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."

Converse continued, “Our confidence in being able to sustain earnings and asset quality progress is high and, as a result, based upon preliminary projections, we expect to be able to pay off TARP from earnings. We currently intend to do so before the dividend rate increases from 5% to 9% in the fourth quarter of 2013. Accordingly, we do not anticipate pursuing a capital raise for the foreseeable future and will provide more clarity on the timeframe for TARP repayment through earnings following year-end. The repayment process is subject to regulatory approval and is not likely to start until the end of the second quarter of 2012 at the earliest.”

Converse concluded, “We were among the many community banks not approved for participation in the Small Business Lending Program. While we felt that participation in the Program would have been beneficial, the non-participation in no way affects our inclination to earn our way out of TARP. We had a positive SBLF recommendation from our regulators, and are at a loss to understand the Treasury’s rationale for the decline. As was the case with many other banks not approved for SBLF, the reasons were not made clear. Given our progress in earnings and asset quality improvement since we made application earlier this year, we anticipate timing and stale information may have played a role. To formally conclude the application process, we withdrew our application.”

SUMMARY REVIEW OF FINANCIAL PERFORMANCE

Net Income

For the three months ended September 30, 2011, the Company recorded net income of $6.6 million. After an effective dividend of $1.3 million to the U.S. Treasury on the Company’s TARP preferred stock, the Company reported net income to common stockholders of $5.2 million, or $0.17 per diluted common share, compared to net income to common stockholders of $5.7 million, or $0.20 per diluted common share, in the third quarter of 2010. For the nine months ended September 30, 2011, the Company reported net income to common stockholders of $16.4 million, or $0.53 per diluted common share, compared to net income to common stockholders of $13.2 million, or $0.46 per diluted common share, for the same period in 2010. The higher earnings reported for the three months ended September 30, 2010, were largely attributable to $1.0 million of death benefits received from bank-owned life insurance during that quarter. Earnings improvement for the nine-month period ended September 30, 2011, as compared to the same period in 2010, was attributable to lower provisions for loan losses, higher net interest margins and non-interest expense reduction.

Adjusted operating earnings for the three months ended September 30, 2011, were $14.3 million, down $321 thousand, or 2.2%, compared to $14.6 million for the three months ended September 30, 2010. On a sequential basis, adjusted operating earnings were down $161 thousand for the three months ended September 30, 2011. The Company calculates adjusted operating earnings by excluding taxes, provisions for loan losses, losses on other real estate owned, gains on sale of securities, death benefits received from bank owned life insurance, and impairment losses on securities.

Asset Quality and Provisions For Loan Losses

Provisions for loan losses were $3.9 million for the quarter ended September 30, 2011, compared to $5.1 million in the same period in 2010, with total net charge-offs of $7.7 million in the third quarter of 2011 versus $4.7 million for the same period a year ago. For the nine months ended September 30, 2011, provisions for loan losses totaled $11.2 million, compared to $13.5 million for the prior year period, with 2011 year-to-date net charge-offs of $24.2 million, up $8.3 million, from $15.9 million in the nine months ended September 30, 2010. Charge-offs during the quarter included $4.0 million in partial write-downs of five residential acquisition and development loans to reduce the book balance to estimated liquidation value, a $900 thousand write-down to facilitate the sale of a commercial acquisition and development loan, charge-offs of $1.9 million for three non-farm, non-residential loans prior to implementing a deed in lieu of foreclosure and foreclosing after a bankruptcy stay was lifted, a $340 thousand short-sale of a one-to-four family residential mortgage and an $840 thousand write-down of commercial and industrial loans pursuant to a forbearance and settlement agreement. Charge-offs of $7.4 million were supported by specific reserves.

Total non-performing assets and loans 90+ days past due declined from $82.4 million at September 30, 2010, to $55.9 million at September 30, 2011, and decreased $18.9 million sequentially, from $74.7 million at June 30, 2011. The Company’s sequential improvement in non-performing assets and loans 90+ days past due was facilitated by $7.9 million in charge-offs, a $660 thousand write-down upon the sale of other real estate owned, $8.6 million in proceeds from the sale of non-performing loans or other real estate owned, $1.2 million in net upgrades of loans to performing status and $515 thousand in recoveries of loans previously charged-off.

Non-performing loans continue to be concentrated in residential and commercial construction and land development loans in outer sub-markets hardest hit by the residential downturn and commercial and consumer credits experiencing the after shocks in sub-contracting businesses and workforce employment. Overall, as of September 30, 2011, $26.3 million, or 58.6%, of non-performing loans represented acquisition, development and construction (“ADC”) loans, $5.0 million, or 11.2%, represented loans on one-to-four family residential properties, $7.6 million, or 16.9%, represented non-farm, non-residential loans, and $5.5 million, or 12.2%, represented commercial and industrial (“C&I”) loans. As of September 30, 2011, the allowance for loan losses represented 2.30% of total loans, down from 2.47% at June 30, 2011, with such allowance covering 108.6% of total non-performing loans.

Included in the loan portfolio at September 30, 2011, are loans classified as troubled debt restructurings (“TDRs”) totaling $71.7 million, a sequential reduction of 13.1%, or $9.4 million, from $81.1 million at June 30, 2011. These are performing, accruing loans that represent relationships for which a modification to the contractual interest rate or repayment structure has been granted to address a financial hardship. These loans make up 3.3% of the total loan portfolio at September 30, 2011, and represent $22.9 million in ADC loans, $35.1 million in non-farm, non-residential real estate loans, $9.5 million in C&I loans and $4.2 million in one-to-four family residential loans. At September 30, 2011, 47.0% of the Company’s TDRs were reviewable TDRs and 53.0% were permanent TDRs. Reviewable TDRs are loans that have been restructured at or will return to a market rate of interest and can include a temporary interest rate modification, partial deferral of interest or principal or an extension of term. They can return to performing status upon six months of on-time payments following the return to a market rate of interest, but only in the fiscal year following the year of restructure. Permanent TDRs are loans that have been restructured and include a permanent interest rate reduction. They remain in a TDR status until the loan is paid off. The sequential reduction in TDRs was attributable to payoffs and principal curtailments of $5.1 million, upgrades to performing status of $4.3 million and transfers to non-accrual of $1.0 million offset by $1.0 million of new TDR additions.

