Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact:
Jeffrey W. Farrar
Executive Vice President and CFO
(434) 964-2217
farrarj@vfgi.net
VIRGINIA FINANCIAL GROUP, INC.
ANNOUNCES SECOND QUARTER 2007 EARNINGS
Charlottesville, VA, July 31, 2007 - Virginia Financial Group, Inc. (NASDAQ: VFGI) (VFG) today reported second quarter 2007 earnings of $4.5 million, down 13.3% from $5.2 million for the second quarter of 2006, and up sequentially 13.0% from $4.0 million in the first quarter of 2007. Net income per diluted share was $.42, down 12.5% from $.48 for the same period in 2006 and up 13.5% from $.37 in the first quarter of 2007. VFG’s earnings for the second quarter of 2007 produced an annualized return on average assets (ROA) of 1.15% and an annualized return on average equity (ROE) of 11.82%, compared to prior year ratios of 1.35% and 14.74%, respectively. For the first six months of 2007, net income was $8.6 million, down 11.8% from $9.7 million for the same period in 2006. Net income per diluted share was $.79, down 11.2% from $.89 for the first six months of 2006. ROA and ROE for the six month period was 1.08% and 11.31%, respectively, compared to 1.27% and 13.93% for the same period in 2006.
O.R. Barham, Jr., President and CEO, commented, “We are pleased with the sequential earnings growth, and achieved some improvements on a number of fronts. The housing and real estate market conditions continue to have some impact on our balance sheet from a growth standpoint, although asset quality continues to hold up well. We had some expansion of our net interest margin during the quarter, but will need to reestablish our balance sheet growth in order to maintain it. We continue to see good growth in noninterest income which is encouraging. We are beginning to see the benefit of several corporate initiatives to improve efficiency, which should accelerate during the remainder of the year.”
Financial Performance
Net Interest Income
Net interest income amounted to $14.9 million for the second quarter of 2007, down $326 thousand or 2.1% compared with $15.2 million for the same quarter in 2006. Net interest margin compression of thirteen basis points when compared to the same quarter in the prior year, coupled with a lower rate of growth in average earning assets, led to this decrease. The net interest margin for the second quarter of 2007 was 4.22%, up seventeen basis points compared to 4.05% for the first quarter of 2007, and down
thirteen basis points when compared to 4.35% for the second quarter of 2006. Normalizing the net interest margin for an interest adjustment on a participation loan recorded during the period would have resulted in a net interest margin of 4.13% for the current quarter. Asset yields rose sequentially, with an average yield on assets of 6.99% for the second quarter of 2007, compared to 6.92% for the first quarter of 2007 and 6.62% for the second quarter of 2006. On a linked quarter basis, the average cost of interest bearing deposits decreased to 3.43% for the second quarter of 2007, as compared to 3.51% for the first quarter of 2007, and increased fifty-nine basis points when compared to 2.84% for the second quarter of 2006. Average balances in VFG commercial paper increased to $69.6 million for the second quarter of 2007 at a cost of 4.50%, compared to $48.5 million at a cost of 4.40% for the second quarter of 2006 and increased on a linked quarter basis as compared to $63.8 million at a cost of 4.73% for the first quarter of 2007. Average balances in FHLB advances increased to $73.6 million for the second quarter of 2007 at a cost of 5.20%, compared to $55.5 million at a cost of 4.50% for the second quarter of 2006, and increased on a linked quarter basis compared to $62.2 million at a cost of 5.00%. For the six months ended June 30, 2007, net interest income was $29.3 million, a decrease of $836 thousand or 2.8% from $30.1 million for the same period in 2006. The net interest margin for the six month period ended June 30, 2007 was 4.14%, compared to 4.35% for the same period in 2006. Continuing pressures of a flat yield curve affecting the entire industry and our increased costs related to short-term wholesale funding are key reasons for the decline in our margin.
Non-Interest Income
Total non-interest income was $4.3 million for the second quarter of 2007, up 11.8% compared with $3.9 million for the second quarter of 2006 and up sequentially 13.3% compared with $3.8 million for the first quarter of 2007. Retail banking fee income increased $153 thousand or 8.7% to $1.9 million, compared to $1.8 million in the second quarter of 2006. Mortgage banking revenue amounted to $645 thousand, a decrease of $208 thousand or 24.4%, as compared to $853 thousand for the second quarter of 2006, and up sequentially $46 thousand or 7.7% from the first quarter of 2007. Revenues from trust and brokerage for the second quarter were $1.2 million, up $199 thousand or 20.9% compared to $1.0 million in the second quarter of 2006, and up sequentially $67 thousand or 6.2% from the first quarter of 2007. Fiduciary and brokerage assets under management were $633 million at June 30, 2007, up slightly from $628 million at March 31, 2007. Included in other non-interest income during second quarter 2007 was income associated with an investment in bank owned life insurance of $121 thousand for second quarter 2007 and $240 thousand for the six month period, compared to none in 2006 for both periods.
