Virginia Commerce Bancorp, Inc. (the “Company”), (Nasdaq: VCBI), parent company of Virginia Commerce Bank (the “Bank”), today reported net income to common stockholders of $7.5 million, or $0.24 per diluted common share, for the second quarter of 2011, compared to net income to common stockholders of $4.3 million, or $0.15 per diluted common share, for the same period in 2010. Increases in non-interest income and lower loan loss provisions drove the year-over-year increase in earnings.
Peter A. Converse, President and Chief Executive Officer, commented, “We are certainly pleased with our earnings performance this quarter. Diluted earnings per common share doubled sequentially from $0.12 the prior quarter to $0.24. Net income to common stockholders experienced a year-over-year increase of 73.3%. Earnings were undoubtedly bolstered by a substantial decrease in loan loss provisioning. Nonetheless, the bottom line also benefited from non-interest income increasing more than 100% year-over-year and from ongoing cost containment efforts resulting in non-interest expense decreasing 1.8% from the same quarter last year.”
“The reserve release this quarter was deemed appropriate by management based on our quarterly analysis of loan loss reserve adequacy, our projection of near-term asset quality trends and the fact that recent charge-offs have been largely covered by specific reserves. That is not to imply that quarterly provisioning will remain at the second quarter level going forward. Rather, provisioning is more likely to range between the first and second quarter levels through the remainder of this year.”
Converse continued, “Sequential asset quality progress was essentially flat for the quarter, with a net decrease of $4.2 million in other real estate owned (“OREO”) mostly offset by a $4.1 million increase in non-accrual loans. Despite the lack of progress in reducing non-performing assets and loans 90+ days past due, it was encouraging that a shift of approximately $16 million in lingering impaired loans to non-accrual resulted in a net increase of only $4.1 million. Second quarter 2011 may represent the peak quarterly volume of remaining impaired loans migrating to non-accrual status. Regarding troubled debt restructurings, our continued aggressive efforts to reduce that category of impaired loans have resulted in a further quarterly reduction of $10.8 million.”