Net Interest Income

Net interest income of $26.7 million for the third quarter of 2011 was down $452 thousand, or 1.7%, over the same quarter last year, due primarily to a decrease in the net interest margin from 3.96% in the third quarter of 2010 to 3.85% for the third quarter 2011. Interest expense decreased $2.0 million for the quarter ended September 30, 2011, from the same period in 2010 and decreased $6.6 million for the nine months ended September 30, 2011, compared to 2010. The Company expects that interest expense will decline further in the fourth quarter of 2011 as interest rates were lowered in late September by an average of 15 basis points on approximately $1 billion in transaction accounts. Reductions in interest expense partially offset the decrease in interest and fee income on loans of $2.4 million for the three-months ended September 30, 2011, as compared to the same period in 2010. Year-to-date interest and fee income on loans decreased $5.0 million, as compared to the same period in 2010. The decline in interest and fee income on loans from 2010 to 2011 is attributable to decreases in average outstanding loan balances of $2.5 million for the three months and $81.0 million for the nine months ended September 30, 2011, as compared to the same periods in 2010. Year-to-date net interest income of $79.7 million was up 1.9%, compared to $78.2 million in 2010. On a sequential basis, the net interest margin was down fourteen basis points due primarily to decreased average loans and higher balances in lower earning assets during the third quarter of 2011. The increase in the net interest margin for the nine months ended September 30, 2011, compared to the same period in 2010, was primarily driven by lower deposit costs due to significant reductions in the level of time deposits, increased levels of demand deposits and lower rate interest-bearing transaction accounts. Management anticipates the net interest margin will range between 3.70% and 3.85% for the remainder of 2011.

Non-Interest Income

For the three months ended September 30, 2011, the Company recognized $1.9 million in non-interest income, compared to $3.1 million for the three months ended September 30, 2010. For the nine months ended September 30, 2011, the Company recognized non-interest income of $5.7 million compared to $4.8 million for the same period in 2010. Non-interest income for the third quarter of 2010 included $1.0 million in bank-owned life insurance death benefits. Fees and net gains on loans held for sale increased $210 thousand during the third quarter of 2011 from the second quarter of 2011, and increased by $62 thousand for the nine months ended September 30, 2011, from the same period last year.

Non-Interest Expense

Non-interest expense decreased $418 thousand, or 2.7%, from $15.3 million in the third quarter of 2010, to $14.9 million in the third quarter of 2011, and was down $943 thousand, or 2.1%, from $44.8 million for the nine months ended September 30, 2010, to $43.9 million year-to-date 2011. Compared to the second quarter of 2011, non-interest expense increased $373 thousand during the third quarter of 2011. The majority of the year-over-year decreases in non-interest expense were due to lower FDIC insurance premiums and lower losses on other real estate owned. The efficiency ratio declined slightly from 49.3% in the third quarter of 2010 to 49.4% in the third quarter of 2011.

Investment Securities

Investment securities increased $221.7 million, or 58.2%, year-over-year to $602.6 million at September 30, 2011, and were up $91.5 million sequentially from June 30, 2011. U.S. Government agency securities, including mortgage-backed securities (MBS) and collateralized mortgage obligations (CMOs) comprised a majority of the increases. The portfolio contains four pooled trust preferred securities with an amortized cost basis of $9.6 million for which the Bank performs a quarterly analysis for other than temporary impairment due to significantly depressed current market quotes. The analysis includes stress tests on the underlying collateral and cash flow estimates based on the current and projected future levels of deferrals and defaults within each pool. Since the first quarter of 2009, the Bank has recorded an aggregate impairment loss of $4.2 million on three of the four pools. There was no recorded impairment loss for the third quarter of 2011. The increase of $221.7 million in investment securities was due to investing excess funds provided by increases in deposits, repurchase agreements and stockholder’s equity, combined with the run-off of loan balances and funds provided by the decrease in other asset balances. Investments were made in short term, average life pass-through securities, generally of three to four years or less. This strategy positions the Bank to maintain a constant flow of funds to support future loan growth and to provide repricing opportunities if rates begin to rise.

Loans

Loans, net of allowance for loan losses, decreased $81.0 million, or 3.7%, from $2.18 billion at September 30, 2010, to $2.10 billion at September 30, 2011. ADC loans fell by $51.8 million, or 13.8%, non-farm, non-residential real estate loans decreased $13.2 million, or 1.2%, and one-to-four family residential loans decreased $35.9 million, or 8.5%, while C&I loans increased $21.7 million, or 10.5%. Sequentially, net loans were up $2.1 million, or 0.1% as declines in ADC loans of $5.8 million, C&I loans of $3.4 million and multi-family residential loans of $13.2 million were offset by growth of $22.7 million in non-farm, non-residential real estate loans including $11.5 million in owner-occupied. Year-over-year loan production has been negatively impacted by a lower demand for credit in both the business and consumer sectors as cautious borrowers await clearer economic signs, run-off in both commercial and residential mortgage loans due to aggressive interest rate competition and a strategic decision to restrict ADC lending and focus on greater portfolio diversification as well as deposit generation and non-credit products. Lending efforts are being directed toward building greater market share in commercial lending, including non-farm, non-residential owner-occupied real estate loans, and particularly in sectors forecast for growth such as government contract lending, professional practices and associations and select service industries, with strategic hiring, marketing campaigns and call efforts. Year-over-year and sequential loan production reflect progress in executing this strategy.

Deposits

For the twelve months ended September 30, 2011, deposits increased $45.5 million, or 2.0%, to $2.37 billion, with demand deposits increasing $119.8 million, or 44.4%, savings and interest-bearing demand deposits decreasing by $36.4 million, or 3.0%, and time deposits falling $37.9 million, or 4.6%. Sequentially, deposits rose $115.2 million, or 5.1%, with demand deposits increasing by $96.4 million, or 32.9%, savings and interest-bearing demand accounts growing $5.3 million, or 0.5%, and time deposits increasing by $13.4 million, or 1.7%. The annual and sequential increases are impacted by a temporary influx of approximately $71.0 million in demand deposits that are expected to flow back out in the fourth quarter of 2011. The vast majority of these non-interest deposits in excess of historical average are held and earmarked for auction by a longstanding client that invests and trades in U.S. energy markets. Demand deposit growth remains the top deposit priority, with the increase in demand deposits primarily due to the successful efforts of the Company’s team of eight business development officers, who are focused on acquisition and retention of commercial operating funds, treasury management services and other related cross-sales. At September 30, 2011, the Bank had no brokered certificates of deposit, down from $30.0 million at September 30, 2010.

Capital Levels and Stockholders’ Equity

On March 31, 2011, the Company issued 426,000 shares of its common stock at a price of $5.87 per share in a registered direct placement with a Company director for total gross proceeds of approximately $2.5 million. In addition, the Company issued to the investor, warrants exercisable for shares of common stock, which, if fully exercised, would provide an additional $4.8 million in gross proceeds to the Company. The warrants each have an exercise price of $5.62 per share. The Series A warrants, exercisable for a total of 426,000 shares of common stock, are exercisable for a period of seven months following the closing date. The Series B warrants, also exercisable for a total of 426,000 shares of common stock, are exercisable for a period of twelve months following the closing date.

On September 29, 2010, the Company issued 1,904,766 shares of its common stock at a price of $5.25 per share in a registered direct placement with several institutional investors for total gross proceeds of $10.0 million. In addition, the Company issued to the investors warrants exercisable for shares of common stock. The warrants each have an exercise price of $6.00 per share, which represents a 14.3% premium to the offering price of the shares of common stock sold in the registered direct placement. The Series A warrants were exercisable through April 30, 2011, and 130,851 were exercised as of that date. The 952,383 Series B warrants originally were to expire on September 29, 2011, but on September 27, 2011, the expiration date of 904,764 of the Series B Warrants was extended to January 27, 2012, with 47,619 warrants having been exercised prior to the warrant extension.