Non-interest Expense
Non-interest expense for the second quarter of 2007 amounted to $12.9 million, up $1.4 million or 12.2% from $11.5 million for the same period in 2006, and up sequentially $567 thousand or 4.6% from the first quarter of 2007. Marketing and professional fee increases as compared to the first quarter of 2007 are attributable to a company wide direct mail marketing initiative. Total nonrecurring costs associated with the previously announced asset reallocation initiative and charter consolidation amounted to $152 thousand during the second quarter. For the six month period ended June 30, 2007, non-interest expense amounted to $25.1 million, an increase of $2.5 million or 11.1% over $22.6 million for the same period in 2006. This increase reflects incremental operating costs primarily in compensation, occupancy and supplies of $1.2 million associated with four branches and two loan production offices during 2006 and 2007, respectively. VFG’s efficiency ratio was 64.9% for the quarter, compared to 58.5% for the same quarter in 2006. For the six month period ended June 30, 2007, the efficiency ratio was 65.2%, compared to 59.0% for the same period in 2006. Excluding the impact of nonrecurring revenue and expense items noted above, the efficiency ratio was 65.2% and 64.8% for the quarter and six month period, respectively.
Loan Portfolio
Average loans for the second quarter were $1.19 billion, down $23.1 million or 1.8% from the second quarter of 2006, and down sequentially from $1.22 billion for the first quarter of 2007. Likewise, period end loans were down $23.2 million or 1.9% for the quarter, and down $5.0 million or 0.4% over the last twelve months. The portfolio continues to be impacted by payoff activity and a slow down in the commercial and residential real estate markets. In addition, underwriting standards for acquisition and development lending have been modified in response to increased risk given current market conditions. Loan growth is expected to improve in the third quarter, supported by positive initial results from our new loan production office in Richmond, Virginia.
Deposits and Borrowings
Average deposits for the second quarter were $1.24 billion, down $19.5 million or 1.5% from the second quarter of 2006, and down sequentially $44.6 million from the first quarter of 2007. Period end deposits were also down $41.4 million or 3.2% sequentially. Decreases were noted in each category. Demand deposit accounts, while decreasing due to some commercial balance fluctuation, experienced improved growth in account openings as a result of the direct mail initiative. Average certificates of deposits were down $26.3 million or 4.2% sequentially, with the average cost of such funding improving from 4.40% to 4.35% for the period. Average borrowings for the second quarter amounted to $172.9 million, an increase of $29.0 million or 20.2% compared to the same period in 2006, and up sequentially $18.1 million or 11.7% from the first quarter of 2007.
Capital
At June 30, 2007 VFG had total assets of $1.58 billion, compared to $1.59 billion at June 30, 2006. Shareholder’s equity at June 30, 2007 was $155.0 million, an increase of $12.8 million or 9.0% compared to June 30, 2006. Shareholder’s equity represented 9.79% of total assets at June 30, 2007, while tangible equity capital represented 8.79% of tangible assets at June 30, 2007. Book value at June 30, 2007 was $14.36 per share, compared to $13.21 at June 30, 2006.
Asset Quality
VFG’s ratio of non-performing assets as a percentage of total assets amounted to 0.20% as of June 30, 2007, compared to 0.16% at June 30, 2006 and 0.17% at March 31, 2007. Net charge-offs as a percentage of average loans receivable amounted to 0.00% for the quarter ended June 30, 2007, compared to net recoveries of (0.01%) for the same period in 2006. At June 30, 2007, the allowance for loan losses was approximately five times the level of non-performing assets, while the allowance as a percentage of total loans amounted to 1.21%. VFG did not record a provision for loan losses for the second quarter, compared to $100 thousand for the three months ended June 30, 2006. The reduction in provision is a result of loan contraction experienced during the quarter and continuing strength in asset quality. For the six month period, the provision for loan losses amounted to $165 thousand, compared to net charge-offs of $170 thousand for the period.
Merger with FNB Corporation
VFG previously announced on July 26, 2007 that it had entered into a definitive agreement with FNB Corporation to combine in a merger of equals transaction, creating the largest independent bank holding company headquartered in the Commonwealth of Virginia.
Under the terms of the merger agreement, FNB shareholders will receive 1.5850 shares of VFG common stock for each of their shares of FNB common stock, with each share of VFG common stock becoming one share of common stock of the resulting holding company. FNB and VFG will consolidate their banking subsidiaries into one state-chartered bank. Both the resulting holding company and its banking subsidiary will be renamed and will initially consist of 67 full-service banking offices, total assets of over $3 billion and total deposits of approximately $2.6 billion. In addition, the resulting company’s combined trust and wealth management unit will have approximately $1 billion in assets under management. The resulting holding company will be headquartered in Charlottesville, Virginia, with its banking subsidiary and operations center headquartered in Christiansburg, Virginia. The resulting holding company will be governed by a Board of Directors of up to 24 directors, with equal representation from FNB and VFG. The banking subsidiary’s Board of Directors will also have equal representation from FNB and VFG. Current FNB President and Chief Executive Officer William P. Heath, Jr. will serve as Chairman of the Board for the resulting holding company. Current VFG President and Chief Executive Officer O. R. Barham, Jr. will serve as President and Chief Executive Officer for the resulting holding company. Gregory W. Feldmann, current FNB Chief Operating Officer and President and Chief Executive Officer of FNB’s subsidiary, First National Bank, will serve as President and Chief Executive Officer of the resulting banking subsidiary. Raymond D. Smoot, Jr., current Chairman of the Board of FNB’s First National Bank, will serve as Chairman of the Board of the resulting banking subsidiary. Current VFG Executive Vice President and Chief Operating Officer Litz Van Dyke will serve as Executive Vice President and Chief Operating Officer for the resulting holding company, and current VFG Executive Vice President and Chief Financial Officer Jeffrey W. Farrar will serve as Executive Vice President and Chief Financial Officer for the resulting holding company.
