http://www.businesswire.com/news/home/20091027005332/en
ARLINGTON, Va.--(Business Wire)--
Virginia Commerce Bancorp, Inc. (the "Company") (Nasdaq:VCBI), parent company of
Virginia Commerce Bank (the "Bank"), today reported a net loss of $31.1 million,
or $1.17 per diluted common share, for the third quarter of 2009, compared with
earnings of $2.7 million, or $0.10 per diluted common share, for the same period
in 2008. The third quarter loss was primarily due to $49.0 million in provisions
for loan losses versus $8.3 million for the three months ended September 30,
2008, and a $9.1 million loss on other real estate owned. Total non-performing
assets and loans 90+ days past due decreased $16.1 million from June 30, 2009,
and net-charge-offs of $17.9 million were taken during the quarter. With this
increase in provisions, the allowance for loan losses rose from 1.72% of total
loans as of June 30, 2009, to 3.15% as of September 30, 2009.
Peter A. Converse, Chief Executive Officer, commented, "We are pleased to report
ongoing progress in reducing non-performing assets and loans 90+ days past due,
as the total has declined for two consecutive quarters from $162.1 million as of
March 31, 2009, to $123.5 million this quarter-end. For the current quarter,
non-accrual loans decreased $20.9 million and loans 90+ days past due decreased
$3.3 million, while other real estate owned increased by $8.2 million.
Management remains cautiously optimistic that asset quality will continue to
improve."
Converse continued, "Improving credit metrics undoubtedly are being achieved at
the expense of increased loan loss reserve provisioning and charge-offs, as we
remain focused on aggressive problem loan resolution. In analyzing the level of
our reserves relative to existing problem credits, peer group coverage ratios
and the uncertain pace of economic recovery, we determined that increasing
reserves with a provision of $49 million was warranted. While that provision
significantly impacted earnings, it more than doubled our non-performing loan
coverage ratio to 80.5 %, which we feel provides adequate cushion. It should not
be interpreted, however, as an indication of heightened concern by management
about large, imminent losses or increasing deterioration in the loan portfolio.
Rather, management felt it was a prudent risk management measure that positions
our Bank in line with current industry and peer standards."
"Despite the substantive costs of working out problem loans, we are encouraged
by the strength of our core operating earnings, which have increased over the
last two quarters from $9.6 million in the first quarter to $12.0 million this
quarter. We expect that these earnings will remain in the $10-12 million range
for the foreseeable future and consider them indicative of our bottom line
potential once we get beyond our credit issues. Contributing to core earnings
performance has been a rising net interest margin, which increased sequentially
from 3.35% to 3.52%. The improving margin in turn has benefited from continued
improvement in our deposit mix. Certificates of deposit as a percent of total
deposits have declined further, from a high of 67.2% at year-end 2008, to 49.9%
this quarter, as we enjoy greater success in generating lower cost deposits.
Core earnings also continue to benefit from vigilant cost containment, exclusive
of collection costs."
Converse concluded, "The loss this quarter is disappointing to say the least.
However, it has enabled us to raise the allowance for loan losses to a level
that provides prudent coverage of the risk in our non-performing loans and
overall portfolio, thereby positioning us for a quicker return to profitability.
While absorbing losses year-to-date in addressing problem loans and building
reserves, the Company has remained well-capitalized with the Tier 1 capital
ratio at 11.53% and the total qualifying capital ratio at 12.78% as of September
30."
SUMMARY REVIEW OF FINANCIAL PERFORMANCE
Net (Loss) Income
For the three months ended September 30, 2009, the Company recorded a net
operating loss of $29.9 million. After an effective dividend of $1.2 million to
the U.S. Treasury on preferred stock, the Company reported a net loss to common
stockholders of $31.1 million, or $1.17 per diluted common share, compared to
earnings of $2.7 million, or $0.10 per diluted common share, in the third
quarter of 2008. For the nine months ended September 30, 2009, the Company
reported a net loss to common stockholders of $40.8 million compared to earnings
of $11.7 million for the same period in 2008. Earnings for both the three and
nine-month periods were significantly impacted by loan loss provisions of $49.0
million and $80.8 million, respectively, taken in consideration of the level of
non-performing assets and $47.2 million in net charge-offs in 2009. Earnings
were also impacted by a $9.1 million loss on other real estate owned.
Before taxes, loan loss provisions and losses on other real estate owned, core
operating earnings for the three months ended September 30, 2009, of $12.0
million were down slightly compared to $12.2 million for the three months ended
September 30, 2008. However, on a sequential basis, core operating earnings were
up $1.6 million compared to $10.4 million for the three months ended June 30,
2009, and are up $2.4 million compared to core operating earnings of $9.6
million for the three months ended March 31, 2009. This positive trend is due to
continued strong operating expense controls and improvement in the net interest
margin.
Asset Quality and Provisions For Loan Losses
Provisions for loan losses were $49.0 million for the three months ended
September 30, 2009, compared to $8.3 million in the same period in 2008, as
non-performing assets and loans 90+ days past due increased from $85.3 million
at September 30, 2008, to $123.5 million at September 30, 2009. For the nine
months ended September 30, 2009, provisions totaled $80.8 million compared to
$16.1 million for the nine months ended September 30, 2008, with 2009
year-to-date net charge-offs of $47.2 million compared to $5.7 million in 2008.