Stockholders’ equity increased $28.5 million, or 11.6%, from $247.0 million at September 30, 2010, to $275.5 million at September 30, 2011, with approximately $3.5 million in net proceeds from the above referenced stock issuances, net income to common stockholders of $19.6 million over the twelve-month period, a $2.5 million increase in other comprehensive income related to the investment securities portfolio, $1.7 million in the accretion of the discount on preferred stock and $1.1 million in proceeds and tax benefits related to the exercise of options by the Company’s directors and officers, and stock option expense credits. As a result of these changes, the Company’s Tier 1 capital ratio increased from 12.96% at September 30, 2010, to 14.46% at September 30, 2011, its total qualifying capital ratio increased from 14.21% to 15.71% and its tangible common equity ratio increased from 6.39% to 7.17%. Sequentially, the Company’s Tier 1 and total qualifying capital ratios are each up 11 basis points, and its tangible common equity ratio is down 1 basis point due to higher levels of tangible assets at September 30, 2011.

CONFERENCE CALL

The Company will host a teleconference call for the financial community on October 19, 2011, at 11:00 a.m. Eastern Daylight Time to discuss the third quarter 2011 financial results. The public is invited to listen to this conference call by dialing 866-814-8482 at least 10 minutes prior to the call.

A replay of the conference call will be available from 2:00 p.m. Eastern Daylight Time on October 19, 2011, until 11:59 p.m. Eastern Daylight Time on October 26, 2011. The public is invited to listen to this conference call replay by dialing 888-266-2081 and entering access code 1554457.

ABOUT VIRGINIA COMMERCE BANCORP, INC.

Virginia Commerce Bancorp, Inc. is the parent bank holding company for Virginia Commerce Bank, a Virginia state chartered bank that commenced operations in May 1988. The Bank pursues a traditional community banking strategy, offering a full range of business and consumer banking services through twenty-eight branch offices, one residential mortgage office and one wealth management services office, principally to individuals and small-to-medium size businesses in Northern Virginia and the Metropolitan Washington, D.C. area.

NON-GAAP PRESENTATIONS

The Company prepares its financial statements under accounting principles generally accepted in the United States, or “GAAP”. However, this press release also refers to certain non-GAAP financial measures that we believe, when considered together with GAAP financial measures, provide investors with important information regarding our operational performance. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

Adjusted operating earnings is a non-GAAP financial measure that reflects net income excluding taxes, loan loss provisions, gains or losses on other real estate owned, impairment losses on securities, gain on sale of securities and death benefits received from bank owned life insurance. These excluded items are difficult to predict and we believe that adjusted operating earnings provides the Company and investors with a valuable measure of the Company’s operational performance and a valuable tool to evaluate the Company’s financial results. Calculation of adjusted operating earnings for the three months ended September 30, 2011, September 30, 2010, and June 30, 2011 is as follows:
             

Three Months EndedSeptember 30,

Three MonthsEndedJune 30,
(in thousands)   2011     2010       2011  
 
Net Income $ 6,566 $ 6,958 $ 8,836
Adjustments to net income:
Provision for loan losses 3,933 5,100 1,434
Loss on other real estate owned 546 713 320
Impairment loss on securities -- -- --
Gain on sale of securities -- -- --
Provision for income taxes 3,277 2,917 4,254
Death benefits received from bank owned life insurance -- (1,045 ) (361 )
 
Adjusted Operating Earnings $ 14,322 $ 14,643 $ 14,483
 

The adjusted efficiency ratio is a non-GAAP financial measure that is computed by dividing non-interest expense, excluding gains or losses on other real estate owned, by the sum of net interest income on a tax equivalent basis and non-interest income before impairment losses on securities, gain on sale of securities and death benefits received from bank owned life insurance. We believe that this measure provides investors with important information about our operating efficiency. Comparison of our adjusted efficiency ratio with those of other companies may not be possible because other companies may calculate the adjusted efficiency ratio differently. Calculation of the adjusted efficiency ratio for the three months and nine months ended September 30, 2011 and September 30, 2010 is as follows:
             
(in thousands)

Three Months EndedSeptember 30,
 

Nine Months EndedSeptember 30,
  2011       2010       2011       2010  
Summary Operating Results:    
Non-interest expense $ 14,347 $ 14,598 $ 42,841 $ 42,115
 
Net interest income 26,729 27,181 79,700 78,218
Non-interest income 1,940 3,105 5,672 4,800
Impairment loss on securities -- -- 732 1,519
Gain on sale of securities -- -- (503 ) (139 )
Death benefits received from bank owned life insurance -- (1,045 ) (361 ) (1,045 )
 
Total (1) $ 28,669 $ 29,241 $ 85,240 $ 83,353
 
Efficiency Ratio, adjusted 49.4 % 49.3 % 49.6 % 49.9 %
 

(1)
 

Tax Equivalent Income of $29,048 for the three months ended September 30, 2011 and $86,394 for the nine months ended September 30, 2011. Tax Equivalent Income of $30,657 for the three months ended September 30, 2010 and $85,402 for the nine months ended June 30, 2011.

The tangible common equity ratio is a non-GAAP financial measure representing the ratio of tangible common equity to tangible assets. Tangible common equity and tangible assets are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible common equity for the Company by excluding the balance of intangible assets and outstanding preferred stock issued to the U.S. Treasury from total stockholders’ equity. We calculate tangible assets by excluding the balance of intangible assets from total assets. We had no intangible assets for the periods presented. We believe that this is consistent with the treatment by regulatory agencies, which exclude intangible assets from the calculation of regulatory capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our capital position and ratios. However, these non-GAAP financial measures are supplemental and are not substitutes for an analysis based on a GAAP measure. As other companies may use different calculations for non-GAAP measures, our presentation may not be comparable to other similarly titled measures reported by other companies. Calculation of the Company’s tangible common equity ratio as of September 30, 2011, September 30, 2010, June 30, 2011 and March 31, 2011 is as follows:
             
(in thousands) As of September 30, June 30, March 31,
  2011       2010       2011       2011  
Tangible common equity:    
Total stockholders’ equity $ 275,546 $ 247,012 $ 267,124 $ 253,373
 
Less:
Outstanding TARP senior preferred stock 66,794 65,082 66,334 65,873
Intangible assets -- -- -- --
Tangible common equity $ 208,752 $ 181,930 $ 200,790 $ 187,500
 
Total tangible assets $ 2,942,323 $ 2,846,003 $ 2,797,775 $ 2,783,633
 
Tangible common equity ratio 7.17 % 6.39 % 7.18 % 6.74 %
 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Securities and Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies, including but not limited to our outlook on earnings, including our future net interest margin, and statements regarding asset quality, , our loan and investment security portfolios, projected growth, capital position, capital strategies, our plans regarding and expected future levels of our non-performing assets, business opportunities in our markets, and general economic conditions. When we use words such as “may”, “will”, “anticipates”, “believes”, “expects”, “plans”, “estimates”, “potential”, “continue”, “should”, and similar words or phrases, you should consider them as identifying forward-looking statements. These forward-looking statements are not guarantees of future performance. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast, and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this release and the forward-looking statements are based, actual future operations and results may differ materially from those indicated herein. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company’s past results are not necessarily indicative of future performance. For additional information regarding factors that could affect the Company's operations and results, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, and other reports filed with and furnished to the Securities and Exchange Commission.
 