The merger is subject to customary closing conditions, including approval by VFG’s and FNB’s shareholders and by both companies’ regulatory agencies. It is expected to be completed during the last quarter of 2007.
“VFG and FNB share similar cultures and visions for the future. We look forward to integrating the companies and creating a strong platform for expanding the combined company’s branch network and ultimately seeking acquisition opportunities and merger partners. We believe our customers will appreciate the expanded geographic footprint, and the communities we serve will benefit from our enhanced ability to compete in the marketplace. Our employees will be partnered with a larger, more vibrant company with more opportunities for advancement, and we believe our shareholders will benefit from significant increased earnings opportunities. The merger will provide a combination of both fast growing and stable markets across a contiguous franchise,” said Ed Barham, President and Chief Executive Officer of VFG.
In connection with the proposed merger, VFG will file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 to register the shares of VFG common stock to be issued to the shareholders of FNB. The registration statement will include a joint proxy statement/prospectus which will be sent to the shareholders of VFG and FNB seeking their approval of the merger. In addition, each of VFG and FNB may file other relevant documents concerning the proposed merger with the SEC.
WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENT ON FORM S-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT VFG, FNB AND THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of these documents through the website maintained by the SEC athttp://www.sec.gov. Free copies of the joint proxy statement/prospectus also may be obtained by directing a request by telephone or mail to Virginia Financial Group, Inc., 1807 Seminole Trail, Suite 104 Charlottesville, Virginia 22901, Attention: Investor Relations (telephone: (434) 964-2217) or by accessing
VFG’s website athttp://www.vfgi.net under “SEC Filings and Other Documents”. The information on VFG’s website is not, and shall not be deemed to be, a part of this release or incorporated into other filings either company makes with the SEC.
About VFG
VFG is the holding company for Planters Bank & Trust Company of Virginia – in Staunton; Second Bank & Trust – 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 forty branches and two loan production offices serving Northern, Central and Southwest Virginia. It also maintains five trust and investment service offices in its markets.
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 gains or losses on securities, fixed assets and foreclosed assets. This is a non-GAAP financial measure that we believe provides investors with important information regarding our operational efficiency. Comparison of our efficiency ratio with those of other companies may not be possible, because other companies may calculate the efficiency ratio differently. 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.”
Caution Regarding 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 (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) | ||||||||||
6/30/2007 | 6/30/2006 | ||||||||||
INCOME STATEMENT | |||||||||||
Interest income - taxable equivalent | $ | 25,604 | $ | 23,970 | 6.82 | % | |||||
Interest expense | 10,151 | 8,222 | 23.46 | % | |||||||
Net interest income - taxable equivalent | 15,453 | 15,748 | -1.87 | % | |||||||
Less: taxable equivalent adjustment | 538 | 506 | 6.32 | % | |||||||
Net interest income | 14,915 | 15,242 | -2.15 | % | |||||||
Provision for loan and lease losses | — | 100 | -100.00 | % | |||||||
Net interest income after provision for loan and lease losses | 14,915 | 15,142 | -1.50 | % | |||||||
Noninterest income | 4,336 | 3,879 | 11.78 | % | |||||||
Noninterest expense | 12,854 | 11,455 | 12.21 | % | |||||||
Provision for income taxes | 1,856 | 2,326 | -20.21 | % | |||||||
Net income | $ | 4,541 | $ | 5,240 | -13.34 | % | |||||
PER SHARE DATA | |||||||||||