As a result, the coverage of loan loss reserves to non-performing loans rose
from 35.0% at June 30, 2009, to 80.5% as of this quarter-end, and the allowance
for loan losses increased from 1.72% of total loans to 3.15%. The significant
quarterly increase in reserves is not an indication of heightened concern or
expectations of further credit deterioration. Rather, it is an attempt to
increase the coverage ratio on a one-time basis relative to the current level of
non-performing loans and in recognition of continued economic uncertainty in
regard to the commercial real estate market. Progress with respect to
management`s commitment to aggressive problem loan resolution continues, as
total non-performing assets and loans 90+ days past due declined by $16.1
million during the quarter from $139.6 million, or 5.17% of total assets, to
$123.5 million, or 4.52% of total assets. Non-accrual loans decreased by $20.9
million, loans 90+ days past due decreased by $3.3 million and other real estate
owned (foreclosed properties) increased by $8.2 million. Although loans past due
30 to 89 days increased $11.6 million during the quarter to $30.9 million, they
remain significantly lower from their peak level of $55.7 million at March 31,
2009. Approximately 28% of loans past due 30 to 89 days relate to a single
non-farm, non-residential credit.
Non-performing loans continue to be concentrated in residential and commercial
construction and land development loans in outer sub-markets hardest hit by the
residential downturn and commercial and consumer credits experiencing the after
shocks in sub-contracting businesses and workforce employment. Overall, as of
September 30, 2009, $48.7 million, or 56.0%, of non-performing loans represented
acquisition, development and construction loans, $19.1 million, or 21.9%,
represented non-farm, non-residential loans, $9.9 million, or 11.4%, represented
commercial and industrial loans and $9.1 million, or 10.5%, represented loans on
one-to-four family residential properties.
Charge-offs of $17.9 million for the quarter were up $1 million sequentially and
primarily related to the write-down to current fair market value of acquisition,
development and construction loans of $4.9 million and commercial and industrial
loans of $12.2 million. The acquisition, development and construction loan
write-down was in anticipation of pending sale contracts and/or foreclosures
over the next quarter. The commercial and industrial loan write-down was
attributed primarily to an $8.4 million charge-off relating to participation in
a rapidly deteriorating shared national credit engaged in the development of
continuing care retirement communities and a $3.6 million charge-off relating to
the auction of heavy construction equipment financed for a site development
contractor and the subsequent restructuring of related loans.
Net Interest Income
Net interest income for the third quarter of $23.4 million was up $1.5 million,
or 6.8% over the same quarter last year, due to overall balance sheet growth,
and an increase in the net interest margin from 3.38% in the third quarter of
2008 to 3.52% for the current three-month period. Year-to-date net interest
income of $66.2 million was up 6.6%, compared to $62.1 million for the same
period in 2008. On a sequential basis, net interest income increased $1.4
million as the net interest margin rose seventeen basis points from 3.35% in the
second quarter of 2009, primarily due to a twenty-two basis point drop in the
cost of interest-bearing liabilities as the yield on earning assets remained
unchanged. This drop in the cost of funds is due to significant reductions in
the level of time deposits, increased levels of demand deposits and increased
levels of lower rate interest-bearing transaction accounts.
Year-over-year, the net interest margin was unchanged at 3.34%, as yields on
loans are down 86 basis points due to reductions in the prime rate and increases
in the level of non-performing loans, while the cost of interest-bearing
liabilities are down 89 basis points due to the changes noted above in the
funding mix. With market rates expected to remain mostly unchanged through the
remainder of 2009, Management anticipates the fourth quarter margin to average
from 3.50% to 3.60%.
Non-Interest Income
For the three months ended September 30, 2009, non-interest income reflects a
loss of $7.6 million compared to $1.6 million in income in the same period of
2008 due to a $9.1 million loss on other real estate owned and a $280 thousand
impairment loss on securities. The $9.1 million OREO loss resulted from carrying
value write-downs of four land development assets, based on pending sales
contracts/offers due to settle this fourth quarter or the first quarter of next
year. These losses are consistent with management`s commitment to aggressive
disposition of OREO, rather than land banking assets with uncertain future
upside potential. Excluding these losses, non-interest income rose $195 thousand
quarter-over-quarter with the majority of the increase in fees and net gains on
mortgage loans held-for-sale. Results were similar on a year-over-year basis
with non-interest income increasing $742 thousand, excluding the $9.1 million
loss on other real estate owned and $418 thousand in impairment losses on
securities, due again to higher levels of fees and net gains on mortgage loans
held-for-sale.
Non-Interest Expense
Non-interest expense increased $1.7 million, or 14.8%, from $11.3 million in the
third quarter of 2008, to $12.9 million, and was up $6.3 million, or 18.9%, for
the nine months ended September 30, 2009, to $39.5 million. Compared to the
second quarter of 2009, non-interest expense is down $664 thousand. The majority
of the year-over-year increases were due to significantly higher FDIC insurance
premiums, including a special one-time assessment of $1.2 million in the second
quarter of 2009, as well as higher legal and professional services expenses
associated with the resolution of non-performing loans and OREO. As a result of
these increases in expenses, the efficiency ratio rose from 47.9% in the third
quarter of 2008 to 52.1% in the current period. Sequentially, the ratio improved
from 56.7%.
Loans
Over the past twelve months, loans, net of allowance for loan losses, decreased
$78.5 million, or 3.5%, to $2.15 billion, as non-farm, non-residential real
estate loans increased $67.2 million, or 6.7%, and one-to-four family
residential loans increased $69.7 million, or 21.2%, while real estate
construction loans fell by $155.8 million, or 26.2%, and commercial and
industrial loans were down 10.3%. Since December 31, 2008, net loans are down
$118.8 million, or 5.3%, with non-farm non-residential loans up $59.0 million,
construction loans down $146.6 million, and one-to-four family residential loans
for portfolio up $41.4 million. In addition, one-to-four family residential
loans originated for sale totaled $30.4 million for the quarter ended September
30, 2009, and $156.3 million year-to-date, compared to $17.2 million and $61.5
million for the same periods in 2008. This contributed to the gain in
non-interest income as noted earlier.
