Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact:
Jeffrey W. Farrar
Executive Vice President and CFO
(540) 829-1603
farrarj@vfgi.net
VIRGINIA FINANCIAL GROUP, INC. ANNOUNCES 21%
GROWTH IN SECOND QUARTER EARNINGS
Culpeper, VA-Virginia Financial Group, Inc. (NASDAQ: VFGI) today reported second quarter 2005 earnings of $4.5 million, an increase of 21.3% compared to earnings of $3.7 million for the second quarter of 2004. Net income per diluted share was $.62, up 21.6% compared to $.51 for the same period in 2004. VFG’S earnings for the second quarter of 2005 produced an annualized return on average assets (ROA) of 1.22% and an annualized return on average equity (ROE) of 13.80%, compared to prior year ratios of 1.05% and 12.20%, respectively. For the first six months of 2005, net income was $8.5 million, up 18.8% from $7.1 million for the same period in 2004. Net income per diluted share was $1.18, up 19.2% from $.99 for the first six months of 2004. ROA and ROE for the six month period was 1.18% and 13.28%, respectively, compared to 1.02% and 11.86% for the same period in 2004.
O.R. Barham, Jr., President and CEO, commented, “We are pleased with our results for the quarter, showing solid revenue growth, expense control and earnings growth. Effective management of our balance sheet has also enabled us to benefit from the rising rate environment during the period. We look forward to maintaining our momentum during the second half of the year.”
REVENUE GROWTH
Total revenue, comprised of net interest income and noninterest income, was $17.9 million for the second quarter of 2005, an increase of $1.4 million or 8.2% over $16.5 million in 2004. The largest component, net interest income, amounted to $13.8 million for the second quarter, up $1.2 million or 9.7% compared with $12.6 million for the same quarter in 2004. For the six months ended June 30, 2005, net interest income was $27.0 million, an increase of $1.9 million or 7.7% from $25.1 million for the same period in 2004. Improvements in the growth and mix of average earning assets, coupled with net interest margin expansion, were primarily contributors to this growth. The net interest margin for the second quarter of 2005 was 4.23%, up eight basis points sequentially compared to 4.15% for the first quarter of 2005, and up eighteen basis points when compared to 4.05% for the second quarter of 2004. The net interest margin for the six month period ended June 30, 2005 was 4.19%, compared to 4.07% for the same period in 2004.
Total noninterest income was $4.1 million for the second quarter of 2005, an increase of $136 thousand or 3.4% compared to $3.5 million for the second quarter of 2004. Included in the 2005 results is a gain of $318 thousand in connection with the sale of a community bank stock investment during the quarter. Retail banking fees decreased $240 thousand or 11.7% to $1.8 million, compared to $2.1 million in the second quarter of 2004. VFG is experiencing a fifteen percent decline in the volume of NSF charges as compared to the same period in 2004, which can be attributed to trends noted with respect to a corresponding decrease in paper items processed and increase in pre-authorized electronic banking transactions such as ATM and debit card transactions. VFG experienced lower revenues from mortgage operations, with mortgage banking fees amounting to $684, a decrease of $152 thousand or 18.2%, as compared to $836 thousand for the second quarter of 2004, but up sequentially $209 thousand or 44.0% from the first quarter of 2005. Mortgage loans available for sale increased to $17.7 million, an increase of $8.0 million or 83% from March 31, 2005. Trust and brokerage revenues for the second quarter were $967 thousand, up $136 thousand or 16.4% compared to $831 thousand in the second quarter of 2004.
NONINTEREST EXPENSE AND EFFICIENCY
Noninterest expense for the second quarter of 2005 amounted to $10.8 million, up $166 thousand or 1.6% from $10.6 million for the same period in 2004, and up sequentially $267 thousand or 2.5% from the first quarter of 2005. For the six month period ended June 30, 2005, noninterest expense amounted to $21.3 million, an increase of $265 thousand or 1.3% over $21.1 million the same period in 2004. The relatively modest increases are attributable to a fairly stable full-time equivalent employee count and related costs associated with health and welfare benefits, a decrease in operating expenses associated with the Tazewell branch divesture, a decrease in incentives associated with loan production offices and mortgage divisions, and general improvements in overall efficiency. VFG anticipates the rate of increase in overhead to increase to a more normalized level as it accelerates its expansion efforts and implements several sales and credit training initiatives in the second half of 2005. VFG’s efficiency ratio was 60.0% for the quarter, compared to 62.7% for the same quarter in 2004. For the six month period ended June 30, 2005, the efficiency ratio was 60.4%, compared to 63.1% for the same period in 2004.