Basic earnings | $ | 0.42 | $ | 0.49 | -14.29 | % | |||||
Diluted earnings | $ | 0.42 | $ | 0.48 | -12.50 | % | |||||
Shares outstanding | 10,792,797 | 10,771,778 | |||||||||
Weighted average shares - | |||||||||||
Basic | 10,792,467 | 10,770,557 | |||||||||
Diluted | 10,817,882 | 10,849,504 | |||||||||
Dividends paid on common shares | $ | 0.16 | $ | 0.15 | |||||||
PERFORMANCE RATIOS | |||||||||||
Return on average assets | 1.15 | % | 1.35 | % | -14.81 | % | |||||
Return on average equity | 11.82 | % | 14.74 | % | -19.81 | % | |||||
Return on average realized equity (A) | 11.76 | % | 14.48 | % | -18.78 | % | |||||
Net interest margin (taxable equivalent) | 4.22 | % | 4.35 | % | -2.99 | % | |||||
Efficiency (taxable equivalent) (B) | 64.85 | % | 58.53 | % | 10.80 | % | |||||
ASSET QUALITY | |||||||||||
Allowance for loan losses | |||||||||||
Beginning of period | $ | 14,501 | $ | 13,941 | |||||||
Provision for loan losses | — | 100 | |||||||||
Charge offs | (34 | ) | (53 | ) | |||||||
Recoveries | 28 | 55 | |||||||||
Net (charge-offs) recoveries | (6 | ) | 2 | ||||||||
End of period | $ | 14,495 | $ | 14,043 | |||||||
Non-performing assets: | |||||||||||
Non-accrual loans | $ | 3,139 | $ | 2,339 | |||||||
Loans 90+ days past due and still accruing | — | — | |||||||||
Foreclosed assets | — | 38 | |||||||||
Troubled debt restructurings | — | 113 | |||||||||
Total non-performing assets | $ | 3,139 | $ | 2,490 | |||||||
to total assets: | 0.20 | % | 0.16 | % | |||||||
to total loans plus foreclosed assets: | 0.26 | % | 0.21 | % | |||||||
Allowance for loan losses to total loans | 1.21 | % | 1.17 | % | |||||||
Net charge-offs (recoveries) | $ | 6 | $ | (2 | ) | ||||||
Net charge-offs (recoveries) to average loans outstanding | 0.00 | % | (0.01 | )% |
NOTES:
(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 gains or losses on securities, fixed assets and foreclosed assets. |
(C) | Individual amounts shown above are calculated from actual, not rounded amounts in the thousands, which appear above. |
QUARTERLY PERFORMANCE SUMMARY
Virginia Financial Group, Inc. (NASDAQ: VFGI)
(Dollars in thousands, except per share data)
Percent | |||||||||||
For the Six Months Ended | Increase | ||||||||||
6/30/2007 | 6/30/2006 | (Decrease) | |||||||||
INCOME STATEMENT | |||||||||||
Interest income - taxable equivalent | $ | 51,099 | $ | 46,601 | 9.65 | % | |||||
Interest expense | 20,742 | 15,530 | 33.56 | % | |||||||
Net interest income - taxable equivalent | 30,357 | 31,071 | -2.30 | % | |||||||
Less: taxable equivalent adjustment | 1,087 | 964 | 12.76 | % | |||||||
Net interest income | 29,270 | 30,107 | -2.78 | % | |||||||
Provision for loan and lease losses | 165 | 610 | -72.95 | % | |||||||
Net interest income after provision for loan and lease losses | 29,105 | 29,497 | -1.33 | % | |||||||
Noninterest income | 8,164 | 7,142 | 14.31 | % | |||||||
Noninterest expense | 25,141 | 22,638 | 11.06 | % | |||||||
Provision for income taxes | 3,568 | 4,297 | -16.97 | % | |||||||
Net income | $ | 8,560 | $ | 9,704 | -11.79 | % | |||||
PER SHARE DATA | |||||||||||
Basic earnings | $ | 0.79 | $ | 0.90 | -12.22 | % | |||||
Diluted earnings | $ | 0.79 | $ | 0.89 | -11.24 | % | |||||
Shares outstanding | 10,792,797 | 10,771,778 | |||||||||
Weighted average shares - | |||||||||||
Basic | 10,791,224 | 10,767,905 | |||||||||
Diluted | 10,819,352 | 10,847,842 | |||||||||
Dividends paid on common shares | $ | 0.32 | $ | 0.30 | |||||||
PERFORMANCE RATIOS | |||||||||||
Return on average assets | 1.08 | % | 1.27 | % | -14.96 | % | |||||
Return on average equity | 11.31 | % | 13.93 | % | -18.81 | % | |||||
Return on average realized equity (A) | 11.25 | % | �� | 13.74 | % | -18.12 | % | ||||
Net interest margin (taxable equivalent) | 4.14 | % | 4.35 | % | -4.83 | % | |||||
Efficiency (taxable equivalent) (B) | 65.21 | % | 59.00 | % | 10.53 | % | |||||
ASSET QUALITY | |||||||||||
Allowance for loan losses | |||||||||||
Beginning of period | $ | 14,500 | $ | 13,581 | |||||||
Provision for loan losses | 165 | 610 | |||||||||
Charge offs | (245 | ) | (226 | ) | |||||||
Recoveries | 75 | 78 | |||||||||