Year-to-date loan production has been negatively impacted by declining economic
activity and demand in both the business and consumer sectors, a reallocation of
personnel resources to problem loan identification and resolution and a
strategic decision to moderate loan growth in the face of an uncertain economy
and heightened risk factors. Going forward, lending efforts will be focused on
building greater market share in commercial and industrial lending, especially
in sectors forecast for growth, such as government contract lending and select
service industries with strategic hiring, marketing campaigns and calling
efforts.
Deposits
Year-over-year, deposits increased $79.0 million, or 3.7%, from $2.1 billion to
$2.2 billion, with demand deposits increasing $21.9 million, or 10.6%, savings
and interest-bearing demand deposits increasing by $354.9 million, or 166.1%,
and time deposits falling $297.9 million, or 21.1%. Sequentially, deposits were
up $43.3 million, or 2.0%, with demand deposits decreasing by $11.3 million,
time deposits decreasing by $77.1 million, and savings and interest-bearing
demand accounts growing $131.7 million. That increase was due primarily to
success with the Company`s MEGA Savings and MEGA Checking accounts. The declines
in time deposits are reflective of lower loan volume and a strategy to reduce
the Bank's historically heavy reliance on certificates of deposit as a funding
source with deposit gathering efforts and cross-selling activities focused on
demand deposits, savings and interest-bearing demand accounts. The proportionate
share of time deposits to total deposits has declined from 67.2% at year-end
2008 to 49.9% as of September 30, 2009. It is expected that the percentage share
of time deposits will further decline to 45.0% or less by year-end, including a
planned reduction in brokered certificates of deposit from $60.1 million at
September 30, 2009, to approximately $30 million.
Repurchase Agreements and Fed Funds Purchased
Repurchase agreements, the majority of which represent sweep funds of
significant commercial demand deposit customers, and Fed funds purchased
decreased $12.5 million, or 6.3%, year-over-year, to $185.5 million at September
30, 2009. Since December 31, 2008, this funding source is down $2.4 million.
Investment Securities
Investment securities increased $51.2 million, or 16.1%, from $317.9 million at
September 30, 2008, to $369.1 million at September 30, 2009, and were up $48.2
million sequentially from the second quarter. The majority of the current period
and year-over-year increase in securities was concentrated in U.S. Government
agency debt obligations and mortgage-backed securities. The portfolio also
contains four pooled trust preferred collateralized debt obligations totaling
$8.9 million, for which the Bank performs a quarterly analysis for other than
temporary impairment due to significantly depressed current market quotes. The
analysis includes stress tests on the underlying collateral and cash flow
estimates based on the current and projected future levels of deferrals and
defaults within each pool. Based on the most recent analysis, the Bank recorded
a total impairment loss of $280 thousand for the third quarter on two of the
four pools.
Capital Levels and Stockholders` Equity
Stockholders` equity increased $37.6 million, or 21.1%, from $178.4 million at
September 30, 2008, to $216.0 million at September 30, 2009, with the issuance
of $71 million in preferred stock to the U.S. Treasury under the Treasury`s
Capital Purchase Program, and a net loss to common stockholders of $39.7 million
over the twelve-month period. In connection with the issuance of the preferred
stock, the Company also issued warrants to purchase an aggregate of 2.7 million
shares of common stock to the Treasury. As a result of this overall increase in
stockholders` equity, the Company`s Tier 1 Capital ratio increased from 10.21%
at September 30, 2008, to 11.53% as of September 30, 2009, and its total
qualifying capital ratio increased from 11.59% to 12.78%. Sequentially, the Tier
1 ratio declined from 12.72% and the total qualifying ratio decreased from
13.97%.
CONFERENCE CALL
Virginia Commerce Bancorp will host a teleconference call for the financial
community on October 27, 2009, at 11:00 a.m. Eastern Daylight Time to discuss
the third quarter 2009 financial results. The public is invited to listen to
this conference call by dialing 866-244-4576 at least 10 minutes prior to the
call.
A replay of the conference call will be available from 12:00 p.m. Eastern
Daylight Time on October 27, 2009, until 11:59 p.m. Eastern Standard Time on
November 3, 2009. The public is invited to listen to this conference call replay
by dialing 888-266-2081 and entering access code 1406981.
ABOUT VIRGINIA COMMERCE BANCORP, INC.
Virginia Commerce Bancorp, Inc. is the parent bank holding company for Virginia
Commerce Bank, a Virginia state chartered bank that commenced operations in May
1988. The Bank pursues a traditional community banking strategy, offering a full
range of business and consumer banking services through twenty-seven branch
offices, one residential mortgage office and one investment services office,
principally to individuals and small-to-medium size businesses in Northern
Virginia and the Metropolitan Washington, D.C. area.
NON-GAAP PRESENTATIONS
This press release refers to the efficiency ratio, which is computed by dividing
non-interest expense by the sum of net interest income on a tax equivalent basis
and non-interest income before losses on OREO. This is a non-GAAP financial
measure that we believe provides investors with important information regarding
our operational efficiency. Comparison of our efficiency ratio with those of
other companies may not be possible because other companies may calculate the
efficiency ratio differently. The Company, in referring to its net income, is
referring to income under accounting principals generally accepted in the United
States, or "GAAP".
FORWARD LOOKING STATEMENTS
This press release may contain forward-looking statements within the meaning of
the Securities and Exchange Act of 1934, as amended, including statements of
goals, intentions, and expectations as to future trends, plans, events or
results of Company operations and policies and regarding general economic
conditions. In some cases, forward-looking statements can be identified by use
of words such as "may," "will," "anticipates," "believes," "expects," "plans,"
"estimates," "potential," "continue," "should," and similar words or phrases.
These statements are based upon current and anticipated economic conditions,
nationally and in the Company`s market, interest rates and interest rate policy,
competitive factors, and other conditions which by their nature, are not
susceptible to accurate forecast, and are subject to significant uncertainty.