BALANCE SHEET GROWTH
Average loans for the second quarter were $1.10 billion, up $126.4 million or 12.9% from the second quarter of 2004, and average total assets were $1.47 billion, up $59.0 million or 4.2% from the second quarter of 2004. Loan growth for the second quarter of 2005 was $27.5 million or 2.5%. Second quarter 2005 loan growth was funded from maturities and pay downs in the securities portfolio of $14.3 million or 5.8%, and deposit growth of $12.7 million or 1.0%.
At June 30, 2005 VFG had total assets of $1.47 billion, compared to $1.41 billion at June 30, 2004. Shareholder’s equity at June 30, 2005 was $131.5 million, an increase of $10.7 million or 8.9% compared to June 30, 2004. Shareholder’s equity represented 8.97% of total assets at June 30, 2005, while tangible equity capital represented 7.80% of tangible assets at June 30, 2005. Book value at June 30, 2005 was $18.34 per share, compared to $16.87 at June 30, 2004.
ASSET QUALITY
Asset quality remains strong, with VFG’s ratio of non-performing assets as a percentage of total assets amounting to .11% as of June 30, 2005, compared to .31% at June 30, 2004 and .15% at March 31, 2005. Net charge-offs as a percentage of average loans receivable amounted to .01% for the quarter and .01% for the six month period ended June 30, 2005, compared to .01% and .03% for the same periods in 2004. At
June 30, 2005, the allowance for loan losses was approximately eight times the level of non-performing assets, while the allowance as a percentage of total loans amounted to 1.14%. The Company decreased its provision for loan losses by $90 thousand or 14.2%, from $636 thousand for the three months ended June 30, 2004 compared to $546 thousand for the three months ended June 30, 2005, consistent with a slightly decreased rate of growth and general improvement in asset quality during the period.
UPDATE ON SUPERVISORY AGREEMENT REGARDING BANK SECRECY ACT COMPLIANCE
VFG continues to actively work with the Federal Reserve Bank of Richmond to improve the Company’s compliance with Bank Secrecy Act (“BSA”) regulations. The Federal Reserve Bank’s most recent review was conducted during the second quarter, and identified one area in which the regulator thought that some further refinement was needed before it would consider lifting the supervisory agreement. Since that notification, management has developed and substantially implemented a response, and plans to have the Federal Reserve revisit the area noted during the third quarter. It is anticipated that a termination of the agreement could come soon thereafter, and VFG has initiated construction on new branches as discussed below in anticipation that approvals will be in hand by completion of branch construction. While there can be no assurance that this matter will be resolved in the timeline outlined above, VFG is confident that this matter is close to a resolution.
NEW BRANCHES
VFG is pleased to announce ground-breaking for two new branches, one to be located at 2102 Langhorne Rd. in Lynchburg, Virginia, and the other to be located one block east of the Mill Creek Road/Avon Street intersection in Charlottesville, Virginia. The Lynchburg branch will be a 6,000 square foot two story building and serve as a main office facility for several future sites in various stages of planning for that market. The Avon Street branch will be a 3,000 square foot structure, and also the first of several planned retail sites in the Charlottesville market. These branches will support our highly successful loan production offices in those two markets. Plans are to have both branches open by the end of the year.
ABOUT VFG
VFG is the holding company for Planters Bank & Trust Company of Virginia – in Staunton; Second Bank & Trust – in Culpeper; Virginia Heartland Bank – in Fredericksburg and Virginia Commonwealth Trust Company – in Culpeper. The Company is a traditional community banking provider, offering a full range of business and consumer banking services including trust and asset management service via its trust company affiliate. The organization maintains a network of thirty-five branches serving Central and Southwest Virginia. It also maintains five trust and investment service offices in its markets, and loan production offices located in Charlottesville and Lynchburg.
NON-GAAP FINANCIAL MEASURES
This report refers to the efficiency ratio, which is computed by dividing non-interest expense by the sum of net interest income on a tax equivalent basis and non-interest income excluding gain on sale of securities. This is a non-GAAP financial measure that we believe provides investors with important information regarding our operational efficiency. Such information is not in accordance with generally accepted accounting principles (GAAP) and should not be construed as such. Management believes such financial information is meaningful to the reader in understanding operating performance, but cautions that such information not be viewed as a substitute for GAAP. VFG, in referring to its net income, is referring to income under generally accepted accounting principles, or “GAAP”.
