Southern National Bancorp of Virginia Inc. Reports Earnings for the First Quarter...

Southern National Bancorp of Virginia Inc. Reports Earnings for the First
Quarter of 2010, Up 98% From the First Quarter of 2009

MCLEAN, Va., April 22, 2010 (GLOBE NEWSWIRE) -- Southern National Bancorp of
Virginia Inc. (Nasdaq:SONA), the holding company for Sonabank, announced today
that net income for the quarter ended March 31, 2010 was $1.0 million compared
to $526 thousand during the quarter ended March 31, 2009.

Net interest income before the provision for loan losses was $6.3 million for
the first quarter of 2010, compared to $3.0 million for the first quarter of
2009. The net interest margin was 4.62% in the quarter ended March 31, 2010,
compared to 3.12% in the quarter ended March 31, 2009. The significant
improvement in the net interest income was attributable to:

-- The impact of the Greater Atlantic and Millennium transactions. The
accretion of the discount on the Greater Atlantic Bank loans contributed
$667 thousand to first quarter net interest income.
-- The bottoming of the decline in interest rates in the first quarter of
2009. The prime rate was 3.25% at the end of the first quarter of 2009
and it remained at that level at the end of the first quarter of 2010.
-- Our practice of establishing floor rates on loans as they mature or roll
over notwithstanding the index rates. On non-SBA loans we have been
establishing floors ranging from 6% to 7 1/2%.
-- Most of the CDs which were outstanding at the end of the first quarter
of 2009 have matured and have been replaced with new CDs at lower rates.
The average rate on our CDs at the end of the first quarter of 2009 was
3.05% compared to 1.80% at the end of the first quarter of 2010.
-- We have reduced rates on deposit accounts as much as we can without
harming relationships. Moreover, we are concerned with the probability
that rates will rise and to the extent possible have positioned
ourselves for this eventuality.

Net interest income after provision for loan losses was $5.0 million for the
first quarter of 2010, compared to $2.6 million for the first quarter of 2009.
The provision for loan losses in the first quarter of 2009 was $480 thousand.
The provision was $1.3 million in the first quarter of 2010. Net charge offs
during the quarter ended March 31, 2010 were $1.1 million compared to $238
thousand during the same quarter last year. The charge-offs were related to
various credits including one non-real estate related SBA loan, one real estate
related SBA loan, one residential mortgage, two commercial and industrial loans,
one consumer loan and one commercial real estate mortgage.

Noninterest income was $540 thousand during the first quarter of 2010, compared
to $594 thousand during the same quarter of 2009. Noninterest income for the
first quarter of 2009 benefitted from a gain on securities of $223 thousand and
gain on other real estate owned ("OREO") of $87 thousand. Account maintenance
and deposit service fees have increased from $132 thousand in the quarter ended
March 31, 2009 to $241 thousand for the first quarter of 2010 primarily because
of the increase in deposit accounts resulting from the Greater Atlantic and
Millennium acquisitions.

Noninterest expense was $4.0 million for the first quarter of 2010 compared to
$2.4 million for the first quarter of 2009. The amortization of the FDIC
indemnification asset added $244 thousand to 2010 first quarter noninterest
expenses and the amortization of the Greater Atlantic Bank core deposit
intangible added $50 thousand. Also, as a result of the Greater Atlantic and
Millennium transactions, compensation expense has increased $578 thousand in the
first quarter of 2010 compared to the same period last year. Full-time
equivalent employees increased from 66 at March 31, 2009 to 103 at March 31,
2010. Occupancy and equipment expenses have also increased $188 thousand, and
data processing, online banking and ATM-related expenses are $140 thousand more
than in the first quarter of 2009. Virginia franchise tax expense has increased
$42 thousand in the quarter ended March 31, 2010 compared to the same period
last year because of the increase in deposits during 2009. Consulting fees have
increased to $50 thousand in the first quarter of 2010 from $5 thousand in the
first quarter of 2009 primarily due to the Greater Atlantic acquisition.

We managed to achieve these earnings gains as we have transformed ourselves as
an institution in the year since the end of the first quarter of 2009.