Because of these uncertainties and the assumptions on which this discussion and
the forward-looking statements are based, actual future operations and results
may differ materially from those indicated herein. Please refer to our Annual
Report on Form 10-K for the year-ended December 31, 2008, for a discussion of
these factors. Readers are cautioned against placing undue reliance on any such
forward-looking statements. The Company`s past results are not necessarily
indicative of future performance.
Virginia Commerce Bancorp, Inc.
Financial Highlights
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended September 30, Nine months Ended September 30,
2009 2008 % Change 2009 2008 % Change
Summary Operating Results:
Interest and dividend income $ 37,623 $ 40,567 -7.3% $ 112,360 $ 121,030 -7.2%
Interest expense 14,219 18,658 -23.8% 46,199 58,942 -21.6%
Net interest and dividend income 23,404 21,909 6.8% 66,161 62,088 6.6%
Provision for loan losses 49,000 8,300 490.4% 80,813 16,068 402.9%
Non-interest income (7,573) 1,597 -574.2% (3,804) 4,957 -176.7%
Non-interest expense 12,922 11,258 14.8% 39,531 33,256 18.9%
(Loss) income before income taxes (46,091) 3,948 -1267.5% (57,987) 17,721 -427.2%
Net (loss) income $(29,887) $ 2,673 -1218.1% $(37,480) $ 11,742 -419.2%
Effective dividend on preferred stock 1,251 -- N/A 3,288 -- N/A
Net (loss) income available to common stockholders $(31,138) $ 2,673 -1264.9% $(40,768) $ 11,742 -447.2%
Performance Ratios:
Return on average assets -4.34% 0.40% -1.83% 0.61%
Return on average equity -49.33% 5.98% -20.36% 8.91%
Net interest margin 3.52% 3.38% 3.34% 3.34%
Efficiency ratio (1) 52.11% 47.89% 55.42% 49.60%
Per Share Data:
Net (loss) income per common share-basic $(1.17) $0.10 -1270.0% $(1.53) $0.44 -447.7%
Net (loss) income per common share-diluted $(1.17) $0.10 -1270.0% $(1.53) $0.43 -455.8%
Average number of shares outstanding:
Basic 26,694,898 26,566,711 26,691,490 26,550,757
Diluted 26,925,625 27,059,996 26,974,070 27,183,397
As of September 30,
2009 2008 % Change 6/30/09 3/31/09
Selected Balance Sheet Data:
Loans, net $2,154,252 $2,232,779 -3.5% $2,217,945 $2,243,960
Investment securities 369,059 317,862 16.1% 309,090 339,721
Assets 2,734,112 2,661,688 2.7% 2,699,494 2,772,888
Deposits 2,234,804 2,155,842 3.7% 2,191,473 2,239,365
Stockholders` equity 215,994 178,357 21.1% 243,013 249,868
Book value per common share $5.43 $6.71 -19.1% $6.44 $6.70
Capital Ratios:
Tier 1 capital:
Company 11.53% 10.21% 12.72% 12.95%
Bank 11.48% 10.32% 12.68% 13.07%
Total qualifying capital:
Company 12.78% 11.59% 13.97% 14.35%
Bank 12.73% 11.57% 13.93% 14.32%
Tier 1 leverage:
Company 10.21% 9.11% 11.18% 11.31%
Bank 10.17% 9.23% 11.35% 11.44%
Tangible common equity:
Company 5.30% 6.70% 6.37% 6.45%
Bank 10.20% 9.08% 11.34% 11.35%
(1) Computed by dividing non-interest expense by the sum of net interest income on a tax-equivalent basis using a 35% rate and non-interest income before losses on other real estate owned.
As of September 30,
2009 2008 6/30/09 3/31/09
Asset Quality:
Non-performing assets:
Non-accrual loans:
Commercial $ 9,792 $ 9,944 $ 12,259 $ 10,433
Real estate-one-to-four family residential:
Closed end first and seconds 6,846 98 3,843 735
Home equity lines 781 320 494 319
Total Real estate-one-to-four family residential $ 7,627 $ 418 $ 4,337 $ 1,054
Real estate-non-farm, non-residential:
Owner Occupied 9,703 2,511 6,462 6,319
Non-owner occupied 9,152 411 8,460 792
Total Real estate-non-farm, non-residential $ 18,855 $ 2,922 $ 14,922 $ 7,111
Real estate-construction:
Residential-Owner Occupied 2,389 3,981 2,389 5,115
Residential-Builder 36,886 32,701 53,251 67,274
Commercial 9,457 21,710 18,955 34,829
Total Real estate-construction: $ 48,732 $ 58,392 $ 74,595 $ 107,218
Consumer 187 2 23 (2 )
Total Non-accrual loans $ 85,193 $ 71,678 $ 106,136 $ 125,814
OREO 36,402 6,002 28,198 12,455
Total non-performing assets $ 121,595 $ 77,680 $ 134,334 $ 138,269
Loans 90+ days past due and still accruing:
Commercial $ 150 $ 699 $ 251 $ 1,810
Real estate-one-to-four family residential:
Closed end first and seconds -- 165 482 4,032
Home equity lines -- -- -- 184
Total Real estate-one-to-four family residential $ -- $ 165 $ 482 $ 4,216
Real estate-multi-family residential 1,506 -- 1,506 --
Real estate-non-farm, non-residential:
Owner Occupied -- -- -- 363
Non-owner occupied 249 -- 703 8,807
Total Real estate-non-farm, non-residential $ 249 $ -- $ 703 $ 9,170
Real estate-construction:
Residential-Owner Occupied -- -- -- --
Residential-Builder -- 6,693 2,290 8,594
Commercial -- -- -- --
Total Real estate-construction: $ -- 6,693 $ 2,290 $ 8,594
Consumer -- 24 -- --
Total loans 90+ days past due and still accruing $ 1,905 $ 7,581 $ 5,232 $ 23,790
Total non-performing assets and past due loans $ 123,500 $ 85,261 $ 139,566 $ 162,059