FORWARD LOOKING STATEMENTS
In addition to historical information, this press release contains forward-looking statements. The forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from historical results, or those anticipated. When we use words such as “believes”, “expects”, “anticipates” or similar expressions, we are making forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date thereof. VFG wishes to caution the reader that factors, such as those listed below, in some cases have affected and could affect VFG’s actual results, causing actual results to differ materially from those in any forward looking statement. These factors include: (i) expected cost savings from VFG’s acquisitions and dispositions, (ii) competitive pressure in the banking industry or in VFG’s markets may increase significantly, (iii) changes in the interest rate environment may reduce margins, (iv) general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, credit quality deterioration, (v) changes may occur in banking legislation and regulation, or VFG may not be released from its supervisory agreement with the Federal Reserve related to Bank Secrecy Compliance within anticipated timeframes, (vi) changes may occur in general business conditions and (vii) changes may occur in the securities markets. Please refer to VFG’s filings with the Securities and Exchange Commission for additional information, which may be accessed atwww.vfgi.net.
QUARTERLY PERFORMANCE SUMMARY
Virginia Financial Group, Inc. (NASDAQ: VFGI)
(Dollars in thousands, except per share data)
For the Three Months Ended | Percent Increase (Decrease) | ||||||||||
6/30/2005 | 6/30/2004 | ||||||||||
INCOME STATEMENT | |||||||||||
Interest income - taxable equivalent | $ | 19,904 | $ | 17,703 | 12.43 | % | |||||
Interest expense | 5,719 | 4,693 | 21.86 | % | |||||||
Net interest income - taxable equivalent | 14,185 | 13,010 | 9.03 | % | |||||||
Less: taxable equivalent adjustment | 399 | 448 | -10.94 | % | |||||||
Net interest income | 13,786 | 12,562 | 9.74 | % | |||||||
Provision for loan and lease losses | 546 | 636 | -14.15 | % | |||||||
Net interest income after provision for loan and lease losses | 13,240 | 11,926 | 11.02 | % | |||||||
Noninterest income | 4,085 | 3,949 | 3.44 | % | |||||||
Noninterest expense | 10,801 | 10,635 | 1.56 | % | |||||||
Provision for income taxes | 2,054 | 1,555 | 32.09 | % | |||||||
Net income | $ | 4,470 | $ | 3,685 | 21.30 | % | |||||
PER SHARE DATA | |||||||||||
Basic earnings | $ | 0.62 | $ | 0.51 | 21.57 | % | |||||
Diluted earnings | $ | 0.62 | $ | 0.51 | 21.57 | % | |||||
Shares outstanding | 7,169,929 | 7,160,417 | |||||||||
Weighted average shares - | |||||||||||
Basic | 7,166,969 | 7,159,654 | |||||||||
Diluted | 7,214,171 | 7,200,797 | |||||||||
Dividends paid on common shares | $ | 0.21 | $ | 0.19 | |||||||
PERFORMANCE RATIOS | |||||||||||
Return on average assets | 1.22 | % | 1.05 | % | 16.19 | % | |||||
Return on average equity | 13.80 | % | 12.20 | % | 13.11 | % | |||||
Return on average realized equity (A) | 13.80 | % | 12.51 | % | 10.31 | % | |||||
Net yield on earning assets (taxable equivalent) | 4.23 | % | 4.05 | % | 4.44 | % | |||||
Efficiency (taxable equivalent) (B) | 59.96 | % | 62.69 | % | -4.35 | % | |||||
ASSET QUALITY | |||||||||||
Allowance for loan losses | |||||||||||
Beginning of period | $ | 12,181 | $ | 10,283 | |||||||
Provision for loan losses | 546 | 636 | |||||||||
Charge offs | (130 | ) | (178 | ) | |||||||
Recoveries | 67 | 58 | |||||||||
End of period | $ | 12,664 | $ | 10,799 | |||||||
Non-performing assets: | |||||||||||
Non-accrual loans | $ | 1,347 | $ | 2,325 | |||||||
Loans 90+ days past due and still accruing | — | 13 | |||||||||
Other real estate owned | — | 5 | |||||||||
Troubled debt restructurings | 193 | 1,998 | |||||||||
Total non-performing assets | $ | 1,540 | $ | 4,341 | |||||||
to total assets: | 0.11 | % | 0.31 | % | |||||||
to total loans plus OREO: | 0.14 | % | 0.44 | % | |||||||