We purchased Millennium Bank's branch in Warrenton, Virginia in the third
quarter of 2009. This acquisition strengthened our position in the Warrenton
market where we already had a branch. We raised an additional $27 million of
additional common equity. We acquired Greater Atlantic Bank in an FDIC assisted
transaction to add four branches in the fourth quarter of 2009.

As a result of these three transactions, between the end of the first quarter of
2009 and the first quarter of 2010:

-- The branch system grew from 8 branches in Virginia to 12 branches in
Virginia and 1 in Maryland.

-- Total assets of Southern National Bancorp of Virginia were $611.7
million as of March 31, 2010 up from $428.0 million as of March 31,
2009.

-- Total deposits rose from $302.8 million as of March 31, 2009 to $449.2
at March 31, 2010.

-- Shareholders' equity rose from $69.3 million at March 31, 2009 to $98.3
as of March 31, 2010.

Total assets of Southern National Bancorp of Virginia were $611.7 million as of
March 31, 2010 up from $610.7 million as of December 31, 2009. Net loans
receivable decreased from $457.1 million at the end of 2009 to $446.2 million at
March 31, 2010. Two large loans in the Sonabank portfolio totaling approximately
$6.4 million were paid off, one on a project completed and refinanced and the
other as a result of our borrower being acquired by a larger company. There were
also principal repayments in the covered portfolio acquired in the Greater
Atlantic transaction, including large repayments on three loans totaling
approximately $3.2 million. The increase in bank premises and equipment was due
to the purchase of certain fixed assets of Greater Atlantic from the FDIC in the
amount of $1.6 million.

Southern National Bancorp of Virginia's allowance for loan losses was $5.4
million at March 31, 2010 compared to $5.2 million at December 31, 2009. As a
percentage of total non-covered loans at March 31, 2010 the allowance was 1.56%,
and as of December 31, 2009 it was 1.48%.

Loan Portfolio

The composition of our loan portfolio consists of the following at March 31,
2010 and December 31, 2009:

Covered Noncovered Total Covered
Noncovered Total
Loans Loans Loans Loans
Loans Loans
---------- ---------- ---------- ----------
---------- ----------

March 31, 2010
December 31, 2009
----------------------------------
----------------------------------
Mortgage loans on

real estate:

Commercial $ 21,204 $ 143,285 $ 164,489 $ 24,494
$ 146,295 $ 170,789
Construction loans to

residential builders -- 2,486 2,486 --
5,436 5,436
Other construction and

land loans 2,202 42,352 44,554 3,498
42,564 46,062
Residential 1-4 family 32,662 64,382 97,044 33,815
61,024 94,839
Multi- family residential 2,550 10,647 13,197 2,570
10,726 13,296
Home equity lines of

credit 42,890 10,779 53,669 44,235
10,532 54,767
---------- ---------- ---------- ----------
---------- ----------
Total real estate loans 101,508 273,931 375,439 108,612
276,577 385,189

Commercial loans 2,524 71,162 73,686 3,184
70,757 73,941

Consumer loans 172 2,809 2,981 193
3,528 3,721
---------- ---------- ---------- ----------
---------- ----------
Gross loans 104,204 347,902 452,106 111,989
350,862 462,851

Less unearned income

on loans -- (496) (496) --
(564) (564)
---------- ---------- ---------- ----------
---------- ----------
Loans, net of unearned

income $ 104,204 $ 347,406 $ 451,610 $ 111,989
$ 350,298 $ 462,287
========== ========== ========== ==========
========== ==========

Non-covered nonperforming assets decreased by $408 thousand to $6.6 million at
March 31, 2010. We have internal loan review and a loan committee which provide
on-going monitoring to identify and address issues with problem loans. We
believe the allowance for loan losses is sufficient to cover probable incurred
credit losses at March 31, 2010.

Our only OREO in the non-covered portfolio is the previously reported property,
which contains 33 finished 2 to 4 acre lots in Culpeper. In the Greater Atlantic
covered portfolio we have a property with several apartment units in Georgia
with a current carrying value of $310 thousand and two single family residential
properties totaling $157 thousand.

Securities Portfolio

Investment securities, available for sale and held to maturity, were $73.2
million at March 31, 2010 and $76.2 million at December 31, 2009.

