63%
Operating efficiency before
discontinued operations (1) 45.99% 47.62%
Non-performing assets to total
assets 1.35% 0.29%
Net charge-offs to average loans
held for investment (annualized) 0.03% 0.38%
Allowance for possible loan losses
to loans held for investment 1.37% 1.19%
Regulatory Capital Ratios
-----------------------------
Tier 1 risk-based capital ratio 8.60% 10.27%
Total risk-based capital ratio 11.33% 11.37%
Leverage ratio 6.88% 7.47%
Balance Sheet (averages)
----------------------------
Investments $218,902 $215,480 1.6
Gross Loans $588,256 $457,593 28.6
Total Assets $836,763 $696,734 20.1
Deposits $637,001 $527,668 20.7
Borrowings $137,543 $111,039 23.9
Stockholders' Equity $57,078 $54,133 5.4
Year Ended
(000's except share data)
--------------------------------
%
Operations 6/30/04 6/30/03 Change
-------------- ----------- ----------- --------
Interest income $21,776 $19,899 9.4
Interest expense 6,893 6,666 3.4
----------- ----------- --------
Net interest income 14,883 13,233 12.5
Provision for possible loan losses 2,330 950 145.3
----------- ----------- --------
Net interest income after provision
for possible loan losses 12,553 12,283 2.2
Other income 1,018 1,263 -19.4
Operating expenses 7,734 6,806 13.6
----------- ----------- --------
Income before income taxes and
discontinued operations 5,837 6,740 -13.4
Income taxes 1,705 2,158 -21.0
----------- ----------- --------
Income before discontinued operations 4,132 4,582 -9.8
Income (loss) from discontinued
operations ---- (1,082) ----
----------- ----------- --------
Net income $4,132 $3,500 18.1
=========== =========== ========
Per Share Data
------------------
Basic earnings per share before
discontinued operations $0.41 $0.45 -8.9
Basic earnings per share $0.41 $0.35 17.1
Diluted earnings per share before
discontinued operations $0.40 $0.45 -11.1
Diluted earnings per share $0.40 $0.34 17.6
Dividends per share $0.19 $0.14 35.7
Book value per share $5.44 $5.35 1.7
Closing stock price $13.50 $11.69 15.4
Weighted average shares - Basic 10,149,426 10,051,944
Weighted average shares - Diluted 10,336,712 10,346,728
Ratios
----------
Return on average assets before
discontinued operations 1.03% 1.36%
Return on average assets 1.03% 1.04%
Return on average equity before
discontinued operations 14.59% 17.33%
Return on average equity 14.59% 13.24%
Gross loans to deposits 92.21% 83.25%
Net interest margin (tax equivalent) 3.91% 4.12%
Overhead ratio before discontinued
operations 1.67% 1.65%
Operating efficiency before
discontinued operations (1) 48.13% 48.29%
Non-performing assets to total assets 1.35% 0.29%
Net charge-offs to average loans held
for investment (annualized) 0.08% 0.27%
Allowance for possible loan losses to
loans held for investment 1.37% 1.19%
Regulatory Capital Ratios
-----------------------------
Tier 1 risk-based capital ratio 8.60% 10.27%
Total risk-based capital ratio 11.33% 11.37%
Leverage ratio 6.88% 7.47%
Balance Sheet (averages)
----------------------------
Investments $203,374 $212,230 -4.2
Gross Loans $576,807 $443,596 30.0
Total Assets $808,507 $679,299 19.0
Deposits $624,180 $522,402 19.5
Borrowings $121,639 $99,358 22.4
Stockholders' Equity $56,965 $53,314 6.8
(1) Excludes securities gains and OREO gains (losses). |
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