Allowance for loan losses to total loans | 1.14 | % | 1.09 | % | |||||||
Net charge-offs (recoveries) | $ | 62 | $ | 120 | |||||||
Net charge-offs to average loans outstanding | 0.01 | % | 0.01 | % |
NOTES: Applicable ratios are annualized
(A) | Excludes the effect on average stockholders’ equity of unrealized gains (losses) that result from changes in market values of securities and other comprehensive pension expense. |
(B) | Excludes securities gains (losses) and foreclosed property expense for all periods. |
QUARTERLY PERFORMANCE SUMMARY
Virginia Financial Group, Inc. (NASDAQ: VFGI)
(Dollars in thousands, except per share data)
For the Six Months Ended | Percent Increase (Decrease) | ||||||||||
6/30/2005 | 6/30/2004 | ||||||||||
INCOME STATEMENT | |||||||||||
Interest income - taxable equivalent | $ | 38,894 | $ | 35,545 | 9.42 | % | |||||
Interest expense | 11,116 | 9,581 | 16.02 | % | |||||||
Net interest income - taxable equivalent | 27,778 | 25,964 | 6.99 | % | |||||||
Less: taxable equivalent adjustment | 806 | 910 | -11.43 | % | |||||||
Net interest income | 26,972 | 25,054 | 7.66 | % | |||||||
Provision for loan and lease losses | 1,092 | 1,317 | -17.08 | % | |||||||
Net interest income after provision for loan and lease losses | 25,880 | 23,737 | 9.03 | % | |||||||
Noninterest income | 7,779 | 7,406 | 5.04 | % | |||||||
Noninterest expense | 21,335 | 21,070 | 1.26 | % | |||||||
Provision for income taxes | 3,841 | 2,933 | 30.96 | % | |||||||
Net income | $ | 8,483 | $ | 7,140 | 18.81 | % | |||||
PER SHARE DATA | |||||||||||
Basic earnings | $ | 1.18 | $ | 1.00 | 18.00 | % | |||||
Diluted earnings | $ | 1.18 | $ | 0.99 | 19.19 | % | |||||
Shares outstanding | 7,169,929 | 7,160,417 | |||||||||
Weighted average shares - | |||||||||||
Basic | 7,165,128 | 7,156,505 | |||||||||
Diluted | 7,212,554 | 7,199,256 | |||||||||
Dividends paid on common shares | $ | 0.41 | $ | 0.38 | |||||||
PERFORMANCE RATIOS | |||||||||||
Return on average assets | 1.18 | % | 1.02 | % | 15.69 | % | |||||
Return on average equity | 13.28 | % | 11.86 | % | 11.97 | % | |||||
Return on average realized equity (A) | 13.37 | % | 12.24 | % | 9.23 | % | |||||
Net yield on earning assets (taxable equivalent) | 4.19 | % | 4.08 | % | 2.70 | % | |||||
Efficiency (taxable equivalent) (B) | 60.37 | % | 63.11 | % | -4.34 | % | |||||
ASSET QUALITY | |||||||||||
Allowance for loan losses | |||||||||||
Beginning of period | $ | 11,706 | $ | 9,743 | |||||||
Provision for loan losses | 1,092 | 1,317 | |||||||||
Charge offs | (319 | ) | (354 | ) | |||||||
Recoveries | 185 | 93 | |||||||||
End of period | $ | 12,664 | $ | 10,799 | |||||||
Non-performing assets: | |||||||||||
Non-accrual loans | $ | 1,347 | $ | 2,325 | |||||||
Loans 90+ days past due and still accruing | — | 13 | |||||||||
Other real estate owned | — | 5 | |||||||||
Troubled debt restructurings | 193 | 1,998 | |||||||||
Total non-performing assets | $ | 1,540 | $ | 4,341 | |||||||
to total assets: | 0.11 | % | 0.31 | % | |||||||
to total loans plus OREO: | 0.14 | % | 0.44 | % | |||||||
Allowance for loan losses to total loans | 1.14 | % | 1.09 | % | |||||||
Net charge-offs (recoveries) | $ | 133 | $ | 261 | |||||||
Net charge-offs to average loans outstanding | 0.01 | % | 0.03 | % |
NOTES: Applicable ratios are annualized
(A) | Excludes the effect on average stockholders’ equity of unrealized gains (losses) that result from changes in market values of securities and other comprehensive pension expense. |
(B) | Excludes securities gains (losses) and foreclosed property expense for all periods. |
QUARTERLY PERFORMANCE SUMMARY
Virginia Financial Group, Inc. (NASDAQ: VFGI)
(Dollars in thousands, except per share data)
6/30/2005 | 6/30/2004 | Percent Increase | |||||||||
SELECTED BALANCE SHEET DATA | |||||||||||
End of period balances | |||||||||||
Securities available for sale | $ | 229,435 | $ | 294,003 | -21.96 | % | |||||