As of March 31, 2010 we owned pooled trust preferred securities as follows:

Ratings
Estimated
Tranche When Purchased Current Ratings
Fair

Book
Security Level Moody's Fitch Moody's Fitch Par
Value Value Value
------------------- -------------- ------- ------- ------- ------
---------- --------- ---------
Investment Grade:
(in thousands)
ALESCO VII A1B Senior Aaa AAA A3 A $
8,674 $ 7,716 $ 7,044
MMCF II B Senior Sub A3 AA- Baa2 BB
578 530 503

MMCF III B Senior Sub A3 A- Baa3 B
702 685 436

---------- --------- ---------

9,954 8,931 7,983

---------- --------- ---------

Other Than

Temporarily

Impaired:

TPREF FUNDING II Mezzanine A1 A- Caa3 C
1,500 478 562
TRAP 2007-XII C1 Mezzanine A3 A Ca C
2,028 125 329
TRAP 2007-XIII D Mezzanine NR A- NR NR
2,032 -- --
MMC FUNDING XVIII Mezzanine A3 A- Ca C
1,031 83 128
ALESCO V C1 Mezzanine A2 A Ca C
2,031 555 625
ALESCO XV C1 Mezzanine A3 A- Ca C
3,053 28 234

ALESCO XVI C Mezzanine A3 A- Ca C
2,035 113 314

---------- --------- ---------

13,710 1,382 2,192

---------- --------- ---------

Total $
23,664 $ 10,313 $ 10,175

========== ========= =========

Sandler

O'Neill (a)

Sterne Agee

(b)
Previously
% of

Current Estimated
Recognized
Defaults

and Incremental
Cumulative
Current Deferrals Defaults Other

Defaults

and to Current Required to
Comprehensive

Break Yield

Security Deferrals Collateral (1) Loss
(2)
--------------------- ---------- ---------- -----------
-------------
Investment Grade:

ALESCO VII A1B $ 176,056 28% $ 213,967 b $
328
MMCF II B 34,000 27% 16,900 a
48

MMCF III B 27,000 23% 22,100 a
17

-------------

$
393

=============

Cumulative Cumulative
Other
OTTI

Comprehensive Related to
Other Than

Temporarily Loss
Credit
Impaired: (3)
Loss (3)

------------- ----------
TPREF FUNDING II 115,100 33% --
780 $ 242
TRAP 2007-XII C1 132,705 27% --
1,324 579
TRAP 2007-XIII D 260,250 35% --
-- 2,032
MMC FUNDING XVIII 94,682 29% --
478 470
ALESCO V C1 91,442 27% --
963 513
ALESCO XV C1 225,100 34% --
466 2,559

ALESCO XVI C 147,250 29% --
742 1,180

------------- ----------

$
4,753 $ 7,575

------------- ----------

(1) A break in yield for a given tranche means that defaults/deferrals have

reached such a level that the tranche would not receive all of its
contractual
cash flows (principal and interest) by maturity (so not just a temporary

interest shortfall, but an actual loss in yield on the investment). In other

words, the magnitude of the defaults/deferrals has depleted all of the credit

enhancement (excess interest and over-collateralization) beneath the given

tranche. This represents additional defaults beyond those currently existing.

(2) Pre-tax, and represents unrealized losses at date of transfer from

available-for-sale to held-to-maturity

(3) Pre-tax

We have evaluated each of these securities for potential impairment under ASC
325, and have reviewed each of the issues' collateral participants using various
techniques including the ratings provided in the Bank Financial Quarterly
published by IDC Financial Publishing, Inc. We have also reviewed the interest
and principal coverage of each of the tranches we own. In performing a detailed
cash flow analysis of each security, we work with independent third parties to
identify our best estimate of the cash flow estimated to be collected. If this
estimate results in a present value of expected cash flows that is less than the
amortized cost basis of a security (that is, credit loss exists), an other than
temporary impairment ("OTTI") is considered to have occurred. If there is no
credit loss, any impairment is considered temporary. The cash flow analysis we
performed included the following assumptions:

-- We assume that 2% of the remaining performing collateral will default or
defer in the second quarter of 2010 and 50 basis points per annum
thereafter.
-- We assume recoveries of 25% with a two year lag on all defaults and
deferrals.
-- We assume no prepayments for 10 years and then 1% per annum for the
remaining life of the security.
-- Our securities have been modeled using the above assumptions by
independent third parties using the forward LIBOR curve plus original
spread to discount projected cash flows to present values.