Virginia Commerce Bancorp, Inc.
Financial Highlights
(Dollars in thousands, except per share data)
(Unaudited)
 
 
      Three Months Ended September 30,   Nine Months Ended September 30,
  2011       2010     % Change   2011       2010       % Change
Summary Operating Results:          
Interest and dividend income $ 35,403 $ 37,832 -6.4 % $106,558 $ 111,720 -4.6 %
Interest expense 8,674 10,651 -18.6 % 26,858 33,502 -19.8 %
Net interest income 26,729 27,181 -1.7 % 79,700 78,218 1.9 %
Provision for loan losses 3,933 5,100 -22.9 % 11,210 13,538 -17.2 %
Non-interest income 1,940 3,105 -37.5 % 5,672 4,800 18.2 %
Non-interest expense 14,893 15,311 -2.7 % 43,863 44,806 -2.1 %
Income before income taxes 9,843 9,875 -0.3 % 30,299 24,674 22.8 %
Net income $ 6,566 $ 6,958 -5.6 % $ 20,368 $ 16,998 19.8 %
Effective dividend on preferred stock 1,349 1,250 7.9 % 4,012 3,752 6.9 %
Net income available to common stockholders $ 5,217 $ 5,708 -8.6 % $ 16,356 $ 13,246 23.5 %
 
Performance Ratios:
Return on average assets 0.91 % 0.97 % 0.97 % 0.81 %
Return on average equity 9.61 % 11.66 % 10.48 % 9.92 %
Net interest margin 3.85 % 3.96 % 3.95 % 3.88 %
Efficiency ratio, adjusted 49.4 % 49.3 % 49.6 % 49.9 %
 
Per Share Data:
Earnings per common share-basic $ 0.18 $ 0.21 -14.3 % $0.55 $ 0.49 12.2 %
Earnings per common share-diluted $ 0.17 $ 0.20 -15.0 % $0.53 $ 0.46 15.2 %
Average number of shares outstanding:
Basic 29,746,581 27,599,007 29,557,306 27,159,404
Diluted 30,866,862 28,893,969 30,656,489 28,486,251
 
 
 
As of September 30,      
  2011       2010     % Change   06/30/11       3/31/11  
Selected Balance Sheet Data:
Loans, net $ 2,097,042 $ 2,178,034 -3.7 % $ 2,094,949 $ 2,122,309
Investment securities 602,565 380,915 58.2 % 511,052 417,071
Assets 2,942,323 2,846,003 3.4 % 2,797,775 2,783,633
Deposits 2,368,939 2,323,478 2.0 % 2,253,742 2,256,970
Stockholders’ equity 275,546 247,012 11.6 % 267,124 253,373
Book value per common share $ 6.89 $ 6.09 13.1 % $ 6.62 $ 6.18
 
Capital Ratios (% of risk weighted assets):
Tier 1 capital:
Company 14.46 % 12.96 % 14.35 % 13.96 %
Bank 14.17 % 12.55 % 13.99 % 13.57 %
Total qualifying capital:
Company 15.71 % 14.21 % 15.60 % 15.21 %
Bank 15.42 % 13.80 % 15.24 % 14.82 %
Tier 1 leverage:
Company 11.60 % 10.84 % 11.67 % 11.48 %
Bank 11.39 % 10.52 % 11.41 % 11.16 %
Tangible common equity:
Company 7.17 % 6.39 % 7.18 % 6.74 %
 

               
As of September 30,        
(Dollars in thousands)   2011       2010     06/30/11       3/31/11  
 
Asset Quality:
Non-performing assets:
Non-accrual loans:
Commercial $ 5,486 $ 5,176 $ 4,932 $ 5,622
Real estate-one-to-four family residential:
Permanent first and second 1,960 6,554 1,982 2,781
Home equity loans and lines   3,051     724     2,990     3,325  
Total real estate-one-to-four family residential $ 5,011 $ 7,278 $ 4,972 $ 6,106
Real estate-multi-family residential 486 -- 495 --
Real estate-non-farm, non-residential:
Owner-occupied 3,689 5,251 6,516 8,016
Non-owner-occupied   3,878     1,204     7,831     1,988  
Total real estate-non-farm, non-residential $ 7,567 $ 6,455 $ 14,347 $ 10,004
Real estate-construction:
Residential-builder 20,181 31,138 25,393 24,234
Commercial   6,083     6,861     8,586     8,625  
Total real estate-construction $ 26,264 $ 37,999 $ 33,979 $ 32,859
Consumer   22     110     18     18  
Total non-accrual loans 44,836 57,018 58,743 54,609
OREO   10,377     24,395     14,690     18,879  
Total non-performing assets $ 55,213 $ 81,413 $ 73,433 $ 73,488
 
Loans 90+ days past due and still accruing:
Commercial $ 89 $ 149 $ -- $ --
Real estate-one-to-four family residential:
Permanent first and second -- -- -- --
Home equity loans and lines   --     369     --     --  
Total real estate-one-to-four family residential $ -- $ 369 $ -- $ --
Real estate-multi-family residential -- -- -- --
Real estate-non-farm, non-residential:
Owner-occupied -- 361 -- 25
Non-owner-occupied   --     --     350     --  
Total real estate-non-farm, non-residential $ -- $ 361 $ 350 $ 25
Real estate-construction:
Residential-owner-occupied -- -- 393 --
Residential-builder 574 -- 564 --
Commercial   --     --     --     --  
Total real estate-construction $ 574 $ -- $ 957 $ --
Consumer   --     100     --     --  
Total loans 90+ days past due and still accruing $ 663 $ 979 $ 1,307 $ 25
 
Total non-performing assets and past due loans $ 55,876 $ 82,392 $ 74,740 $ 73,513
 
Troubled debt restructurings $ 71,686 $ 105,617 $ 81,070 $ 91,876
 
Non-performing assets
to total loans: 2.57 % 3.63 % 3.41 % 3.37 %
to total assets: 1.88 % 2.86 % 2.62 % 2.64 %
Non-performing assets and past due loans
to total loans: 2.60 % 3.67 % 3.47 % 3.37 %
to total assets: 1.90 % 2.90 % 2.67 % 2.64 %
Allowance for loan losses to total loans 2.30 % 2.80 % 2.47 % 2.59 %
Allowance for loan losses to non-performing loans 108.58 % 108.24 % 88.62 % 103.35 %
 