Securities held to maturity | 4,856 | 5,843 | -16.89 | % | |||||||
Total securities | 234,291 | 299,846 | -21.86 | % | |||||||
Real estate - construction | 126,288 | 102,907 | 22.72 | % | |||||||
Real estate - 1-4 family residential | 315,290 | 311,626 | 1.18 | % | |||||||
Real estate - commercial and multifamily | 540,888 | 451,480 | 19.80 | % | |||||||
Commercial, financial and agricultural | 87,075 | 78,278 | 11.24 | % | |||||||
Consumer loans | 41,122 | 46,459 | -11.49 | % | |||||||
All other loans | 2,414 | 4,685 | -48.47 | % | |||||||
Total loans | 1,113,077 | 995,250 | 11.84 | % | |||||||
Deferred loan costs | 610 | 185 | 229.73 | % | |||||||
Allowance for loan losses | (12,664 | ) | (10,799 | ) | 17.27 | % | |||||
Net loans | 1,101,023 | 984,636 | 11.82 | % | |||||||
Other assets | 130,582 | 121,940 | 7.09 | % | |||||||
Total assets | 1,465,896 | 1,406,422 | 4.23 | % | |||||||
Non-interest bearing deposits | 265,137 | 225,416 | 17.62 | % | |||||||
Money market & interest checking | 352,092 | 362,894 | -2.98 | % | |||||||
Savings | 132,557 | 142,207 | -6.79 | % | |||||||
CD’s and other time deposits | 499,384 | 488,398 | 2.25 | % | |||||||
Total deposits | 1,249,170 | 1,218,915 | 2.48 | % | |||||||
Short-term borrowed funds | 25,676 | 25,498 | 0.70 | % | |||||||
Trust preferred capital notes | 20,619 | 20,000 | 3.10 | % | |||||||
Federal Home Loan Bank advances | 30,020 | 14,100 | 112.91 | % | |||||||
Other liabilities | 8,906 | 7,135 | 24.82 | % | |||||||
Total liabilities | 1,334,391 | 1,285,648 | 3.79 | % | |||||||
Total stockholders’ equity | $ | 131,505 | $ | 120,774 | 8.89 | % | |||||
For the Six Months Ended | Percent Increase (Decrease) | ||||||||||
6/30/2005 | 6/30/2004 | ||||||||||
Average balances | |||||||||||
Total assets | $ | 1,455,971 | $ | 1,405,147 | 3.62 | % | |||||
Total stockholders’ equity | $ | 128,868 | $ | 121,089 | 6.42 | % | |||||
For the Three Months Ended | |||||||||||
6/30/2005 | 6/30/2004 | ||||||||||
Total assets | $ | 1,465,571 | $ | 1,406,613 | 4.19 | % | |||||
Total stockholders’ equity | $ | 129,972 | $ | 121,446 | 7.02 | % |
QUARTERLY PERFORMANCE SUMMARY
Virginia Financial Group, Inc. (NASDAQ: VFGI)
(Dollars in thousands)
For the Three Months Ended | Percent Increase (Decrease) | |||||||||
6/30/2005 | 6/30/2004 | |||||||||
Interest Income | ||||||||||
Interest and fees on loans | $ | 17,123 | $ | 14,239 | 20.25 | % | ||||
Interest on deposits in other banks | 3 | 1 | 200.00 | % | ||||||
Interest and dividends on securities: | ||||||||||
Taxable | 1,600 | 2,217 | -27.83 | % | ||||||
Tax-exempt | 641 | 714 | -10.22 | % | ||||||
Dividends | 125 | 77 | 62.34 | % | ||||||
Interest income on federal funds sold | 12 | 7 | 71.43 | % | ||||||
Total interest income | 19,504 | 17,255 | 13.03 | % | ||||||
Interest Expense | ||||||||||
Interest on deposits | 4,868 | 4,237 | 14.89 | % | ||||||
Interest on federal funds repurchased and securities sold under agreements to repurchase | 144 | 35 | 311.43 | % | ||||||
Interest on Federal Home Loan Bank advances | 248 | 183 | 35.52 | % | ||||||
Interest on trust preferred capital notes | 294 | 194 | 51.55 | % | ||||||
Interest on other short-term borrowings | 164 | 44 | 272.73 | % | ||||||
Total interest expense | 5,718 | 4,693 | 21.84 | % | ||||||
Net interest income | 13,786 | 12,562 | 9.74 | % | ||||||
Provision for loan losses | 546 | 636 | -14.15 | % | ||||||
Net interest income after provision for loan losses | 13,240 | 11,926 | 11.02 | % | ||||||
Noninterest Income | ||||||||||
Retail banking fees | 1,810 | 2,050 | -11.71 | % | ||||||
Commissions and fees from fiduciary activities | 787 | 684 | 15.06 | % | ||||||
Investment fee income | 180 | 147 | 22.45 | % | ||||||
Other operating income | 326 | 232 | 40.52 | % | ||||||
Gains (losses) on sale of fixed assets | (1 | ) | — | — | ||||||
Gains (losses) on securities available for sale | 296 | — | — | |||||||
Gains (losses) on sale of other real estate owned | — | — | — | |||||||
