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Virginia Commerce Bancorp, Inc. Reports Strong Fourth Quarter Performance With Full Repurchase Of All TARP Preferred Stock

Virginia Commerce Bancorp, Inc. (the “Company”), (Nasdaq: VCBI), parent company of Virginia Commerce Bank (the “Bank”), today reported its financial results for the fourth quarter and year ended December 31, 2012.

Fourth Quarter 2012 Highlights

  • Repurchased all Preferred Stock Issued Under TARP Capital Purchase Program: The Company repurchased its entire $71.0 million of Preferred Stock issued under the TARP Capital Purchase Program.
  • Net Income Available to Common Stockholders and Earnings per Diluted Common Share: Net income available to common stockholders of $4.2 million, or $0.12 per diluted share, for the fourth quarter of 2012, including a one-time charge of $2.1 million relating to the acceleration of the accretion of the TARP preferred stock discount. This compares to net income available to common stockholders of $5.4 million and $7.1 million for the fourth quarter of 2011, and the third quarter of 2012, respectively.
  • Adjusted Operating Earnings (a non-GAAP measure): Adjusted operating earnings for the fourth quarter of 2012 of $5.3 million, or $0.16 per diluted common share. This compares to $0.17 per diluted common share for both the fourth quarter of 2011, and the third quarter of 2012.
  • Quarterly Return on Average Assets (ROAA) of 1.03% and Return on Average Equity (ROAE) of 10.20%
  • Net Interest Margin Growth: The net interest margin increased to 3.73% for the fourth quarter of 2012, compared to 3.62% in the third quarter of 2012.
  • Loan and Deposit Growth: Total loans grew $42.4 million during the fourth quarter of 2012, representing an annualized growth rate of 7.9%. Demand, savings and interest-bearing demand deposits, grew $51.0 million during the fourth of 2012, representing an annualized growth rate of 13.0%. As of December 31, 2012, non-interest bearing demand deposits represented 18.5% of total deposits.
  • Asset Quality Improved: Non-performing assets and loans 90+ days past due to total assets sequentially decreased $9.3 million, from 1.98% at September 30, 2012, to 1.78% at December 31, 2012. Net charge-offs for the fourth quarter of 2012 were $1.1 million, or 5 basis points of average loans outstanding, as compared to $4.3 million, or 20 basis points for the same quarter last year, and $8.5 million, or 39 basis points, for the prior quarter.
  • Capital Strength and Book Value per Common Share Growth: Tier 1, total qualifying and tier 1 leverage capital ratios were 13.25%, 14.51% and 10.29%, at December 31, 2012, respectively. Tangible common equity improved to 8.69% at December 31, 2012, as compared to 8.08% at September 30, 2012. The book value per common share increased to $7.68 at December 31, 2012, as compared to $7.63 at September 30, 2012.

Year 2012 Highlights

  • Net Income Available to Common Stockholders: Net income available to common stockholders increased to $22.5 million for 2012. This represented an approximately $700 thousand, or 3.2% increase, compared to $21.8 million for 2011. Net income available to common stockholders includes a reduction for an effective dividend on preferred stock of $7.6 million and $5.3 million, for 2012 and 2011, respectively. The effective dividend on preferred stock will not continue into 2013, as the Company repurchased all of its TARP preferred stock during the fourth quarter of 2012.
  • Return on Average Assets (ROAA) of 1.01% and Return on Average Equity (ROAE) of 10.11%
  • Loan and Deposit Growth: Total loans grew $22.6 million to $2.1 billion at December 31, 2012. Demand, savings and interest-bearing demand deposits, grew $105.0 million to $1.6 billion at December 31, 2012.
  • Capital Strength and Book Value per Common Share Growth: Tangible common equity improved to 8.69% at December 31, 2012, from 7.37% at December 31, 2011. The book value per common share increased to $7.68 at December 31, 2012, as compared to $7.17 at December 31, 2011.

Peter A. Converse, President and Chief Executive Officer, commented, “It was most gratifying for the Company to end the year with a strong fourth quarter performance that was capped by our full repayment of TARP. Net income was $7.8 million for the fourth quarter of 2012, up 15.3% over the year ago quarter. Return on average assets and return on average equity were 1.03% and 10.20%, respectively. The net interest margin rebounded nicely from the prior quarter, rising 11 basis points to 3.73%. Loan and deposit growth resumed in the fourth quarter with total loans increasing on a linked quarter basis at an annualized rate of 7.9%, while total deposits grew at an annualized rate of 5.9%. Asset quality experienced notable improvement in the fourth quarter with non-performing assets and loans 90+ days past due to total assets sequentially declining by $9.3 million, the largest quarterly decrease in over a year. Loans 30-89 days past due of $6.1 million as of December 31, 2012, were at their lowest level in three years. Fourth quarter net charge-offs of $1.1 million were down considerably from $8.5 million for the prior quarter and from $4.3 million for the year ago quarter. In fact, quarterly net charge-offs have not been that low since the first quarter of 2008.

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