Non-performing assets
to total loans: 5.46 % 3.42 % 5.94 % 6.05 %
to total assets: 4.45 % 2.92 % 4.98 % 4.99 %
Non-performing assets and past due loans
to total loans: 5.54 % 3.76 % 6.17 % 7.09 %
to total assets: 4.52 % 3.20 % 5.17 % 5.84 %
Allowance for loan losses to total loans 3.15 % 1.44 % 1.72 % 1.64 %
Allowance for loan losses to non-performing loans 80.50 % 41.17 % 35.00 % 25.06 %
Total allowance for loan loss $ 70,114 $ 32,634 $ 38,978 $ 37,494
Total provisions for loan losses $ 80,813 $ 16,068 $ 31,813 $ 13,390
As of September 30,
2009 2008 6/30/09 3/31/09
Loans 30 to 89 days past due:
Commercial $ 2,728 $ 1,779 $ 3,442 $ 1,999
Real estate-one-to-four family residential:
Closed end first and seconds 2,950 325 6,317 7,120
Home equity lines 42 150 559 89
Total Real estate-one-to-four family residential $ 2,992 $ 475 $ 6,876 $ 7,209
Real estate-multi-family residential -- -- -- 1,506
Real estate-non-farm, non-residential:
Owner Occupied 5,779 1,774 3,932 6,911
Non-owner occupied 16,447 1,787 4,749 8,034
Total Real estate-non-farm, non-residential $ 22,226 $ 3,561 $ 8,681 $ 14,945
Real estate-construction:
Residential-Owner Occupied 829 -- -- 5,470
Residential-Builder 1,554 8,248 -- 11,027
Commercial 336 2,214 -- 13,264
Total real estate-construction: $ 2,719 $ 10,462 $ -- $ 29,761
Farmland -- -- -- --
Consumer 212 149 244 310
Total loans 30 to 89 days past due $ 30,877 $ 16,426 $ 19,243 $ 55,730
Net charge-offs:
Commercial $ 15,350 $ 1,979 $ 3,176 $ 2,097
Real estate-one-to-four family residential:
Closed end first and seconds 1,405 623 1,156 115
Home equity lines 961 162 824 826
Total Real estate-one-to-four family residential $ 2,366 $ 785 $ 1,980 $ 941
Real estate-multi-family residential -- 95 -- --
Real estate-non-farm, non-residential:
Owner Occupied 468 -- 211 211
Non-owner occupied 58 -- -- --
Total Real estate-non-farm, non-residential $ 526 $ -- $ 211 $ 211
Real estate-construction:
Residential-Owner Occupied 702 -- 702 40
Residential-Builder 17,100 2,519 12,896 3,542
Commercial 10,946 -- 10,223 5,509
Total real estate-construction: $ 28,748 $ 2,519 $ 23,821 $ 9,091
Farmland -- -- -- --
Consumer 184 316 122 31
Total net charge-offs $ 47,174 $ 5,694 $ 29,310 $ 12,371
Net charge-offs to average loans outstanding 2.06 % 0.27 % 1.27 % 0.53 %
As of September 30,
2009 2008 % Change 6/30/09 % Change
Loan Portfolio:
Commercial $ 239,895 $ 267,296 -10.3 % $ 259,812 -7.7 %
Real estate-one to four family residential:
Closed end first and seconds 264,398 214,383 23.3 % 236,523 11.8 %
Home equity lines 134,295 114,671 17.1 % 133,176 0.8 %
Total Real estate-one-to-four family residential $ 398,693 $ 329,054 21.2 % $ 369,699 7.8 %
Real estate-multifamily residential 68,002 65,661 3.6 % 69,616 -2.3 %
Real estate-non-farm, non-residential:
Owner Occupied 430,173 416,437 3.3 % 428,372 0.4 %
Non-owner occupied 640,136 586,688 9.1 % 613,825 4.3 %
Total Real estate-non-farm, non-residential $ 1,070,309 $ 1,003,125 6.7 % $ 1,042,197 2.7 %
Real estate-construction:
Residential-Owner Occupied 13,645 22,733 -40.0 % 23,047 -40.8 %
Residential-Builder 235,358 315,723 -25.5 % 259,370 -9.3 %
Commercial 189,431 255,756 -25.9 % 223,916 -15.4 %
Total Real estate-construction: $ 438,434 $ 594,212 -26.2 % $ 506,333 -13.4 %
Farmland 2,678 2,413 10.9 % 2,678 -.04 %
Consumer 10,191 8,477 20.2 % 10,532 -3.2 %
Total loans $ 2,228,202 $ 2,270,238 -1.9 % $ 2,260,867 -1.4 %
Less unearned income 3,836 4,825 -20.5 % 3,944 -2.7 %
Less allowance for loan losses 70,114 32,634 114.8 % 38,978 79.9 %
Loans, net $ 2,154,252 $ 2,232,779 -3.5 % $ 2,217,945 -2.9 %
As of September 30, 2009
Residential, Acquisition, Development and Construction Non-accruals Net charge-
Total Percentage Non-accrual as a % of offs as a % of
By County/Jurisdiction of Origination: Outstandings of Total Loans Outstandings Outstandings
District of Columbia $ 18,993 7.6 % $ -- -- -0.1 %
Montgomery, MD 9,660 3.9 % 3,583 1.4 % 0.9 %
Prince Georges, MD 24,212 9.7 % -- -- 1.9 %
Other Counties in MD 4,879 2.0 % -- -- 0.4 %
Arlington/Alexandria, VA 45,077 18.1 % 5,632 2.3 % --
Fairfax, VA 62,112 24.9 % 11,387 4.6 % 1.2 %
Culpeper/Fauquier 1,025 0.4 % 200 0.1 % 0.1 %
Frederick 13,131 5.3 % 6,750 2.7 % 0.8 %
Henrico, VA -- 0.0 % -- -- 0.1 %
Loudoun, VA 27,436 11.0 % 770 0.3 % 0.3 %
Prince William, VA 12,224 4.9 % 2,951 1.2 % 0.8 %
Spotsylvania, VA 871 0.3 % -- -- --
Stafford, VA 22,421 9.0 % 4,898 2.0 % --
Other Counties in VA 6,852 2.8 % 3,104 1.2 % 0.3 %
Outside VA, MD & DC 110 0.04 % -- -- 0.4 %
$ 249,003 100.0 % $ 39,275 15.8 % 7.1 %
As of September 30, 2009
Commercial, Acquisition, Development and Construction Percentage Non-accruals Net charge-
Total of Non-accrual as a % of offs as a % of
By County/Jurisdiction of Origination: Outstandings Total Loans Outstandings Outstandings