Net charge-offs | (170 | ) | (148 | ) | |||||||
End of period | $ | 14,495 | $ | 14,043 | |||||||
Non-performing assets: | |||||||||||
Non-accrual loans | $ | 3,139 | $ | 2,339 | |||||||
Loans 90+ days past due and still accruing | — | — | |||||||||
Other real estate owned | — | 38 | |||||||||
Troubled debt restructurings | — | 113 | |||||||||
Total non-performing assets | $ | 3,139 | $ | 2,490 | |||||||
to total assets: | 0.20 | % | 0.16 | % | |||||||
to total loans plus OREO: | 0.26 | % | 0.21 | % | |||||||
Allowance for loan losses to total loans | 1.21 | % | 1.17 | % | |||||||
Net charge-offs | $ | 170 | $ | 148 | |||||||
Net charge-offs to average loans outstanding | 0.03 | % | 0.01 | % |
NOTES:
(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. |
(C) | Individual amounts shown above are calculated from actual, not rounded amounts in the thousands, which appear above. |
QUARTERLY PERFORMANCE SUMMARY
Virginia Financial Group, Inc. (NASDAQ: VFGI)
(Dollars in thousands, except per share data)
6/30/2007 | 6/30/2006 | Percent Increase (Decrease) | |||||||||
SELECTED BALANCE SHEET DATA | |||||||||||
(Dollars in thousands) | |||||||||||
End of period balances | |||||||||||
Cash and cash equivalents | $ | 41,451 | $ | 84,225 | -50.79 | % | |||||
Securities available for sale | 260,198 | 246,667 | 5.49 | % | |||||||
Securities held to maturity | 2,653 | 3,323 | -20.16 | % | |||||||
Total securities | 262,851 | 249,990 | 5.14 | % | |||||||
Real estate - construction | 215,142 | 178,835 | 20.30 | % | |||||||
Real estate - 1-4 family residential | 317,879 | 300,935 | 5.63 | % | |||||||
Real estate - commercial and multifamily | 524,527 | 574,285 | -8.66 | % | |||||||
Commercial, financial and agricultural | 100,441 | 102,220 | -1.74 | % | |||||||
Consumer loans | 29,580 | 35,597 | -16.90 | % | |||||||
All other loans | 6,266 | 6,936 | -9.66 | % | |||||||
Total loans | 1,193,835 | 1,198,808 | -0.41 | % | |||||||
Deferred loan costs | 1,012 | 617 | 64.02 | % | |||||||
Allowance for loan losses | (14,495 | ) | (14,043 | ) | 3.22 | % | |||||
Net loans | 1,180,352 | 1,185,382 | -0.42 | % | |||||||
Bank owned life insurance | 10,471 | — | — | ||||||||
Other assets | 98,975 | 74,652 | 32.58 | % | |||||||
Total assets | 1,583,629 | 1,594,249 | -0.67 | % | |||||||
Noninterest bearing deposits | 233,110 | 260,067 | -10.37 | % | |||||||
Money market & interest checking | 315,840 | 332,407 | -4.98 | % | |||||||
Savings | 91,553 | 106,150 | -13.75 | % | |||||||
CD’s and other time deposits | 595,839 | 598,084 | -0.38 | % | |||||||
Total deposits | 1,236,342 | 1,296,708 | -4.66 | % | |||||||
Federal funds purchased and securities sold under agreements to repurchase | — | — | N/A | ||||||||
Federal Home Loan Bank advances | 85,500 | 75,000 | 14.00 | % | |||||||
Subordinated debt | 20,619 | 20,619 | 0.00 | % | |||||||
Commercial paper | 73,724 | 48,860 | 50.89 | % | |||||||
Other borrowed funds | 873 | 12 | >100.00 | % | |||||||
Other liabilities | 11,555 | 10,811 | 6.88 | % | |||||||
Total liabilities | 1,428,613 | 1,452,010 | -1.61 | % | |||||||
Total stockholders’ equity | $ | 155,016 | $ | 142,239 | 8.98 | % | |||||
Accumulated comprehensive loss | $ | (1,972 | ) | $ | (2,539 | ) | -22.33 | % | |||
Average balances | |||||||||||
For the Three Months Ended | Percent Increase (Decrease) | ||||||||||
6/30/2007 | 6/30/2006 | ||||||||||
Total assets | $ | 1,582,575 | $ | 1,559,265 | 1.49 | % | |||||
Total stockholders’ equity | $ | 154,045 | $ | 142,583 | 8.04 | % | |||||
For the Six Months Ended | |||||||||||
6/30/2007 | 6/30/2006 | ||||||||||
Total assets | $ | 1,595,169 | $ | 1,542,399 | 3.42 | % | |||||
Total stockholders’ equity | $ | 152,685 | $ | 140,485 | 8.68 | % | |||||
OTHER DATA | |||||||||||
End of period full time employees | 536 | 558 |
QUARTERLY PERFORMANCE SUMMARY
Virginia Financial Group, Inc. (NASDAQ: VFGI)
(Dollars in thousands)
For the Three Months Ended | Percent Increase (Decrease) | ||||||||||
6/30/2007 | 6/30/2006 | ||||||||||
Interest Income | |||||||||||
Loans, including fees | $ | 22,278 | $ | 20,834 | 6.93 | % | |||||