Total allowance for loan losses $ 49,405 $ 62,776 $ 53,217 $ 56,465
 
 
As of September 30,        
(Dollars in thousands)   2011       2010     06/30/11       3/31/11  
 
Loans 30 to 89 days past due
Commercial $ 671 $ 1,237 $ 1,812 $ 1,063
Real estate-one-to-four family residential:
Permanent first and second 1,761 1,813 2,815 2,376
Home equity loans and lines   99     786     339     89  
Total real estate-one-to-four family residential $ 1,860 $ 2,599 $ 3,154 $ 2,465
Real estate-multi-family residential -- -- -- 495
Real estate-non-farm, non-residential:
Owner occupied 3,582 12,463 4,908 --
Non-owner-occupied   6,072     174     4,688     5,940  
Total real estate-non-farm, non-residential $ 9,654 $ 12,637 $ 9,596 $ 5,940
Real estate-construction:
Residential-owner-occupied -- -- -- --
Residential-builder 573 1,372 574 378
Commercial   --     --     --     --  
Total real estate-construction $ 573 $ 1,372 $ 574 $ 378
Consumer 43 36 35 63
Farmland   --     --     --     --  
Total loans 30 to 89 days past due $ 12,801 $ 17,881 $ 15,171 $ 10,404
 

For nine months endedSeptember 30,

For sixmonthsended
   

For threemonthsended
  2011       2010     06/30/11       3/31/11  
 
Net charge-offs
Commercial $ 1,559 $ 3,919 $ 869 $ 395
Real estate-one-to-four family residential:
Permanent first and second 2,101 2,368 1,777 1,597
Home equity loans and lines   769     77     766     729  
Total real estate-one-to-four family residential $ 2,870 $ 2,445 $ 2,543 $ 2,326
Real estate-multi-family residential -- -- -- --
Real estate-non-farm, non-residential:
Owner-occupied 171 1,350 52 54
Non-owner-occupied   6,267     1,479     4,577     1,530  
Total real estate-non-farm, non-residential $ 6,438 $ 2,829 $ 4,629 $ 1,584
Real estate-construction:
Residential-owner-occupied -- 368 -- --
Residential-builder 5,796 6,361 1,830 910
Commercial   7,494     (233 )   6,595     6,595  
Total real estate-construction $ 13,290 $ 6,496 $ 8,425 $ 7,505
Consumer 90 225 36 10
Farmland   --     --     --     --  
Total net charge-offs $ 24,247 $ 15,914 $ 16,502 $ 11,820
Net charge-offs to average loans outstanding 1.11 % 0.70 % 0.75 % 0.54 %
 
Total provision for loan losses $ 11,210 $ 13,538 $ 7,277 $ 5,843
 

         
Troubled Debt Restructurings (TDRs) -

By Loan Type
As of September 30, 2011 Reviewable TDRs Permanent TDRs Total TDRs

# ofLoans
  Balance  

As % ofBalance

# ofLoans
  Balance  

As % ofBalance

# ofLoans
  Balance  

As % ofBalance
Loan Type:            
Commercial 2 $ 3,125 9.3 % 4 $ 6,371 16.8 % 6 $ 9,496 13.2 %
Real estate-one-to-four family residential:
Permanent first and second 10 2,699 8.0 % 3 1,500 3.9 % 13 4,199 5.9 %
Home equity loans and lines --   -- 0.0 % --   -- 0.0 % --   -- 0.0 %
Total real estate-one-to-four family residential 10 $ 2,699 8.0 % 3 $ 1,500 3.9 % 13 $ 4,199 5.9 %
Real estate-multi-family residential -- -- 0.0 % -- -- 0.0 % 0 $ 0 0.0 %
Real estate-non-farm, non-residential:
Owner-occupied 3 1,620 4.8 % 1 2,752 7.2 % 4 4,372 6.1 %
Non-owner-occupied 7   25,730 76.4 % 2   4,949 13.0 % 9   30,679 42.8 %
Total real estate-non-farm, non-residential 10 $ 27,350 81.2 % 3 $ 7,701 20.3 % 13 $ 35,051 48.9 %
Real estate-construction:
Residential-owner-occupied -- -- 0.0 % -- -- 0.0 % -- -- 0.0 %
Residential-builder -- -- 0.0 % 4 7,027 18.5 % 4 7,027 9.8 %
Commercial 1   465 1.4 % 4   15,416 40.6 % 5   15,881 22.2 %
Total real estate-construction 1 $ 465 1.4 % 8 $ 22,443 59.0 % 9 $ 22,908 32.0 %
Consumer 2 32 0.1 % -- -- 0.0 % 2 32 0.0 %
Farmland --   -- 0.0 % --   -- 0.0 % --   -- 0.0 %
Total 25 $ 33,671 100.0 % 18 $ 38,015 100.0 % 43 $ 71,686 100.0 %
 
         
Troubled Debt Restructurings (TDRs) -

By Quarterly Review / Maturity Date
As of September 30, 2011 Reviewable TDRs Permanent TDRs Total TDRs

# ofLoans
  Balance  

As % ofBalance

# ofLoans
  Balance  

As % ofBalance

# ofLoans
  Balance  

As % ofBalance
Review / Maturity by Quarter:            
2011
4 th Quarter 10   12,151 36.1 % 5   11,065 29.1 % 15   23,216 32.4 %
2012
1 st Quarter 7 4,670 13.9 % -- -- 0.0 % 7 4,670 6.5 %
2 nd Quarter 2 1,595 4.7 % 1 1,826 4.8 % 3 3,421 4.8 %
3 rd Quarter 4 14,540 43.2 % -- -- 0.0 % 4 14,540 20.3 %
4 th Quarter --   -- 0.0 % 4   11,450 30.1 % 4   11,450 16.0 %
Total 2012: 13 $ 20,805 61.8 % 5 $ 13,276 34.9 % 18 $ 34,081 47.5 %
2013 & beyond 2   715 2.1 % 8   13,674 36.0 % 10   14,389 20.1 %
Total 25 $ 33,671 100.0 % 18 $ 38,015 100.0 % 43 $ 71,686 100.0 %
 

               
Troubled Debt Restructurings (TDRs)

Migration by Quarter
As of September 30, 2011

(000s)
4/1/09 to

6/30/09
7/1/09 to

9/30/09
10/1/09 to

12/31/09
1/1/10 to

3/31/10
4/1/10 to

6/30/10
7/1/10 to

9/30/10
10/1/10 to

12/31/10
Period Beginning Balance -- $ 33,309 $ 37,425 $ 71,885 $ 80,993 $ 96,976 $ 105,617
 
Additions:
New Loans Added $ 33,309 $ 5,226 $ 37,663 $ 23,477 $ 21,720 $ 12,698 $ 12,377
Loan Advances   --     974     348     219     472     220     531  
Subtotal Additions: $ 33,309 $ 6,200 $ 38,011 $ 23,696 $ 22,192 $ 12,918 $ 12,908
 