Gains (losses) on sale of branches | 3 | — | — | |||||||
Gain on sale of mortgage loans | 684 | 836 | -18.18 | % | ||||||
Total noninterest income | 4,085 | 3,949 | 3.44 | % | ||||||
Noninterest Expense | ||||||||||
Compensation and employee benefits | 6,048 | 5,948 | 1.68 | % | ||||||
Net occupancy expense | 706 | 670 | 5.37 | % | ||||||
Supplies and equipment expenses | 1,092 | 1,095 | -0.27 | % | ||||||
Amortization-intangible assets | 159 | 174 | -8.62 | % | ||||||
Data processing | 313 | 442 | -29.19 | % | ||||||
Telecommunications | 229 | 268 | -14.55 | % | ||||||
Marketing | 309 | 149 | 107.38 | % | ||||||
State franchise taxes | 223 | 141 | 58.16 | % | ||||||
Professional fees | 267 | 290 | -7.93 | % | ||||||
Other operating expenses | 1,455 | 1,458 | -0.21 | % | ||||||
Total noninterest expense | 10,801 | 10,635 | 1.56 | % | ||||||
Income before income taxes | 6,524 | 5,240 | 24.50 | % | ||||||
Income tax expense | 2,054 | 1,555 | 32.09 | % | ||||||
Net income | $ | 4,470 | $ | 3,685 | 21.30 | % |
QUARTERLY PERFORMANCE SUMMARY
Virginia Financial Group, Inc. (NASDAQ: VFGI)
(Dollars in thousands)
For the Six Months Ended | Percent Increase (Decrease) | |||||||||
6/30/2005 | 6/30/2004 | |||||||||
Interest Income | ||||||||||
Interest and fees on loans | $ | 33,166 | $ | 28,294 | 17.22 | % | ||||
Interest on deposits in other banks | 7 | 2 | 250.00 | % | ||||||
Interest and dividends on securities: | ||||||||||
Taxable | 3,407 | 4,744 | -28.18 | % | ||||||
Tax-exempt | 1,296 | 1,462 | -11.35 | % | ||||||
Dividends | 192 | 124 | 54.84 | % | ||||||
Interest income on federal funds sold | 20 | 9 | 122.22 | % | ||||||
Total interest income | 38,088 | 34,635 | 9.97 | % | ||||||
Interest Expense | ||||||||||
Interest on deposits | 9,620 | 8,771 | 9.68 | % | ||||||
Interest on federal funds repurchased and securities sold under agreements to repurchase | 288 | 106 | 171.70 | % | ||||||
Interest on Federal Home Loan Bank advances | 428 | 338 | 26.63 | % | ||||||
Interest on trust preferred capital notes | 559 | 222 | 151.80 | % | ||||||
Interest on other short-term borrowings | 221 | 144 | 53.47 | % | ||||||
Total interest expense | 11,116 | 9,581 | 16.02 | % | ||||||
Net interest income | 26,972 | 25,054 | 7.66 | % | ||||||
Provision for loan losses | 1,092 | 1,317 | -17.08 | % | ||||||
Net interest income after provision for loan losses | 25,880 | 23,737 | 9.03 | % | ||||||
Noninterest Income | ||||||||||
Retail banking fees | 3,475 | 3,599 | -3.45 | % | ||||||
Commissions and fees from fiduciary activities | 1,511 | 1,460 | 3.49 | % | ||||||
Investment fee income | 361 | 345 | 4.64 | % | ||||||
Other operating income | 567 | 521 | 8.83 | % | ||||||
Gains (losses) on sale of fixed assets | (1 | ) | — | — | ||||||
Gains (losses) on securities available for sale | 296 | — | — | |||||||
Gains (losses) on sale of other real estate owned | — | — | — | |||||||
Gains (losses) on sale of branches | 411 | — | — | |||||||
Gain on sale of mortgage loans | 1,159 | 1,481 | -21.74 | % | ||||||
Total noninterest income | 7,779 | 7,406 | 5.04 | % | ||||||
Noninterest Expense | ||||||||||
Compensation and employee benefits | 12,095 | 11,808 | 2.43 | % | ||||||
Net occupancy expense | 1,457 | 1,376 | 5.89 | % | ||||||
Supplies and equipment expenses | 2,206 | 2,139 | 3.13 | % | ||||||
Amortization-intangible assets | 327 | 347 | -5.76 | % | ||||||
Data processing | 627 | 741 | -15.38 | % | ||||||
Telecommunications | 497 | 524 | -5.15 | % | ||||||
Marketing | 448 | 302 | 48.34 | % | ||||||
State franchise taxes | 454 | 310 | 46.45 | % | ||||||
Professional fees | 397 | 491 | -19.14 | % | ||||||
Other operating expenses | 2,827 | 3,032 | -6.76 | % | ||||||
Total noninterest expense | 21,335 | 21,070 | 1.26 | % | ||||||
Income before income taxes | 12,324 | 10,073 | 22.35 | % | ||||||
Income tax expense | 3,841 | 2,933 | 30.96 | % | ||||||
Net income | $ | 8,483 | $ | 7,140 | 18.81 | % |
VIRGINIA FINANCIAL GROUP INC.