Deposits in other banks | 4 | 29 | -86.21 | % | |||||||
Investment securities: | |||||||||||
Taxable | 1,715 | 1,512 | 13.43 | % | |||||||
Tax-exempt | 926 | 845 | 9.59 | % | |||||||
Dividends | 134 | 111 | 20.72 | % | |||||||
Federal funds sold | 9 | 133 | -93.23 | % | |||||||
Total interest income | 25,066 | 23,464 | 6.83 | % | |||||||
Interest Expense | |||||||||||
Deposits | 7,843 | 6,594 | 18.94 | % | |||||||
Federal funds repurchased and securities sold under agreements to repurchase | 117 | 64 | 82.81 | % | |||||||
Federal Home Loan Bank advances | 969 | 623 | 55.54 | % | |||||||
Subordinated debt | 421 | 402 | 4.73 | % | |||||||
Commercial paper | 791 | 531 | 48.96 | % | |||||||
Other borrowings | 10 | 8 | 25.00 | % | |||||||
Total interest expense | 10,151 | 8,222 | 23.46 | % | |||||||
Net interest income | 14,915 | 15,242 | -2.15 | % | |||||||
Provision for loan losses | — | 100 | -100.00 | % | |||||||
Net interest income after provision for loan losses | 14,915 | 15,142 | -1.50 | % | |||||||
Noninterest Income | |||||||||||
Retail banking fees | 1,920 | 1,767 | 8.66 | % | |||||||
Commissions and fees from fiduciary activities | 857 | 781 | 9.73 | % | |||||||
Brokerage fee income | 294 | 170 | 72.94 | % | |||||||
Other operating income | 651 | 246 | >100.00 | % | |||||||
Gain on sale of premises and equipment | 1 | 80 | -98.75 | % | |||||||
Losses on securities available for sale | (32 | ) | (18 | ) | 77.78 | % | |||||
Mortgage banking-related fees | 645 | 853 | -24.38 | % | |||||||
Total noninterest income | 4,336 | 3,879 | 11.78 | % | |||||||
Noninterest Expense | |||||||||||
Compensation and employee benefits | 7,037 | 6,596 | 6.69 | % | |||||||
Net occupancy | 885 | 732 | 20.90 | % | |||||||
Supplies and equipment | 1,166 | 1,016 | 14.76 | % | |||||||
Amortization-intangible assets | 161 | 157 | 2.55 | % | |||||||
Marketing | 393 | 307 | 28.01 | % | |||||||
State franchise taxes | 299 | 216 | 38.43 | % | |||||||
Data processing | 430 | 308 | 39.61 | % | |||||||
Telecommunications | 236 | 272 | -13.24 | % | |||||||
Professional fees | 378 | 148 | >100.00 | % | |||||||
Other operating expenses | 1,869 | 1,703 | 9.75 | % | |||||||
Total noninterest expense | 12,854 | 11,455 | 12.21 | % | |||||||
Income before income taxes | 6,397 | 7,566 | -15.45 | % | |||||||
Income tax expense | 1,856 | 2,326 | -20.21 | % | |||||||
Net income | $ | 4,541 | $ | 5,240 | -13.34 | % |
QUARTERLY PERFORMANCE SUMMARY
Virginia Financial Group, Inc. (NASDAQ: VFGI)
(Dollars in thousands)
For the Six Months Ended | Percent (Decrease) | ||||||||||
6/30/2007 | 6/30/2006 | ||||||||||
Interest Income | |||||||||||
Loans, including fees | $ | 44,264 | $ | 40,268 | 9.92 | % | |||||
Deposits in other banks | 10 | 65 | -84.62 | % | |||||||
Investment securities: | |||||||||||
Taxable | 3,549 | 3,010 | 17.91 | % | |||||||
Tax-exempt | 1,869 | 1,659 | 12.66 | % | |||||||
Dividends | 260 | 226 | 15.04 | % | |||||||
Federal funds sold | 61 | 409 | -85.09 | % | |||||||
Total interest income | 50,013 | 45,637 | 9.59 | % | |||||||
Interest Expense | |||||||||||
Deposits | 16,373 | 12,556 | 30.40 | % | |||||||
Federal funds repurchased and securities sold under agreements to repurchase | 225 | 148 | 52.03 | % | |||||||
Federal Home Loan Bank advances | 1,746 | 1,205 | 44.90 | % | |||||||
Subordinated debt | 838 | 776 | 7.99 | % | |||||||
Commercial paper | 1,545 | 833 | 85.47 | % | |||||||
Other borrowings | 16 | 12 | 33.33 | % | |||||||
Total interest expense | 20,743 | 15,530 | 33.57 | % | |||||||
Net interest income | 29,270 | 30,107 | -2.78 | % | |||||||
Provision for loan losses | 165 | 610 | -72.95 | % | |||||||
Net interest income after provision for loan losses | 29,105 | 29,497 | -1.33 | % | |||||||
Noninterest Income | |||||||||||
Retail banking fees | 3,663 | 3,375 | 8.53 | % | |||||||
Commissions and fees from fiduciary activities | 1,685 | 1,592 | 5.84 | % | |||||||
Brokerage fee income | 550 | 396 | 38.89 | % | |||||||
Other operating income | 1,058 | 416 | >100.00 | % | |||||||
(Losses) Gains on sale of premises and equipment | (4 | ) | 76 | -105.26 | % | ||||||
