Virginia Commerce Bancorp, Inc. (the “Company”), (Nasdaq: VCBI), parent company of Virginia Commerce Bank (the “Bank”), today reported net income to common stockholders of $5.2 million, or $0.17 per diluted common share, for the third quarter of 2011, compared with a net income to common stockholders of $5.7 million, or $0.20 per diluted common share, for the same period in 2010. Non-performing assets and loans 90+ days past due decreased 25.3% sequentially, from $74.7 million at June 30, 2011, to $55.9 million at the current quarter-end.
Peter A. Converse, President and Chief Executive Officer, commented, “The Company’s third quarter represented a rather well-rounded performance. Net income to stockholders was relatively strong at $5.2 million, asset quality improved markedly across the board, and the resumption of modest loan growth during the third quarter is encouraging.”
“First of all, net income to stockholders of $5.2 million was relatively strong, albeit less, as compared to the prior quarter and the same period last year. The sequential decline was mostly due to a $2.5 million increase in loan loss provisioning expense and a $660 thousand OREO write-down, that were necessary to facilitate transactions resulting in greater quarterly progress in problem loan resolution. Additionally, the higher earnings a year ago included $1.0 million of death benefits received from bank-owned life insurance during that quarter. Secondly, asset quality exhibited meaningful overall improvement in the third quarter. As already indicated, non-performing assets and loans 90+ days past due decreased 25.3% sequentially to $55.9 million, or 1.9% of total assets. Troubled debt restructuring (“TDRs”) declined 13.1%, from $81.1 million at June 30, 2011, to $71.7 million at the end of the third quarter. Loans 30-89 days past due improved to $12.8 million as of September 30, 2011, from $15.1 million the prior quarter. Based on this asset quality improvement, our analysis of current portfolio risk and other asset resolution strategies currently being implemented, we anticipate maintaining a healthy rate of progress in reducing problem assets. Finally, despite various headwinds to loan growth since 2009, we see progress in the modest sequential growth of 0.1% in net loans during the third quarter, which we believe may represent the inflection point after 2½ years of negative growth. Taking into account our current loan pipeline and business development activity, we are cautiously optimistic that we have turned the corner and that loan production will exceed run-off on an ongoing basis."
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