District of Columbia $ 12,798 6.8 % $ -- -- --
Montgomery, MD 1,413 0.7 % -- -- --
Prince Georges, MD 10,374 5.5 % -- -- --
Other Counties in MD 7,749 4.1 % -- -- --
Arlington/Alexandria, VA 9,312 4.9 % -- -- --
Fairfax, VA 15,651 8.3 % -- -- 5.8 %
Henrico, VA 807 0.4 % -- -- --
Loudoun, VA 34,688 18.3 % 7,197 3.8 % --
Prince William, VA 51,805 27.3 % 2,260 1.2 % --
Spotsylvania, VA 10,138 5.4 % -- -- --
Stafford, VA 27,937 14.7 % -- -- --
Other Counties in VA 6,759 3.6 % -- -- --
$ 189,431 100.0 % $ 9,457 5.0 % 5.8 %
As of September 30, 2009
Non-Farm/Non-Residential Non-accruals Net charge-
Total Percentage Non-accrual as a % of offs as a % of
By County/Jurisdiction of Origination: Outstandings of Total Loans Outstandings Outstandings
District of Columbia $ 54,649 5.1 % $ -- -- --
Montgomery, MD 34,057 3.2 % -- -- --
Prince Georges, MD 50,654 4.7 % 1,180 0.01 % --
Other Counties in MD 48,439 4.5 % -- -- --
Arlington/Alexandria, VA 173,479 16.2 % 4,138 0.4 % 0.02 %
Fairfax, VA 261,090 24.4 % 5,088 0.5 % --
Culpeper/Fauquier 1,658 0.2 % -- -- --
Henrico, VA 31,306 2.9 % -- -- --
Loudoun, VA 111,546 10.4 % 1,769 0.2 % 0.02 %
Prince William, VA 187,918 17.6 % 2,888 0.3 % 0.01 %
Spotsylvania, VA 12,868 1.2 % -- -- --
Stafford, VA 22,107 2.1 % -- -- --
Other Counties in VA 70,740 6.6 % 3,792 0.4 % --
Outside VA, MD & DC 9,798 0.9 % -- -- --
$ 1,070,309 100.0 % $ 18,855 1.8 % 0.05 %
Of this total of $1.1 billion in non-farm/non-residential real estate loans, $28.2 million will mature in the fourth quarter of 2009, $48.5 million in 2010, $42.2 million in 2011 and $72.8 million in 2012.
As of September 30,
2009 2008 % Change 6/30/09 % Change
Investment Securities (at book value):
Available-for-sale:
U.S. Government Agency obligations $263,871 $246,619 7.0% $204,896 28.8%
Domestic corporate debt obligations 3,084 4,374 -29.5% 1,864 65.5%
Obligations of states and political subdivisions 42,585 28,545 49.2% 40,219 5.9%
$309,540 $279,538 10.7% $246,979 25.3%
Held-to-maturity:
U.S. Government Agency obligations $ 13,574 $ 19,772 -31.3% $ 15,258 -11.0%
Obligations of states and political subdivisions 45,945 18,552 147.7% 46,853 -1.9%
$ 59,519 $ 38,324 55.3% $ 62,111 -4.2%
Virginia Commerce Bancorp, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share data)
As of September 30,
(Unaudited)
2009 2008
Assets
Cash and due from banks $ 25,760 $ 31,354
Fed funds sold 56,413 --
Interest-bearing deposits with other banks -- 1,184
Securities (fair value: 2009, $370,417; 2008, $318,132) 369,059 317,862
Restricted stocks 11,751 9,276
Loans held-for-sale 2,285 4,547
Loans, net of allowance for loan losses of $70,114 in 2009 and $32,634 in 2008 2,154,252 2,232,779
Bank premises and equipment, net 14,150 13,947
Accrued interest receivable 10,359 11,165
Other real estate owned 36,402 6,002
Other assets 53,681 33,572
Total assets $ 2,734,112 $ 2,661,688
Liabilitiesand Stockholders` Equity
Deposits
Demand deposits $ 228,395 $ 206,527
Savings and interest-bearing demand deposits 891,568 536,620
Time deposits 1,114,841 1,412,695
Total deposits $ 2,234,804 $ 2,155,842
Securities sold under agreement to repurchase and federal funds purchased 185,531 198,009
Other borrowed funds 25,000 50,000
Trust preferred capital notes 65,993 65,736
Accrued interest payable 5,048 7,360
Other liabilities 1,742 6,384
Total liabilities $ 2,518,118 $ 2,483,331
Stockholders` Equity
Preferred stock, net of discount, $1.00 par, 1,000,000 shares authorized, Series A; $1,000.00 liquidation value; 71,000 issued and outstanding $ 63,630 $ --
Common stock, $1.00 par, 50,000,000 shares authorized, issued and outstanding 2009, 26,695,810; 2008, 26,566,711 26,696 26,567
Surplus 96,359 95,678
Warrants 8,520 --
Retained earnings 19,766 59,450
Accumulated other comprehensive income (loss), net 1,023 (3,338 )
Total stockholders` equity $ 215,994 $ 178,357
Total liabilities and stockholders` equity $ 2,734,112 $ 2,661,688
Virginia Commerce Bancorp, Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share data)
(Unaudited)
Three Months Ended Nine months Ended
September 30, September 30,
2009 2008 2009 2008
Interest and dividend income:
Interest and fees on loans $ 33,707 $ 36,329 $ 100,336 $ 108,155
Interest and dividends on investment securities:
Taxable 3,366 3,792 10,523 11,340
Tax-exempt 426 339 1,177 908
Dividend on restricted stocks 97 67 265 259
Interest on deposits with other banks -- 38 -- 140
Interest on federal funds sold 27 2 59 228
Total interest and dividend income $ 37,623 $ 40,567 $ 100 %
(1) Other fresh produce gross profit for the nine months ended September 25, 2009 included charges of $17.1 million recorded during the second quarter of 2009 related to the write-down of growing crop inventory resulting from our decision to discontinue pineapple planting in Brazil.