Deductions:
Sales Proceeds -- $ 944 $ 1,530 $ 1,218 $ 761 -- $ 125
Payments -- 317 174 50 1,202 1,138 433
Reviews -- -- 229 75 3,714 2,468 --
Upgrades -- -- -- -- -- -- 11,000
Partial TDR Charge-Offs -- -- -- -- -- -- --
Transfers to NPA   --     823     1,618     13,245     532     671     3,971  
Subtotal Deductions: -- $ 2,084 $ 3,551 $ 14,588 $ 6,209 $ 4,277 $ 15,529
 
Net Increase / (Decrease) $ 33,309 $ 4,116 $ 34,460 $ 9,108 $ 15,983 $ 8,641 ($ 2,621 )
 
% Increase / (Decrease) from Preceding Period 12.4 % 92.1 % 12.7 % 19.7 % 8.9 % (2.5 %)
 
Period Ended Balance $ 33,309 $ 37,425 $ 71,885 $ 80,993 $ 96,976 $ 105,617 $ 102,996
 
 
1/1/11 to

3/31/11
4/1/11 to

6/30/11
7/1/11 to

9/30/11
TOTAL
Period Beginning Balance $ 102,996 $ 91,876 $ 81,070
 
Additions:
New Loans Added $ 3,188 $ 116 $ 984 $ 150,758
Loan Advances   486     197     53     3,500  
Subtotal Additions: $ 3,674 $ 313 $ 1,037 $ 154,258
 
Deductions:
Sales Proceeds $ 367 $ 126 $ 4,597 $ 9,668
Payments 1,989 1,715 532 7,550
Reviews 5,731 640 4,292 17,149
Upgrades -- -- -- 11,000
Partial TDR Charge-Offs 5,656 3,000 -- 8,656
Transfers to NPA   1,051     5,638     1,000     28,549  
Subtotal Deductions: $ 14,794 $ 11,119 $ 10,421 $ 82,572
 
Net Increase / (Decrease) ($ 11,120 ) ($10,806 ) ($9,384 ) $ 71,686
 
% Increase / (Decrease) from Preceding Period (10.8 %) (11.8 %) (11.6 %)
 
Period Ended Balance $ 91,876 $ 81,070 $ 71,686 $ 71,686
 

       
As of September 30,  
(Dollars in thousands)   2011     2010   % Change   06/30/11   % Change
     
Loan Portfolio:
Commercial $ 229,651 $ 207,909 10.5 % $ 233,052 -1.5 %
Real estate-one-to-four family residential:
Permanent first and second 261,171 288,318 -9.4 % 261,336 -0.1 %
Home equity loans and lines   125,409   134,159 -6.5 %   125,886 -0.4 %
Total real estate-one-to-four family residential $ 386,580 $ 422,477 -8.5 % $ 387,222 -0.2 %
Real estate-multi-family residential 72,472 86,896 -16.6 % 85,667 -15.4 %
Real estate-non-farm, non-residential:
Owner-occupied 466,432 476,812 -2.2 % 454,960 2.5 %
Non-owner-occupied   659,871   662,695 -0.4 %   648,619 1.7 %
Total real estate-non-farm, non-residential $ 1,126,303 $ 1,139,507 -1.2 % $ 1,103,579 2.1 %
Real estate-construction:
Residential-owner-occupied 12,800 15,152 -15.5 % 17,212 -25.6 %
Residential-builder 138,921 174,896 -20.6 % 134,002 3.7 %
Commercial   171,922   185,444 -7.3 %   178,144 -3.5 %
Total real estate-construction $ 323,643 $ 375,492 -13.8 % $ 329,358 -1.7 %
Consumer 8,882 9,794 -9.3 % 10,438 -14.9 %
Farmland   2,538   2,410 5.3 %   2,498 1.6 %
Total loans $ 2,150,069 $ 2,244,485 -4.2 % $ 2,151,814 -0.1 %
Less unearned income 3,622 3,675 -1.4 % 3,648 -0.7 %
Less allowance for loan losses   49,405   62,776 -21.3 %   53,217 -7.2 %
Loans, net $ 2,097,042 $ 2,178,034 -3.7 % $ 2,094,949 0.1 %
 
       
(Dollars in thousands) As of September 30, 2011
Residential, Acquisition, Development and Construction

 

By County/Jurisdiction of Origination:

TotalOutstandings
 

Percentageof Total
 

Non-accrualLoans
 

Non-accrualsas a % ofOutstandings
 

Net charge-offs as a % ofOutstandings
District of Columbia $ 5,648   3.7 % $ --   --   --
Montgomery, MD -- -- -- -- --
Prince Georges, MD 16,615 11.0 % 11,325 7.5 % 0.7 %
Other Counties in MD 6,348 4.2 % -- -- --
Arlington/Alexandria, VA 28,734 18.9 % -- -- 0.3 %
Fairfax, VA 37,204 24.5 % 826 0.5 % 0.1 %
Culpeper/Fauquier, VA 1,108 0.7 % 362 0.2 % 0.3 %
Frederick, VA 3,730 2.5 % 3,730 2.5 % 1.7 %
Loudoun, VA 16,080 10.6 % 248 0.2 % --
Prince William, VA 9,873 6.5 % 1,026 0.7 % 0.8 %
Spotsylvania, VA 353 0.2 % -- -- --
Stafford, VA 20,698 13.6 % 2,664 1.8 % --
Other Counties in VA 2,051 1.4 % -- -- --
Outside VA, D.C. & MD   3,279 2.2 %   -- --   --  
$ 151,721 100.0 % $ 20,181 13.4 % 3.9 %
 

       
(Dollars in thousands) As of September 30, 2011
Commercial, Acquisition, Development and Construction

 

By County/Jurisdiction of Origination:

TotalOutstandings
 

Percentageof Total
 

Non-accrualLoans
 

Non-accrualsas a % ofOutstandings
 

Net charge-offs as a % ofOutstandings
District of Columbia $ 3,074   1.8 % $ --   --   --
Montgomery, MD 1,809 1.1 % -- -- --
Prince Georges, MD 12,490 7.3 % -- -- --
Other Counties in MD 2,213 1.3 % -- -- --
Arlington/Alexandria, VA 6,799 4.0 % 640 0.4 % 0.5 %
Fairfax, VA 27,355 15.9 % 2,800 1.6 % --
Culpeper/Fauquier, VA 3,020 1.8 % -- -- --
Frederick, VA 5,767 3.4 % -- -- --
Henrico, VA 891 0.5 % -- -- --
Loudoun, VA 20,936 12.2 % 579 0.3 % 2.6 %
Prince William, VA 51,926 30.2 % 2,064 1.2 % 1.2 %
Spotsylvania, VA 1,740 1.0 % -- -- --
Stafford, VA 28,439 16.5 % -- -- --
Other Counties in VA 5,463 3.2 % -- -- --
Outside VA, D.C. & MD   -- --     -- --   --  
$ 171,922 100.0 % $ 6,083 3.5 % 4.3 %
 
