Exhibit 99
CENTRAL VIRGINIA BANKSHARES REPORTS SECOND QUARTER EARNINGS, UP 10.6 PERCENT
POWHATAN, VA., July 23, 2004 / PR Newswire / - Central Virginia Bankshares, Inc. (NASDAQ: CVBK) reported second quarter 2004 earnings of $ 1,047,410 an increase of $100,690 or 10.6 percent when compared to $ 946,720 in the second quarter of 2003. On a per share basis, primary earnings were $0.47 per share an increase of 7.5 percent versus $0.43 per share in the second quarter of the prior year. On a fully diluted basis, net income per share was $0.46 an improvement of 9.5 percent compared to $0.42 in the comparable period of the prior year. For the second quarter, the return on average assets was 1.14 percent versus the prior year’s 1.23 percent. The return on average shareholders equity improved to 14.47 percent compared to 14.06 percent in last year’s second quarter. At quarter end, shareholders equity was $26.9 million, as compared to $28.7 million in the second quarter of 2003, due principally to the net unrealized securities gains and losses recorded as Other Comprehensive Income in accordance with FASB 115. As a result, the book value of a share of common stock was $11.99 compared to $13.12 in 2003. All per share data reported herein, reflect the effect of a 5 percent stock dividend paid on June 15, 2004.
For the first half year, net income was $2.07 million up by 16.9 percent or $298,896 when compared to the prior year’s total of $1.77 million. For the six months, primary earnings per share were $0.93 versus $0.82, and on a fully diluted basis were $0.91 versus $0.78 per share.
The fully tax equivalent net interest income for the second quarter was $3.38 million, an increase of 12 percent compared to $3.02 million in the second quarter of 2003. The tax equivalent net interest margin was 4.00 percent for the quarter compared to 4.25 percent in second quarter 2003. For the year to date, the tax equivalent margin was 4.00 percent versus 4.30 percent in the comparable period of the prior year. The decline in the net interest margin was anticipated due to what appears to be the end of the prolonged period of low interest rates.
Non-interest income ended the quarter at $741,924, an increase of 8.9 percent over the prior year’s second quarter total of $681,397. This improvement is a direct result of a 52 percent increase in commissions generated as a result of increases in sales volume of non-deposit investment products, and gains realized on the sales of securities available for sale as part of our regular portfolio management process. Offsetting these gains, were a 10 percent decline in deposit fees and charges, and 55 percent lower profits from secondary market mortgage loan sales as a result of slower activity than experienced in prior periods.
The loan loss provision expense for the quarter was $135,000, maintaining the reserve at 1.51 percent of net loans. Nonperforming assets declined dramatically to $831 thousand from $2.98 million at the end of the first quarter 2004. The reserve for loan losses now represents 314 percent of quarter-end nonperforming assets. In view of the recent growth of the loan portfolio and the inherent risks therein, we consider the level of our reserve is both reasonable and prudent.
Average earning assets in the second quarter were $338.2 million an increase of $54.4 million or 19 percent compared to $ 283.8 million in the corresponding quarter last year. Average loan balances increased to $169.8 million, an increase of $19.4 million or 12.9 percent from the prior year’s second quarter average balances of $150.4 million. The bank's average investment securities portfolio continued it’s growth averaging $165.8 million, representing an increase of $37.2 million or 29 percent compared with the prior year’s quarterly average of $128.7 million, while average overnight funds sold decreased to $2.0 million from $3.4 million in the comparable quarter of last year. Deposits continued their growth, averaging $298.1 million for the quarter a $41.1 million or 16 percent increase versus last year’s second quarter average of $257 million. Total borrowed funds averaged $38.2 million, an increase of $16.2 million over 2003’s second quarter average of $22 million primarily due to $10 million in longer term borrowings initiated to lock in future funding costs at the current historically low interest rates, and the company’s $5 million capital trust preferred issue conducted in December 2003. Short term borrowings average remained relatively unchanged at $7.2 million, versus $7.0 million in the second quarter 2003. Average total assets grew by $59.7 million or 19.5 percent from $306.7 million last year, to $366.4 million for the second quarter 2004.
Non-interest expense increased by 17.4 percent to $2.5 million in the second quarter 2004 versus $2.2 million last year. This increase is attributable largely to growth in salaries and benefits coupled with increases in occupancy expenses, advertising and public relations expense, as well as other miscellaneous expense. The bank’s efficiency ratio for the quarter increased slightly to 61.8 percent from 58.7 percent in the prior year.
“We continue enjoying solid growth in core deposits, and in this quarter, we experienced long awaited growth in loans…” commented Ralph Larry Lyons, President and CEO of Central Virginia Bankshares, Inc., “… this growth translates into increasing levels of earning assets which, in turn, supports our continued profitability. The recent increase in prime should be favorable to our net interest margin, as long as the interest rate environment remains reasonably stable. We believe that in future quarters, earnings should continue to grow, while our profitability will be contingent on our ability to maximize non-interest income while managing the growth of controllable expenses.”
Readers are cautioned that this press release contains forward-looking statements made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current knowledge and assumptions about future events, and may address issues that involve significant risks, uncertainties, and estimates, that may cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements.