(2) Banana gross profit for the nine months ended September 26, 2008 included charges of $2.1 million recorded during the second quarter of 2008 related to wages paid to idle workers and write-offs of packaging material inventory incurred as a result of extensive flood damage at our banana farms in Brazil.
Fresh Del Monte Produce Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(U.S. dollars in millions) - (Unaudited)
Nine months ended
September 25, September 26,
2009 2008
Operating activities:
Net income $ 117.6 $ 134.3
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 63.2 62.3
Amortization of debt issuance costs 2.7 1.3
Asset impairment charges 12.5 12.6
Gain on sales of assets (4.3 ) (7.5 )
Foreign currency translation adjustment 9.0 (4.9 )
Other (8.9 ) 7.1
Changes in operating assets and liabilities:
Receivables 67.7 43.0
Inventories 16.0 (20.3 )
Other current assets 4.5 (9.1 )
Accounts payable and accrued expenses (25.9 ) 32.2
Other noncurrent assets and liabilities 15.8 (5.1 )
Net cash provided by operating activities 269.9 245.9
Investing activities:
Capital expenditures (63.2 ) (72.3 )
Proceeds from sales of assets 12.4 16.5
Purchase of subsidiaries, net of cash acquired - (414.1 )
Net cash used in investing activities (50.8 ) (469.9 )
Financing activities:
Net (payments) proceeds on long-term debt (204.7 ) 207.5
Proceeds from stock options exercised 0.7 21.8
Contributions from noncontrolling interests (3.7 ) (4.6 )
Net cash (used in) provided by financing activities (207.7 ) 224.7
Effect of exchange rate changes on cash (0.2 ) (2.5 )
Net increase (decrease) in cash and cash equivalents 11.2 (1.8 )
Cash and cash equivalents, beginning 27.6 30.2
Cash and cash equivalents, ending $ 38.8 $ 28.4
Fresh Del Monte Produce Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(U.S. dollars in millions)
September 25, December 26,
2009 2008
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 38.8 $ 27.6
Trade accounts receivable, net 298.2 348.0
Other accounts receivables, net 46.4 62.0
Inventories 441.2 459.8
Other current assets 49.8 77.2
Total current assets 874.4 974.6
Investment in and advances to unconsolidated companies 8.5 8.0
Property, plant and equipment, net 1,071.5 1,085.2
Goodwill 407.9 401.1
Other noncurrent assets 196.3 182.1
Total assets $ 2,558.6 $ 2,651.0
Liabilities and shareholders' equity
Current liabilities:
Accounts payable and accrued expenses $ 342.7 $ 379.6
Current portion of long-term debt and capital lease obligations 5.4 358.0
Other current liabilities 32.1 36.8
Total current liabilities 380.2 774.4
Long-term debt and capital lease obligations 309.0 154.8
Other noncurrent liabilities 211.8 207.9
Total liabilities 901.0 1,137.1
Total Fresh Del Monte Produce Inc. shareholders' equity 1,634.9 1,496.9
Noncontrolling interests 22.7 17.0
Total shareholders' equity 1,657.6 1,513.9
Total liabilities and shareholders' equity $ 2,558.6 $ 2,651.0
Selected Balance Sheet Data:
Working capital $ 494.2 $ 200.2
Total Debt $ 314.4 $ 512.8
Third Quarter 2009 Business Segment Performance
(As reported in business segment data)
Bananas
Net sales increased 5% to $351.0 million during the quarter. The increase in net
sales was primarily driven by higher sales in the Company`s Middle East, Europe
and Asia-Pacific regions. Volume was in line with the prior year period.
Worldwide pricing increased 4% to $13.75 per unit. These gains were partially
offset by an 8% increase in unit costs, the result of higher fruit procurement
costs. Gross profit decreased $9.6 million to $14.0 million.
Other Fresh Produce
Net sales for the quarter decreased 12% to $311.0 million. The decrease in net
sales was primarily the result of lower sales in the Company`s gold pineapple,
melon and tomato product lines. Volume decreased by 13%, the result of lower
supply of gold pineapple and the Company`s planned reduction of domestic melons.
Gross profit decreased $1.3 million to $44.0 million.
