Virginia Heritage Bank today posted its financial results for the second quarter ended June 30, 2010, with numbers surpassing initial internal forecasts.
The bank reported second-quarter net income before taxes of $960,000, up from $265,000 for the same period in 2009. The company attributes the increase in net income primarily to the $1.1 million increase in net interest income representing strong balance sheet growth.
Virginia Heritage reported significant balance sheet growth with total assets of $405 million at June 30, 2010, representing an increase of $114 million compared to total assets at June 30, 2009. Total gross loans were $344 million, not including loans held for sale, at June 30, 2010, an increase of $96 million over total gross loans at June 30, 2009. Total deposits were $334 million at June 30, 2010, compared to $217 million at June 30, 2009.
The bank reported that nonperforming assets, including other real estate owned, as a percentage of total assets, increased to 0.58 percent at June 30, 2010, compared to 0.52 percent at June 30, 2009. Annualized net charge-offs were 0.01 percent of average loans for the second quarter of 2010, down from 0.14 percent for the same period last year.
Allowance for loan losses was posted at $4.3 million as of June 30, 2010, reflecting 1.26 percent of gross loans outstanding, excluding loans held for sale; this allowance covers 551 percent of total non-performing loans. The bank said asset quality was significantly better than peers at June 30, 2010, with non-accrual loans of $786,000, loans past due 90 days or more but still accruing interest of $62,000 and other real estate owned of $1.6 million.
David P. Summers, chairman and CEO of Virginia Heritage, said the second-quarter results beat the bank’s expectations, and noted heavy struggles of the overall economy.
“We are encouraged by the bank’s second-quarter performance. Balance sheet growth, asset quality and earnings exceeded our internal projections in spite of a stagnant local economy. In the current business climate, we continue to exercise caution as we evaluate new client opportunities. The current recession is troubling as improvements in economic indicators are inconsistent and positive trends are modest at best. The lack of significant employment growth appears to be weighing on the economy as a whole and until this trend improves, business conditions will in all likelihood remain subdued. We are also evaluating staff additions and branch expansion critically as we digest the impact of the recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act,” Summers stated in the press release. “In spite of these troubling conditions, the Bank’s management team and Board are focused on building the franchise to continue to be one of the best performing community banks in the region.”
For more information visit http://www.virginiaheritagebank.com