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
THREE MONTHS ENDED JUNE 30, 2005 AND 2004
(Dollars in thousands)
Three months ended June 30, | ||||||||||||||||||
2005 | 2004 | |||||||||||||||||
Dollars in thousands | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | ||||||||||||
Assets | ||||||||||||||||||
Loans receivable, net | $ | 1,102,991 | $ | 17,171 | 6.24 | % | $ | 976,563 | $ | 14,297 | 5.89 | % | ||||||
Investment securities | ||||||||||||||||||
Taxable | 179,428 | 1,732 | 3.87 | % | 244,109 | 2,300 | 3.79 | % | ||||||||||
Tax exempt | 61,415 | 985 | 6.43 | % | 66,608 | 1,096 | 6.62 | % | ||||||||||
Total investments | 240,843 | 2,717 | 4.53 | % | 310,717 | 3,396 | 4.40 | % | ||||||||||
Interest bearing deposits | 220 | 3 | 5.47 | % | 504 | 1 | 1.03 | % | ||||||||||
Federal funds sold | 1,368 | 13 | 3.81 | % | 3,221 | 8 | 0.92 | % | ||||||||||
242,431 | 2,733 | 4.53 | % | 314,442 | 3,405 | 4.36 | % | |||||||||||
Total earning assets | 1,345,422 | 19,904 | 5.93 | % | 1,291,005 | 17,702 | 5.51 | % | ||||||||||
Total nonearning assets | 120,149 | 115,608 | ||||||||||||||||
Total assets | $ | 1,465,571 | $ | 1,406,613 | ||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||
Interest checking | $ | 195,952 | $ | 204 | 0.42 | % | $ | 189,402 | $ | 185 | 0.39 | % | ||||||
Money market | 166,521 | 461 | 1.11 | % | 170,698 | 375 | 0.88 | % | ||||||||||
Savings | 132,431 | 221 | 0.67 | % | 141,020 | 235 | 0.67 | % | ||||||||||
Time deposits: | ||||||||||||||||||
Less than $100,000 | 363,045 | 2,827 | 3.12 | % | 370,677 | 2,449 | 2.66 | % | ||||||||||
$100,000 and more | 134,441 | 1,155 | 3.45 | % | 119,939 | 993 | 3.33 | % | ||||||||||
Total interest-bearing deposits | 992,390 | 4,868 | 1.97 | % | 991,736 | 4,237 | 1.72 | % | ||||||||||
Federal funds purchased and repos | 21,397 | 145 | 2.72 | % | 21,633 | 34 | 0.63 | % | ||||||||||
Trust Preferred Securities | 20,619 | 294 | 5.72 | % | 20,000 | 194 | 3.90 | % | ||||||||||
Other short term borrowings | 19,165 | 163 | 3.41 | % | 10,813 | 46 | 1.71 | % | ||||||||||
Federal Home Loan Bank advances | 20,389 | 249 | 4.90 | % | 14,118 | 182 | 5.18 | % | ||||||||||
81,570 | 851 | 4.18 | % | 66,564 | 456 | 2.76 | % | |||||||||||
Total interest-bearing liabilities | 1,073,960 | 5,719 | 2.14 | % | 1,058,300 | 4,693 | 1.78 | % | ||||||||||
Total noninterest-bearing liabilities | 261,639 | 226,867 | ||||||||||||||||
Total liabilities | 1,335,599 | 1,285,167 | ||||||||||||||||
Stockholders’ equity | 129,972 | 121,446 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,465,571 | $ | 1,406,613 | ||||||||||||||
Net interest income (tax equivalent) | $ | 14,185 | $ | 13,009 | ||||||||||||||
Average interest rate spread | 3.79 | % | 3.73 | % | ||||||||||||||
Interest expense as percentage of average earning assets | 1.70 | % | 1.46 | % | ||||||||||||||
Net interest margin | 4.23 | % | 4.05 | % |
VIRGINIA FINANCIAL GROUP INC.