* Gold pineapple - Net sales decreased 15% to $104.0 million. Volume decreased
8% for the quarter. The decline in volume was the result of the previously
announced supply shortages associated with the temporary reduction in volume
sourced from Costa Rica. Pricing decreased 8%, primarily due to consumer-price
sensitivity. Unit cost increased 1%.
* Melon - Net sales decreased 34% to $21.7 million. Volume was 39% lower than
the prior year period. The decline in domestic melon volume was the result of
the Company`s decision to reduce purchases from third-party growers in
California. Pricing increased 8%, with unit cost 8% higher.
* Fresh-cut - Net sales decreased 2% to $82.2 million. Volume was 4% lower.
Pricing increased 2%, with an 8% decrease in unit cost.
* Non-tropical - Net sales decreased 4% to $46.9 million. Volume increased 15%.
Pricing was 16% lower. Unit cost decreased 21%.
* Tomato - Net sales decreased 15% to $26.7 million. Volume decreased 10%.
Pricing decreased 6%. Unit cost decreased 6%.
Prepared Food
Net sales decreased 17% to $85.5 million for the third quarter. The decline in
net sales was largely attributable to challenging economic conditions and the
negative impact of unfavorable exchange rates. Pricing increased by 3%, with a
1% decrease in unit cost. Gross profit for the quarter was $14.0 million,
compared with $13.3 million in the third quarter of 2008.
Other Products and Services
Net sales decreased 57% to $18.8 million, compared to the prior year period, the
result of lower commodity selling prices in the Company`s Argentine grain
business. Gross profit was a loss, in line with the prior year period due to
lower gross profit in the Company`s Argentine grain business, offset by lower
expenses associated with the Company`s third-party shipping operations.
Income Taxes
The income tax benefit recorded in the third quarter was $12.8 million. The
benefit included two large changes in valuation allowances that netted to a tax
benefit of $8.3 million.
Cash Flows for the Nine Months
Net cash provided by operating activities for the first nine months of 2009 was
$269.9 million, compared with $245.9 million in the same period of 2008. The
increase was primarily due to lower accounts receivable and inventory balances,
offset by higher payments for accounts payable and accrued expenses.
Total Debt
Total debt decreased from $512.8 million at the end of 2008 to $314.4 million, a
$198.4 million decrease.
Conference Call and Web Cast Data
Fresh Del Monte will host a conference call and simultaneous web cast at 11:00
a.m. Eastern Time today to discuss the third quarter 2009 results and to review
the Company`s progress and outlook. The Web cast can be accessed on the
Company`s Investor Relations home page at www.freshdelmonte.com. The call will
be available for re-broadcast on the Company`s Web site approximately two hours
after the conclusion of the call.
About Fresh Del Monte Produce Inc.
Fresh Del Monte Produce Inc. is one of the world`s leading vertically integrated
producers, marketers and distributors of high-quality fresh and fresh-cut fruit
and vegetables, as well as a leading producer and distributor of prepared food
in Europe, Africa and the Middle East. Fresh Del Monte markets its products
worldwide under the Del Monte brand, a symbol of product innovation, quality,
freshness and reliability for more than 100 years.
Forward-looking Information
This press release contains certain forward-looking statements regarding the
intent, beliefs or current expectations of the Company or its officers with
respect to the Company`s plans and future performance.These forward-looking
statements are based on information currently available to the Company and the
Company assumes no obligation to update these statements. It is important to
note that these forward-looking statements are not guarantees of future
performance and involve risks and uncertainties. In this press release, these
statements appear in a number of places and include statements regarding the
intent, belief or current expectations of the Company or its officers (including
statements preceded by, followed by or that include the words "believes,"
"expects," "anticipates" or similar expressions).The Company`s plans and
performance may differ materially from those in the forward-looking statements
as a result of various factors, including (i) the uncertain global economic
environment and the timing and strength of a recovery in the markets we serve,
and the extent to which adverse economic conditions continue to affect the
Company`s sales, volume and results, including its ability to command premium
prices for certain of the Company`s principal products, or increase competitive
pressures within the industry, (ii) the impact of governmental initiatives in
the United States and abroad to spur economic activity, including the effects of
significant government monetary or other market interventions on inflation,
price controls and foreign exchange rates, (iii) the Company`s anticipated cash
needs in light of its liquidity and financing plans, (iv) the continued ability
of the Company`s distributors and suppliers to have access to sufficient
liquidity to fund their operations, (v) trends and other factors affecting the
Company`s financial condition or results of operations from period to period,
including changes in product mix or consumer demand for branded products such as
the Company`s, particularly as consumers become more price-conscious in the
current economic environment, as well as anticipated price and expense levels,
the impact of weather on crop quality and yields, the impact of prices for
petroleum based products and the availability of sufficient labor during peak
growing and harvesting seasons, (vi) the Company`s plans for expansion of its
business (including through acquisitions) and cost savings, (vii) the impact of
foreign currency fluctuations, (viii) the impact of pricing and other actions by
our competitors, particularly during periods of low consumer confidence and
spending levels, (ix) the Company`s ability to successfully integrate
acquisitions into its operations, (x) the timing and cost of resolution of
pending legal and environmental proceedings, and (xi) the impact of changes in
tax accounting or tax laws (or interpretations thereof), and the impact of
settlements of adjustments proposed by the Internal Revenue Service or other
taxing authorities in connection with the Company`s tax audits.The Company`s
plans and performance may also be affected by the factors described in Item 1A.
- "Risk Factors" in Fresh Del Monte Produce Inc.`s Annual Report on Form 10-K/A
for the year ended December 26, 2008 along with other reports that the Company
has on file with the Securities and Exchange Commission.
Virginia Commerce Bancorp, Inc.
William K. Beauchesne
Executive Vice President and Chief Financial Officer
703-633-6120
wbeauchesne@vcbonline.com
Copyright Business Wire 2009