Losses on securities available for sale | (32 | ) | (199 | ) | -83.92 | % | |||||
Mortgage banking-related fees | 1,244 | 1,486 | -16.29 | % | |||||||
— | |||||||||||
Total noninterest income | 8,164 | 7,142 | 14.31 | % | |||||||
Noninterest Expense | |||||||||||
Compensation and employee benefits | 13,856 | 13,197 | 4.99 | % | |||||||
Net occupancy | 1,759 | 1,498 | 17.42 | % | |||||||
Supplies and equipment | 2,286 | 1,992 | 14.76 | % | |||||||
Amortization-intangible assets | 325 | 257 | 26.46 | % | |||||||
Marketing | 642 | 432 | 48.61 | % | |||||||
State franchise taxes | 543 | 463 | 17.28 | % | |||||||
Data processing | 898 | 691 | 29.96 | % | |||||||
Telecommunications | 475 | 547 | -13.16 | % | |||||||
Professional fees | 528 | 279 | 89.25 | % | |||||||
Other operating expenses | 3,829 | 3,282 | 16.67 | % | |||||||
Total noninterest expense | 25,141 | 22,638 | 11.06 | % | |||||||
Income before income taxes | 12,128 | 14,001 | -13.38 | % | |||||||
Income tax expense | 3,568 | 4,297 | -16.97 | % | |||||||
Net income | $ | 8,560 | $ | 9,704 | -11.79 | % |
VIRGINIA FINANCIAL GROUP INC.
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
THREE MONTHS ENDED JUNE 30, 2007 AND 2006
(Dollars in thousands)
Three months ended June 30, | ||||||||||||||||||
2007 | 2006 | |||||||||||||||||
Dollars in thousands | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | ||||||||||||
Assets | ||||||||||||||||||
Loans receivable, net | $ | 1,209,394 | $ | 22,317 | 7.40 | % | $ | 1,188,071 | $ | 20,886 | 7.05 | % | ||||||
Investment securities | ||||||||||||||||||
Taxable | 164,210 | 1,849 | 4.45 | % | 154,145 | 1,622 | 4.22 | % | ||||||||||
Tax exempt | 93,876 | 1,425 | 6.01 | % | 84,328 | 1,300 | 6.18 | % | ||||||||||
Total investments | 258,086 | 3,274 | 5.02 | % | 238,473 | 2,922 | 4.91 | % | ||||||||||
Interest bearing deposits | 378 | 4 | 4.19 | % | 3,842 | 29 | 3.03 | % | ||||||||||
Federal funds sold | 667 | 9 | 5.34 | % | 22,605 | 133 | 2.36 | % | ||||||||||
259,131 | 3,287 | 5.02 | % | 264,920 | 3,084 | 4.67 | % | |||||||||||
Total earning assets | 1,468,525 | 25,604 | 6.99 | % | 1,452,991 | 23,970 | 6.62 | % | ||||||||||
Total nonearning assets | 114,050 | 106,274 | ||||||||||||||||
Total assets | $ | 1,582,575 | $ | 1,559,265 | ||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||
Interest checking | $ | 164,391 | $ | 70 | 0.17 | % | $ | 175,080 | $ | 243 | 0.56 | % | ||||||
Money market | 149,997 | 898 | 2.40 | % | 156,687 | 679 | 1.74 | % | ||||||||||
Savings | 95,490 | 325 | 1.37 | % | 109,907 | 173 | 0.63 | % | ||||||||||
Time deposits: | ||||||||||||||||||
Less than $100,000 | 397,884 | 4,199 | 4.23 | % | 392,281 | 3,609 | 3.69 | % | ||||||||||
$100,000 and more | 204,382 | 2,351 | 4.61 | % | 184,713 | 1,890 | 4.10 | % | ||||||||||
Total interest-bearing deposits | 1,012,144 | 7,843 | 3.11 | % | 1,018,668 | 6,594 | 2.60 | % | ||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 8,352 | 117 | 5.54 | % | 18,884 | 64 | 1.36 | % | ||||||||||
Federal Home Loan Bank advances | 73,643 | 968 | 5.20 | % | 55,496 | 623 | 4.50 | % | ||||||||||
Subordinated debt | 20,619 | 421 | 8.08 | % | 20,619 | 402 | 7.82 | % | ||||||||||
Commercial paper | 69,605 | 791 | 4.50 | % | 48,451 | 531 | 4.40 | % | ||||||||||
Other borrowings | 715 | 11 | 6.09 | % | 468 | 8 | 6.86 | % | ||||||||||
172,934 | 2,308 | 5.28 | % | 143,918 | 1,628 | 4.54 | % | |||||||||||
Total interest-bearing liabilities | 1,185,078 | 10,151 | 3.43 | % | 1,162,586 | 8,222 | 2.84 | % | ||||||||||
Total noninterest-bearing liabilities | 243,452 | 254,096 | ||||||||||||||||
Total liabilities | 1,428,530 | 1,416,682 | ||||||||||||||||
Stockholders' equity | 154,045 | 142,583 | ||||||||||||||||
Total liabilities and stockholders' equity | $ | 1,582,575 | $ | 1,559,265 | ||||||||||||||
Net interest income (tax equivalent) | $ | 15,453 | $ | 15,748 | ||||||||||||||
Average interest rate spread | 3.57 | % | 3.78 | % | ||||||||||||||
Interest expense as percentage of average earning assets | 2.77 | % | 2.27 | % | ||||||||||||||
Net interest margin | 4.22 | % | 4.35 | % |
VIRGINIA FINANCIAL GROUP INC.
