Virginia Commerce Bancorp, Inc. Reports Continued Progress With Further Earnings Improvement And Reduction In Non-Performing Assets
Virginia Commerce Bancorp, Inc. (the “Company”), (Nasdaq: VCBI), parent company of Virginia Commerce Bank (the “Bank”), today reported net income to common stockholders of $5.7 million, or $0.20 per diluted common share, for the third quarter of 2010, compared with a net loss to common stockholders of $31.1 million, or $1.17 per diluted common share, for the same period in 2009. Lower loan loss provisions and a higher net interest margin drove the year-over-year increase in earnings, while non-performing assets and loans 90+ days past due declined $9.2 million during the quarter.
Peter A. Converse, President and Chief Executive Officer, commented, “We’re delighted to report our fourth consecutive quarter of higher profitability as well as continued reduction in non-performing assets. Net income to common stockholders of $5.7 million and NPAs and loans 90+ days past due of $82.4 million for the quarter ended September 30, 2010, represent a stark contrast to the third quarter of last year when we posted a $31.1 million loss and NPAs and loans 90+ days past due stood at $123.5 million. We have come a long way in the last twelve months and feel confident that the worst is behind us.
“Profitability continues to be driven by strong core operating earnings and lower provisioning expenses relative to year ago periods. Core operating earnings have benefited from the net interest margin rising to the high 3% range where it is expected to remain for the foreseeable future. In turn, quarterly core operating earnings are expected to trend to the $14 million level for the next few quarters as evidenced over the last two quarters and to enhance net income further as credit costs continue to decrease.”
Converse continued, “Aggressive problem asset resolution remains our top priority, with ongoing progress in reducing NPAs indicative of the positive results from these efforts to date. As NPAs ended the quarter at 2.9% of total assets, we remain optimistic on being able to lower them to 2.5% or less by year-end. Despite some market proclivity to aggregate troubled debt restructurings (TDRs) with NPAs, we account for TDRs as a separate set of impaired loans that have been restructured and are performing on an accrual basis. The strong performance of this category supports this approach. The $8.6 million sequential increase in the category is largely due to the restructuring of an $8.2 million relationship, that was and is performing on an accrual basis.”
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