       
(Dollars in thousands) As of September 30, 2011
Non-Farm/Non-Residential

 

By County/Jurisdiction of Origination:

TotalOutstandings
 

Percentageof Total
 

Non-accrualLoans
 

Non-accrualsas a % ofOutstandings
 

Net charge-offs as a % ofOutstandings
District of Columbia $ 86,196   7.7 % $ --   --   --
Montgomery, MD 27,494 2.4 % -- -- --
Prince Georges, MD 50,975 4.5 % -- -- --
Other Counties in MD 56,745 5.0 % -- -- --
Arlington/Alexandria, VA 186,366 16.5 % 1,258 0.1 % --
Fairfax, VA 277,009 24.6 % 1,150 0.1 % --
Culpeper/Fauquier, VA 3,377 0.3 % -- -- --
Frederick, VA 4,323 0.4 % -- -- --
Henrico, VA 25,765 2.3 % -- -- 0.3 %
Loudoun, VA 106,135 9.4 % 1,425 0.1 % 0.2 %
Prince William, VA 203,050 18.0 % 909 0.1 % --
Spotsylvania, VA 16,691 1.5 % -- -- --
Stafford, VA 19,761 1.8 % -- -- --
Other Counties in VA 54,216 4.8 % 2,825 0.3 % 0.1 %
Outside VA, D.C. & MD   8,199 0.7 %   -- --   --  
$ 1,126,303 100.0 % $ 7,567 0.7 % 0.3 %
 

Of this total of $1.1 billion in non-farm/non-residential real estate loans, approximately $13.6 million will mature in 2011, $94.1 million in 2012 and $95.4 million in 2013.
      As of September 30,        
(Dollars in thousands) 2011     2010   % Change     06/30/11   % Change
       
Investment Securities (at book value):
Available-for-sale (AFS):
U.S. government agency obligations $ 500,872 $ 279,630 79.1 % $ 410,431 22.0 %
Pooled trust preferred securities 455 1,198 -62.0 % 450 1.1 %
Obligations of states and political subdivisions   68,143   61,232 11.3 %   66,080 3.1 %
$ 569,470 $ 342,060 66.5 % $ 476,961 19.4 %
Held-to-maturity (HTM):
U.S. government agency obligations $ 4,260 $ 7,047 -39.5 % $ 4,864 -12.4 %
Obligations of states and political subdivisions   28,835   31,808 -9.3 %   29,227 -1.3 %
$ 33,095 $ 38,855 -14.8 % $ 34,091 -2.9 %
 

       

Virginia Commerce Bancorp, Inc.

Consolidated Balance Sheets

(Dollars in thousands, except per share data)

As of September 30,

(Unaudited)
 
  2011   2010
Assets
Cash and due from banks $ 30,925 $ 34,520
Investment securities, AFS (fair value: 2011, $569,470; 2010, $342,061) 569,470 342,060
Investment securities, HTM (fair value: 2011, $35,910; 2010, $42,673) 33,095 38,855
Restricted stocks, at cost 11,355 11,752
Federal funds sold -- 113,250
Interest bearing deposits in other banks 99,000 --
Loans held-for-sale 17,464 14,175
Loans, net of allowance for loan losses of $49,405 in 2011 and $62,776 in 2010 2,097,042 2,178,034
Bank premises and equipment, net 11,442 12,224
Accrued interest receivable 10,258 10,617

Other real estate owned, net of valuation allowance of $6,361 in 2011, and $6,001 in

2010
10,377 24,395
Other assets   51,895   66,121
Total assets $ 2,942,323 $ 2,846,003
Liabilities and Stockholders’ Equity
Deposits
Demand deposits $ 389,533 $ 269,703
Savings and interest-bearing demand deposits 1,187,329 1,223,748
Time deposits   792,077   830,027
Total deposits $ 2,368,939 $ 2,323,478
Securities sold under agreement to repurchase and federal funds purchased 201,652 178,632
Other borrowed funds 25,000 25,000
Trust preferred capital notes 66,506 66,249
Accrued interest payable 2,580 3,173
Other liabilities   2,100   2,459
Total liabilities $ 2,666,777 $ 2,598,991
Stockholders’ Equity

Preferred stock, net of discount, $1.00 par, 1,000,000 shares authorized, Series A;$1,000.00 stated value; 71,000 issued and outstanding
$ 66,794 $ 65,082

Common stock, $1.00 par, 50,000,000 shares authorized, issued and outstanding2011, 29,751,460 including 49,998 in unvested restricted stock issued; 2010,28,893,186 including 9,335 in unvested restricted stock issued
29,702 28,884
Surplus 108,543 104,693
Warrants 8,520 8,520
Retained earnings 55,565 35,918
Accumulated other comprehensive income, net   6,422   3,915
Total stockholders’ equity $ 275,546 $ 247,012
Total liabilities and stockholders’ equity $ 2,942,323 $ 2,846,003
 

       

Virginia Commerce Bancorp, Inc.

Consolidated Statements of Operations

(Dollars in thousands except per share data)

(Unaudited)
 
Three Months Ended Nine Months Ended
September 30,   September 30,
  2011     2010     2011     2010  
Interest and dividend income:  
Interest and fees on loans $ 31,456 $ 33,997 $ 95,144 $ 100,138
Interest and dividends on investment securities:
Taxable 3,185 3,131 9,177 9,722
Tax-exempt 593 554 1,777 1,456
Dividends on restricted stocks 95 91 287 267
Interest on federal funds sold 53 59 152 137
Interest on deposits in other banks   21     --     21     --  
Total interest and dividend income $ 35,403   $ 37,832   $ 106,558   $ 111,720  
Interest expense:
Deposits $ 6,485 $ 8,113 $ 20,178 $ 25,972
Securities sold under agreement to repurchase
and federal funds purchased 965 1,023 2,859 3,022
Other borrowed funds 272 272 806 806
Trust preferred capital notes   952     1,243     3,015     3,702  
Total interest expense $ 8,674   $ 10,651   $ 26,858   $ 33,502  
Net interest income $ 26,729 $ 27,181 $ 79,700 $ 78,218
Provision for loan losses   3,933     5,100     11,210     13,538  
Net interest income after provision for loan losses $ 22,796   $ 22,081   $ 68,490   $ 64,680  
Non-interest income:
Service charges and other fees $ 839 $ 841 $ 2,430 $ 2,555
Non-deposit investment services commissions 340 222 1,053 529
Fees and net gains on loans held-for-sale 744 908 1,799 1,737
Gain on sale of securities -- -- 503 139
Impairment loss on securities -- -- (732 ) (1,519 )
Other   17     1,134     619     1,359  
Total non-interest income $ 1,940   $ 3,105   $ 5,672   $ 4,800  
Non-interest expense:
Salaries and employee benefits $ 6,591 $ 6,253 $ 19,676 $ 18,239
Occupancy expense 2,293 2,414 7,006 7,534
FDIC insurance 864 1,312 3,394 3,953
Loss on other real estate owned 546 713 1,022 2,691
Franchise tax expense 780 720 2,326 2,155
Data processing expense 652 553 1,942 1,806
Other operating expense   3,167     3,346     8,497     8,428  
Total non-interest expense $ 14,893   $ 15,311   $ 43,863   $ 44,806  
Income before taxes $ 9,843 $ 9,875 $ 30,299 $ 24,674
Provision for income taxes   3,277     2,917     9,931     7,676  
Net income $ 6,566   $ 6,958   $ 20,368   $ 16,998  
Effective dividend on preferred stock   1,349     1,250     4,012     3,752  
Net income available to common stockholders $ 5,217 $ 5,708 $ 16,356 $ 13,246
Earnings per common share, basic $ 0.18 $ 0.21 $ 0.55 $ 0.49
Earnings per common share, diluted $ 0.17 $ 0.20 $ 0.53 $ 0.46
 