These assumptions resulted in no OTTI recognition on the trust preferred
securities during the first quarter of 2010.

We also own $1.9 million of SARM 2005-22 1A2. This residential collateralized
mortgage obligation was downgraded from B to CCC by Standard and Poors in
September 2009, and it was downgraded from BBB to CC by Fitch in August 2009.
The fair market value is $1.5 million. We have evaluated this security for
potential impairment and, based on our review of the trustee report, shock
analysis and current information regarding delinquencies, nonperforming loans
and credit support, determined that an OTTI does exist as of March 31, 2010 in
the amount of $7 thousand. The assumptions used in the analysis included a 5%
prepayment speed, 10% default rate, a 50% loss severity and an accounting yield
of 4.75%.

Deposits

Total deposits were $449.2 million at March 31, 2010 compared to $455.8 million
at December 31, 2009. The decline was almost entirely in brokered deposits which
fell from $70.0 million as of December 31, 2009 to $65.0 million at March 31,
2010. Noninterest-bearing deposits were $33.5 million at March 31, 2010 and
$33.3 million at December 31, 2009.

Stockholders' Equity

Total stockholders' equity increased from $97.1 million as of December 31, 2009
to $98.3 million at March 31, 2010 as a result of the retention of earnings.
Tangible stockholders' equity to total tangible assets was 14.34%, and the Tier
1 Risk Based Capital Ratio was 21.23% as of March 31, 2010.

Sonabank operates 12 branches in Virginia located in Fairfax County (Reston,
McLean and Fairfax), in Charlottesville, Warrenton (2), Leesburg (2), South
Riding, Front Royal, New Market and Clifton Forge, and we also have a branch in
Rockville, Maryland.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that relate to future events or
the future performance of Southern National Bancorp of Virginia, Inc.
Forward-looking statements are not guarantees of performance or results. These
forward-looking statements are based on the current beliefs and expectations of
the respective management of Southern National Bancorp of Virginia, Inc. and
Sonabank and are inherently subject to significant business, economic and
competitive uncertainties and contingencies, many of which are beyond their
respective control. In addition, these forward-looking statements are subject to
assumptions with respect to future business strategies and decisions that are
subject to change. Actual results may differ materially from the anticipated
results discussed or implied in these forward-looking statements because of
numerous possible uncertainties. Words like "may," "plan," "contemplate,"
"anticipate," "believe," "intend," "continue," "expect," "project," "predict,"
"estimate," "could," "should," "would," "will," and similar expressions, should
be considered as identifying forward-looking statements, although other phrasing
may be used. Such forward-looking statements involve risks and uncertainties and
may not be realized due to a variety of factors. Additional factors that could
cause actual results to differ materially from those expressed in the
forward-looking statements are discussed in the reports (such as Annual Reports
on Form 10-K, Quarterly Reports on Form 10-Q) filed by Southern National Bancorp
of Virginia, Inc. You should consider such factors and not place undue reliance
on such forward-looking statements. No obligation is undertaken by Southern
National Bancorp of Virginia, Inc. to update such forward-looking statements to
reflect events or circumstances occurring after the issuance of this press
release.

Southern National Bancorp of Virginia, Inc.

McLean, Virginia
--------------------------------------------------------

Condensed Consolidated Balance Sheets

(Unaudited)
--------------------------------------------------------
(in thousands)
December
March 31, 31,

2010 2009
----------- ----------
Assets
Cash and cash equivalents $ 20,946 $ 8,070
Investment securities-available
for sale 18,027 18,505
Investment securities-held to
maturity 55,188 57,696
Stock in Federal Reserve Bank
and Federal Home Loan Bank 6,775 5,940
Loans receivable, net of
unearned income 451,610 462,287

Allowance for loan losses (5,421) (5,172)
----------- ----------
Net loans 446,189 457,115
Intangible assets 12,336 12,571
Bank premises and equipment,
net 4,761 3,225
Bank-owned life insurance 14,153 14,014
FDIC indemnification asset 19,164 19,408