Central Virginia Bankshares, Inc. is the parent of Central Virginia Bank, a 31 year old community bank based in Powhatan County, a suburb of Richmond. It operates eight branch offices, two each in Powhatan and the adjacent county of Cumberland, three in western Chesterfield County, and one branch in western Henrico County.
Selected Financial Data Follows for Central Virginia Bankshares, Inc.
Central Virginia Bankshares, Inc. | Second Quarter (Unaudited) | Year to Date |
| | 2004 | 2003 | 2004 | 2003 |
| | | | | |
Net Income | 1,047,410 | 946,720 | 2,069,234 | 1,770,338 |
Interest & Fees on Loans | 2,683,867 | 2,580,220 | 5,278,043 | 5,154,240 |
Interest on Investments & Funds Sold | 2,272,352 | 1,915,824 | 4,626,621 | 3,710,889 |
Interest on Deposits | 1,455,793 | 1,426,363 | 2,918,984 | 2,857,378 |
Interest on Borrowings | 337,534 | 171,635 | 665,812 | 340,695 |
Net Interest Income (FTE) | 3,378,661 | 3,016,965 | 6,749,470 | 5,878,287 |
Non Interest Income | 741,924 | 681,397 | 1,390,680 | 1,299,828 |
Loan Loss Provision | 135,500 | 90,000 | 278,000 | 200,000 |
Interest Expense | 1,793,327 | 1,597,998 | 3,584,796 | 3,198,073 |
Non Interest Expense | 2,547,148 | 2,169,499 | 4,848,067 | 4,287,794 |
Period End Balances: | | | | |
Investment Securities | 161,345,917 | 143,754,701 | | |
Fed Funds Sold | 3,367,000 | 5,913,000 | | |
Loans (net of Unearned Discount) | 173,400,241 | 150,686,737 | | |
Loan Loss Reserve | 2,611,816 | 2,271,256 | | |
Non Interest Bearing Deposits | 40,977,797 | 37,196,738 | | |
Total Deposits | 301,503,908 | 277,131,466 | | |
Borrowings | 36,061,000 | 21,359,500 | | |
Assets | 365,946,566 | 329,693,363 | | |
Period End Shareholders Equity | 26,925,799 | 28,706,766 | | |
| | | | | |
Average Balances: | | | | |
Average Assets | 366,389,901 | 306,666,231 | 365,457,979 | 296,165,525 |
Average Earning Assets | 338,183,089 | 283,777,469 | 337,333,158 | 273,646,083 |
Investment Securities | 165,806,919 | 128,648,156 | 169,177,179 | 121,983,477 |
Federal Funds Sold | 2,023,857 | 3,407,802 | 1,738,445 | 2,876,464 |
Loans (net of Unearned Discount) | 169,752,527 | 150,356,850 | 165,903,917 | 147,757,789 |
Non Interest Bearing Deposits | 38,868,587 | 31,465,718 | 37,232,955 | 29,926,982 |
Total Deposits | 298,124,879 | 256,997,731 | 295,716,671 | 247,456,516 |
FHLB Overnight Advances | 4,500,000 | 6,000,000 | 5,969,780 | 6,000,000 |
FHLB Term Borrowings | 26,000,000 | 15,000,000 | 23,912,088 | 15,000,000 |
Fed Funds Purchased & REPO | 2,653,121 | 979,868 | 4,600,986 | 872,265 |
Average Shareholders Equity | 28,947,224 | 26,933,411 | 29,226,703 | 26,104,516 |
Average Shares Outstanding - Basic | 2,241,902 | 2,177,614 | 2,235,518 | 2,170,753 |
Average Shares Outstanding - Fully Diluted | 2,286,183 | 2,280,599 | 2,282,354 | 2,274,375 |
| | | | | |
Asset Quality: | | | | |
Charged Off Loans | 133,284 | 24,253 | 137,097 | 50,573 |
Recoveries | 9,496 | 12,517 | 16,470 | 20,131 |
Period End: | | | | |
Non-Accrual Loans | 449,153 | 133,712 | | |
Loans Past Due 90 Days or More | 231,693 | 1,316,354 | | |
Other Non Performing Assets | 140,000 | 140,000 | | |
Other Real Estate | 10,000 | 97,000 | | |
Total Non Performing Assets | 830,846 | 1,687,066 | | |
| | | | | |
Per Share Data & Ratios: | | | | |
Net Income Per Share - Primary | $ 0.47 | $ 0.43 | $ 0.93 | $ 0.82 |
Net Income Per Share - Fully Diluted | $ 0.46 | $ 0.42 | $ 0.91 | $ 0.78 |
Period End Book Value Per Share | $ 11.99 | $ 13.12 | | |
Return on Average Assets | 1.14% | 1.23% | 1.13% | 1.20% |
Return on Average Equity | 14.47% | 14.06% | 14.16% | 13.56% |
Efficiency Ratio | 61.82% | 58.66% | 59.56% | 59.73% |
Average Loans to Average Deposits | 56.94% | 58.51% | 56.10% | 59.71% |
Reserve for Loan Losses / Loans EOP | 1.51% | 1.51% | | |
Net Interest Margin (FTE) | 4.00% | 4.25% | 4.00% | 4.30% |
SOURCE:
Central Virginia Bankshares, Inc.
CONTACT:
Charles F. Catlett, III - Senior Vice President and Chief Financial Officer, (804) 403-2003