               

Virginia Commerce Bancorp, Inc.

Consolidated Average Balances, Yields, and Rates

Three Months Ended September 30,

(Unaudited)
 
                   
2011 2010
(Dollars in thousands)

AverageBalance
 

InterestIncome-Expense
 

AverageYields/Rates

AverageBalance
 

InterestIncome-Expense
 

AverageYields/Rates
Assets
Securities (1) $ 524,271 $ 3,778 3.11 % $ 382,399 $ 3,685 4.04 %
Restricted stock 11,561 95 3.26 % 11,752 91 3.06 %
Loans, net of unearned income (2) 2,147,176 31,456 5.83 % 2,249,901 33,997 6.01 %
Interest-bearing deposits in other banks 34,887 21 0.23 % 379 -- 0.11 %
Federal funds sold   75,900     53   0.27 %   103,072     59   0.23 %
Total interest-earning assets $ 2,793,795 $ 35,403 5.08 % $ 2,747,503 $ 37,832 5.50 %
Other assets   82,006   87,488
Total Assets $ 2,875,801 $ 2,834,991
 
Liabilities and Stockholders’ Equity
Interest-bearing deposits:
NOW accounts $ 317,245 $ 527 0.66 % $ 350,711 $ 749 0.85 %
Money market accounts 221,202 559 1.00 % 157,157 447 1.13 %
Savings accounts 655,941 1,452 0.88 % 696,270 2,499 1.42 %
Time deposits   779,997     3,947   2.01 %   851,433     4,418   2.06 %
Total interest-bearing deposits $ 1,974,385 $ 6,485 1.30 % $ 2,055,571 $ 8,113 1.57 %
Securities sold under agreement to repurchase and federal funds purchased 192,823 965 1.99 % 183,564 1,023 2.21 %
Other borrowed funds 25,000 272 4.25 % 25,000 272 4.25 %
Trust preferred capital notes   66,471     952   5.60 %   66,217     1,243   7.35 %
Total interest-bearing liabilities $ 2,258,679 $ 8,674 1.52 % $ 2,330,352 $ 10,651 1.81 %
Demand deposits and other liabilities   346,155   267,952
Total liabilities $ 2,604,834 $ 2,598,304
Stockholders’ equity   270,967   236,687
Total liabilities and stockholders’ equity $ 2,875,801 $ 2,834,991
Interest rate spread 3.56 % 3.69 %
Net interest income and margin $ 26,729 3.85 % $ 27,181 3.96 %
   

(1)
 

Yields on securities available-for-sale have been calculated on the basis of historical cost and do not give effect to changes in the fair value of those securities, which are reflected as a component of stockholders’ equity. Average yields on securities are stated on a tax equivalent basis, using a 35% rate.
 

(2)

Loans placed on non-accrual status are included in the average balances. Net loan fees and late charges included in interest income on loans totaled $1.0 million and $672 thousand for the three months ended September 30, 2011 and 2010, respectively.

               

Virginia Commerce Bancorp, Inc.

Consolidated Average Balances, Yields, and Rates

Nine Months Ended September 30,

(Unaudited)
 
                   
2011 2010
(Dollars in thousands)

AverageBalance
 

InterestIncome-Expense
 

AverageYields/Rates

AverageBalance
 

InterestIncome-Expense
 

AverageYields/Rates
Assets
Securities (1) $ 458,694 $ 10,954 3.41 % $ 361,101 $ 11,178 4.25 %
Restricted stock 11,616 287 3.30 % 11,752 267 3.03 %
Loans, net of unearned income (2) 2,176,604 95,144 5.86 % 2,265,573 100,138 5.92 %
Interest-bearing deposits in other banks 12,125 21 0.23 % 204 -- 0.09 %
Federal funds sold   74,906     152   0.27 %   79,399     137   0.23 %
Total interest-earning assets $ 2,733,945 $ 106,558 5.27 % $ 2,718,029 $ 111,720 5.53 %
Other assets   87,199   87,186
Total Assets $ 2,821,144 $ 2,805,215
 
Liabilities and Stockholders’ Equity
Interest-bearing deposits:
NOW accounts $ 320,380 $ 1,775 0.74 % $ 333,984 $ 2,378 0.95 %
Money market accounts 198,605 1,543 1.04 % 153,121 1,418 1.24 %
Savings accounts 672,553 4,965 0.99 % 646,466 7,477 1.55 %
Time deposits   780,310     11,895   2.04 %   912,538     14,699   2.15 %
Total interest-bearing deposits $ 1,971,848 $ 20,178 1.37 % $ 2,046,109 $ 25,972 1.70 %
Securities sold under agreement to repurchase and federal funds purchased 181,226 2,859 2.11 % 183,627 3,022 2.20 %
Other borrowed funds 25,000 806 4.25 % 25,000 806 4.25 %
Trust preferred capital notes   66,409     3,015   5.99 %   66,154     3,702   7.38 %
Total interest-bearing liabilities $ 2,244,483 $ 26,858 1.60 % $ 2,320,890 $ 33,502 1.93 %
Demand deposits and other liabilities   316,829   255,109
Total liabilities $ 2,561,312 $ 2,575,999
Stockholders’ equity   259,832   229,216
Total liabilities and stockholders’ equity $ 2,821,144 $ 2,805,215
Interest rate spread 3.67 % 3.60 %
Net interest income and margin $ 79,700 3.95 % $ 78,218 3.88 %
 

(1)
 

Yields on securities available-for-sale have been calculated on the basis of historical cost and do not give effect to changes in the fair value of those securities, which are reflected as a component of stockholders’ equity. Average yields on securities are stated on a tax equivalent basis, using a 35% rate.
 

(2)

Loans placed on non-accrual status are included in the average balances. Net loan fees and late charges included in interest income on loans totaled $3.0 million and $2.0 million for the nine months ended September 30, 2011 and 2010, respectively.

Copyright Business Wire 2010