Other assets 14,140 14,130
----------- ----------

Total assets $ 611,679 $ 610,674
=========== ==========

Liabilities and stockholders'
equity
Noninterest-bearing deposits $ 33,509 $ 33,339
Interest-bearing deposits 415,713 422,452
Securities sold under
agreements to repurchase and
other
short-term borrowings 21,248 22,020
Federal Home Loan Bank advances 35,000 30,000

Other liabilities 7,956 5,739
----------- ----------
Total liabilities 513,426 513,550

Stockholders' equity 98,253 97,124
----------- ----------
Total liabilities and
stockholders' equity $ 611,679 $ 610,674
=========== ==========

--------------------------------------------------------

Condensed Consolidated Statements of Income

(Unaudited)
--------------------------------------------------------
(in thousands)
For the Quarters Ended
March 31,

2010 2009
----------- ----------

Interest and dividend income $ 8,391 $ 5,426

Interest expense 2,131 2,380
----------- ----------
Net interest income 6,260 3,046

Provision for loan losses 1,300 480
----------- ----------
Net interest income after
provision for loan losses 4,960 2,566
----------- ----------
Account maintenance and deposit
service fees 241 132
Income from bank-owned life
insurance 139 148
Gain (loss) on other real
estate owned, net 20 87
Net impairment losses
recognized in earnings (7) --
Gain on securities -- 223

Other 147 4
----------- ----------

Noninterest income 540 594
----------- ----------
Employee compensation and
benefits 1,641 1,063
Premises, furniture and
equipment 696 508
FDIC assessments 189 174

Other expenses 1,452 688
----------- ----------

Noninterest expense 3,978 2,433
----------- ----------
Income before income taxes 1,522 727

Income tax expense 481 201
----------- ----------

Net income $ 1,041 $ 526
=========== ==========

--------------------------------------------------------

Financial Highlights

(Unaudited)
--------------------------------------------------------
(Dollars in thousands except
per share data)

For the Quarters Ended
March 31,

2010 2009
----------- ----------

Per Share Data (1):
Earnings per share - Basic $ 0.09 $ 0.08
Earnings per share - Diluted $ 0.09 $ 0.08
Book value per share $ 8.48 $ 10.19
Tangible book value per share $ 7.41 $ 8.47
Weighted average shares
outstanding - Basic 11,590,212 6,798,547
Weighted average shares
outstanding - Diluted 11,593,463 6,798,547
Shares outstanding at end of
period 11,590,212 6,798,547

Selected Performance Ratios and
Other Data:
Return on average assets 0.69% 0.49%
Return on average equity 4.35% 3.08%
Yield on earning assets 6.20% 5.57%
Cost of funds 1.81% 2.85%
Cost of funds including
non-interest bearing deposits 1.69% 2.67%
Net interest margin 4.62% 3.12%
Efficiency ratio (1) 58.61% 73.06%
Net charge-offs (recoveries) to
average loans 0.23% 0.08%
Amortization of intangibles $ 236 $ 182

--------------------------------------------------------

As of
December
March 31, 31,

2010 2009
----------- ----------

Stockholders' equity to total
assets 16.06% 15.88%
Tier 1 risk-based capital ratio 21.23% 17.23%
Intangible assets:
Goodwill $ 8,713 $ 8,713

Core deposit intangible 3,623 3,858
----------- ----------
Total $ 12,336 $ 12,571

Non-covered loans and other
real estate owned (2):
Nonaccrual loans $ 3,782 $ 4,190
Loans past due 90 days and
accruing interest -- --

Other real estate owned 2,796 2,796
----------- ----------
Total nonperforming assets $ 6,578 $ 6,986
Allowance for loan losses to
total non-covered loans 1.56% 1.48%
Nonperforming assets to total
non-covered assets 1.30% 1.41%
Nonperforming assets to total
non-covered loans 1.89% 1.99%

(1) Excludes gains and
write-downs on OREO, gains on
sale of loans, gains/losses on
sale of
securities and impairment
losses recognized in earnings.
(2) Applies only to non-covered
Sonabank loans and other real
estate owned.

CONTACT: Southern National Bancorp of Virginia Inc.
R. Roderick Porter, President
202-464-1130 ext. 2406
Fax: 202-464-1134
www.sonabank.com