CONSOLIDATED AVERAGE BALANCES, YIELDS AND RATES
SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(Dollars in thousands)
Six months ended June 30, | ||||||||||||||||||
2007 | 2006 | |||||||||||||||||
Dollars in thousands | Average Balance | Interest Inc/Exp | Average Rates | Average Balance | Interest Inc/Exp | Average Rates | ||||||||||||
Assets | ||||||||||||||||||
Loans receivable, net | $ | 1,214,647 | $ | 44,343 | 7.36 | % | $ | 1,173,227 | $ | 40,338 | 6.93 | % | ||||||
Investment securities | ||||||||||||||||||
Taxable | 169,495 | 3,809 | 4.47 | % | 153,548 | 3,236 | 4.25 | % | ||||||||||
Tax exempt | 94,363 | 2,876 | 6.06 | % | 82,485 | 2,553 | 6.24 | % | ||||||||||
Total investments | 263,858 | 6,685 | 5.04 | % | 236,033 | 5,789 | 4.95 | % | ||||||||||
Interest bearing deposits | 501 | 10 | 3.97 | % | 4,895 | 65 | 2.68 | % | ||||||||||
Federal funds sold | 2,241 | 61 | 5.41 | % | 26,627 | 409 | 3.10 | % | ||||||||||
266,600 | 6,756 | 5.04 | % | 267,555 | 6,263 | 4.72 | % | |||||||||||
Total earning assets | 1,481,247 | 51,099 | 6.96 | % | 1,440,782 | 46,601 | 6.52 | % | ||||||||||
Total nonearning assets | 113,922 | 101,616 | ||||||||||||||||
Total assets | $ | 1,595,169 | $ | 1,542,398 | ||||||||||||||
Liabilities and Stockholders' Equity | ||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||
Interest checking | $ | 161,918 | $ | 133 | 0.17 | % | $ | 177,160 | $ | 443 | 0.50 | % | ||||||
Money market | 164,755 | 2,154 | 2.64 | % | 161,649 | 1,380 | 1.72 | % | ||||||||||
Savings | 96,002 | 627 | 1.32 | % | 114,970 | 369 | 0.65 | % | ||||||||||
Time deposits: | ||||||||||||||||||
Less than $100,000 | 406,338 | 8,632 | 4.28 | % | 382,272 | 6,794 | 3.58 | % | ||||||||||
$100,000 and more | 209,001 | 4,827 | 4.66 | % | 180,040 | 3,570 | 4.00 | % | ||||||||||
Total interest-bearing deposits | 1,038,014 | 16,373 | 3.18 | % | 1,016,091 | 12,556 | 2.49 | % | ||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 8,118 | 225 | 5.51 | % | 17,281 | 148 | 1.73 | % | ||||||||||
Federal Home Loan Bank advances | 67,956 | 1,745 | 5.11 | % | 55,959 | 1,205 | 4.34 | % | ||||||||||
Subordinated debt | 20,619 | 838 | 8.08 | % | 20,619 | 776 | 7.59 | % | ||||||||||
Commercial paper | 66,721 | 1,545 | 4.61 | % | 39,576 | 833 | 4.24 | % | ||||||||||
Other borrowings | 531 | 16 | 5.99 | % | 361 | 12 | 6.70 | % | ||||||||||
163,945 | 4,369 | 5.30 | % | 133,796 | 2,974 | 4.48 | % | |||||||||||
Total interest-bearing liabilities | 1,201,959 | 20,742 | 3.47 | % | 1,149,887 | 15,530 | 2.72 | % | ||||||||||
Total noninterest-bearing liabilities | 240,525 | 252,026 | ||||||||||||||||
Total liabilities | 1,442,484 | 1,401,913 | ||||||||||||||||
Stockholders' equity | 152,685 | 140,485 | ||||||||||||||||
Total liabilities and stockholders' equity | $ | 1,595,169 | $ | 1,542,398 | ||||||||||||||
Net interest income (tax equivalent) | $ | 30,357 | $ | 31,071 | ||||||||||||||
Average interest rate spread | 3.49 | % | 3.80 | % | ||||||||||||||
Interest expense as percentage of average earning assets | 2.82 | % | 2.17 | % | ||||||||||||||
Net interest margin | 4.14 | % | 4.35 | % |