NORFOLK, Va., Jan. 29 /PRNewswire-FirstCall/ -- Heritage Bankshares, Inc. ("Heritage"; the "Company") (OTC Bulletin Board: HBKS), the parent of Heritage Bank (the "Bank"), today announced unaudited financial results for the fourth quarter and full year of 2009.
Net income for the quarter ended December 31, 2009 was $463,000 compared to net income of $67,000 for the fourth quarter of 2008. After the effect of dividends on preferred stock, net income available to common stockholders was $317,000, or $0.14 per diluted share, compared to net income available to common stockholders of $67,000, or $0.03 per diluted share, for the fourth quarter of 2008.
Net income for 2009 was $1,052,000 compared to net income of $662,000 for 2008. After the effect of dividends on preferred stock, net income available to common stockholders for 2009 was $896,000, or $0.39 per diluted share, compared to net income available to common stockholders of $662,000, or $0.29 per diluted share, for 2008.
Net income for 2008 included an after tax gain of $342,000 on the sale of investment securities in the second and third quarters. The Company took the unusual step of selling a large number of securities in the third quarter of 2008 to avoid any potential impairment of these securities from the turbulence in the financial markets existing at that time. There were no gains on the sale of investment securities in 2009.Michael S. Ives, President and CEO of the Company and the Bank, commented: "In this difficult economic environment, we are quite pleased with our results for the fourth quarter. Our net income before preferred stock dividends for the fourth quarter was $463,000, well in excess of our net income of $67,000 for the fourth quarter last year. Furthermore, our asset quality remains excellent, with nonperforming assets of only 0.11% of assets. "Several years ago, many community banks grew their real estate loan portfolios rapidly through aggressive lending practices. Many of these loans had little or no actual equity in the underlying transactions and involved high loan-to-value ratios with the calculations of value based on wildly optimistic assumptions. Absent rare circumstances such as borrowers with exceptional liquidity or substantial core deposits with our Bank, we did not compete for these types of loans. As a result, growth in our loan portfolio has been limited over the past several years. Our patience and restraint have been rewarded with strong asset quality in the midst of a severe recession.