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
SIX MONTHS ENDED JUNE 30, 2005 AND 2004
(Dollars in thousands)
Six months ended June 30, | ||||||||||||||||||
2005 | 2004 | |||||||||||||||||
Dollars in thousands | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | ||||||||||||
Assets | ||||||||||||||||||
Loans receivable, net | $ | 1,087,577 | $ | 33,267 | 6.17 | % | $ | 959,816 | $ | 28,411 | 5.95 | % | ||||||
Investment securities | ||||||||||||||||||
Taxable | 185,563 | 3,605 | 3.92 | % | 250,962 | 4,874 | 3.91 | % | ||||||||||
Tax exempt | 61,868 | 1,995 | 6.50 | % | 68,759 | 2,248 | 6.57 | % | ||||||||||
Total investments | 247,431 | 5,600 | 4.57 | % | 319,721 | 7,122 | 4.48 | % | ||||||||||
Interest bearing deposits | 370 | 7 | 3.82 | % | 526 | 2 | 0.78 | % | ||||||||||
Federal funds sold | 1,246 | 20 | 3.24 | % | 2,040 | 10 | 0.93 | % | ||||||||||
249,047 | 5,627 | 4.56 | % | 322,287 | 7,134 | 4.45 | % | |||||||||||
Total earning assets | 1,336,624 | 38,894 | 5.87 | % | 1,282,103 | 35,545 | 5.58 | % | ||||||||||
Total nonearning assets | 119,347 | 123,044 | ||||||||||||||||
Total assets | $ | 1,455,971 | $ | 1,405,147 | ||||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||
Interest checking | $ | 197,385 | $ | 399 | 0.41 | % | $ | 192,967 | $ | 570 | 0.59 | % | ||||||
Money market | 170,358 | 943 | 1.12 | % | 169,963 | 781 | 0.92 | % | ||||||||||
Savings | 133,996 | 443 | 0.67 | % | 139,020 | 484 | 0.70 | % | ||||||||||
Time deposits: | ||||||||||||||||||
Less than $100,000 | 366,258 | 5,587 | 3.08 | % | 371,508 | 4,956 | 2.68 | % | ||||||||||
$100,000 and more | 131,310 | 2,247 | 3.45 | % | 117,896 | 1,980 | 3.38 | % | ||||||||||
Total interest-bearing deposits | 999,307 | 9,619 | 1.94 | % | 991,354 | 8,771 | 1.78 | % | ||||||||||
Federal funds purchased and repos | 22,203 | 288 | 2.62 | % | 28,024 | 106 | 0.76 | % | ||||||||||
Trust Preferred Securities | 20,619 | 559 | 5.47 | % | 11,538 | 222 | 3.87 | % | ||||||||||
Other short term borrowings | 14,418 | 221 | 3.09 | % | 18,614 | 144 | 1.56 | % | ||||||||||
Federal Home Loan Bank advances | 17,241 | 429 | 5.02 | % | 11,820 | 338 | 5.75 | % | ||||||||||
74,481 | 1,497 | 4.05 | % | 69,996 | 810 | 2.33 | % | |||||||||||
Total interest-bearing liabilities | 1,073,788 | 11,116 | 2.09 | % | 1,061,350 | 9,581 | 1.82 | % | ||||||||||
Total noninterest-bearing liabilities | 253,315 | 222,708 | ||||||||||||||||
Total liabilities | 1,327,103 | 1,284,058 | ||||||||||||||||
Stockholders’ equity | 128,868 | 121,089 | ||||||||||||||||
Total liabilities and stockholders’ equity | $ | 1,455,971 | $ | 1,405,147 | ||||||||||||||
Net interest income (tax equivalent) | $ | 27,778 | $ | 25,964 | ||||||||||||||
Average interest rate spread | 3.78 | % | 3.76 | % | ||||||||||||||
Interest expense as percentage of average earning assets | 1.68 | % | 1.50 | % | ||||||||||||||
Net interest margin | 4.19 | % | 4.07 | % |