Exhibit 99.1
CENTRAL VIRGINIA BANKSHARES REPORTS THIRD QUARTER EARNINGS, UP 8 Percent.
POWHATAN, VA., October 28, 2004 / PR Newswire / - Central Virginia Bankshares, Inc. (NASDAQ: CVBK) reported third quarter 2004 earnings of $ 1,101,791 an increase of $81,517 or 8 percent when compared to $ 1,020,274 in the third quarter of 2003. On a per share basis, primary earnings were $ 0.49 per share an increase of 5.4 percent versus $ 0.47 per share in the third quarter of the prior year. On a fully diluted basis, net income per share was $0.48 an improvement of 6.6 percent compared to $0.45 in the comparable period of the prior year. For the third quarter, the return on average assets was 1.19 percent versus the prior year’s 1.21 percent. The return on average shareholders equity was 15.53 percent compared to 15.08 percent in last year’s third quarter. Shareholders equity, at quarter end, stood at $30.7 million, an increase of $3.9 million versus the third quarter of 2003. Accordingly, the book value of a share of common stock improved to $13.64 compared to $12.20 in 2003.
For the nine months year to date, net income was $ 3,171,026, an increase of 13.6 percent or $ 380,414 when compared to the prior year’s total of $2,790,612. Year to date, primary earnings per share were up 10.5 percent; $ 1.42 versus $ 1.28, and on a fully diluted basis were $ 1.39 versus $ 1.23 per share, an increase of 13.1 percent
The fully tax equivalent net interest income for the third quarter was $ 3.51 million, an increase of 12.4 percent compared to $ 3.12 million in the third quarter of 2003. The tax equivalent net interest margin improved to 4.08 percent for the quarter compared to 4.0 percent in third quarter 2003. For the year to date, the tax equivalent margin was 4.03 percent versus 4.21 percent in the prior year.
Non-interest income totaled $ 737,893 for the quarter a decline of 12 percent compared to the prior year’s third quarter total of $ 838,629. Secondary market mortgage loan fees continue to lag versus both the prior year's quarter and year to date, due to a significant decline in the volume of mortgage refinancing activity. Non deposit investment product sales, while even with the prior year to date, were also down when compared to the prior year because last year's third quarter had a single nonrecurring large transaction. Year to date, non-interest income is virtually unchanged $2.13 million versus $2.14 million.
Loan loss provision expense for the quarter was $ 93,500 maintaining our reserve at 1.50 percent of net loans. The level of nonperforming assets at quarter end stood at $ 927,804 a slight increase from $830,846 in the second quarter but a significant improvement from the $1.33 million in the third quarter 2003. The reserve for loan losses now represents 288 percent of quarter-end nonperforming assets, a very prudent level.
Average earning assets during the third quarter were $ 343.8 million an increase of $ 31.7 million or 10 percent compared to $312.2 million in the corresponding quarter last year. Average loan balances were $ 177 million, an increase of 16.8 percent from the prior year’s third quarter average balances of $ 151.5 million. The balance of the bank’s investment securities portfolio continued to grow, averaging $ 164.5 million, an increase of 6.7 percent compared with the prior year’s quarterly average of $ 154.2 million, while average overnight funds sold decreased to $ 2.0 million from the comparable quarter of last year’s average of $ 5.5 million. Deposits continued to grow, averaging $ 304.6 million for the quarter a 6.2 percent increase versus last year’s third quarter average of $ 287 million. Average total borrowed funds increased to $ 36.4 million, however, short term borrowings declined by $0.5 million, and term borrowings increased by $ 10 million to average $ 26 million versus $16 million in the third quarter 2003. In addition, total borrowed funds now include the $5 million capital trust preferred long term debt issued in December 2003 and invested in our subsidiary bank in order to buttress its capital. Average total assets grew by $ 33.9 million or 10 percent from $ 336.5 million last year, to $ 370.4 million for the third quarter 2004.
Non-interest expense increased by 7.4 percent to $ 2.54 million in the third quarter 2004 versus $ 2.37 million last year. This increase is attributable to the impact of our new Bellgrade branch which opened in the second quarter of this year. As a result, salaries and benefits for new staff as well as occupancy expense related to the branch would not be reflected in the prior years’ expenses. Other areas with increases were advertising and public relations, legal and professional fees, and other miscellaneous expense. The bank’s efficiency ratio for the quarter was 59.9 percent, virtually unchanged from 59.8 percent in the prior year.
Ralph Larry Lyons, President and CEO of Central Virginia Bankshares, Inc., commented: “Our retail deposit growth continues, however we don’t expect the same double digit growth rates we’ve experienced over the past few years. On the other hand, loan demand has finally begun to show evidence of returning to what for us has been a more historical growth rate. Deposits and borrowings have and will continue to provide the resources to invest in loans, additionally, however in the future you may see a reduction in the balances of our investment securities as they could be liquidated to further fund loan demand. We expect the interest rate environment to slowly increase and return to what would be considered more historically neutral level, coupled with continuing growth and improvement in the general economic conditions in the markets we serve. We anticipate our company will continue to grow, with emphasis on maintaining growth of non-interest income along with prudent ongoing expense control, which together should result in the continuation of our favorable earnings trend in the future.”
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 Chesterfield County and one branch in Henrico County.
Selected Financial Data Follows for Central Virginia Bankshares, Inc.
Central Virginia Bankshares, Inc. | Third Quarter (Unaudited) | Year to Date |
| | 2004 | 2003 | 2003 | 2003 |
| | | | | |
Net Income | 1,101,791 | 1,020,274 | 3,171,026 | 2,790,612 |
Interest & Fees on Loans | 2,866,853 | 2,604,883 | 8,144,896 | 7,759,123 |
Interest on Investments & Funds Sold | 2,271,511 | 2,071,397 | 6,898,132 | 5,782,286 |
Interest on Deposits | 1,507,063 | 1,542,901 | 4,426,047 | 4,400,279 |
Interest on Borrowings | 340,915 | 168,272 | 1,006,726 | 508,967 |
Net Interest Income (FTE) | 3,510,129 | 3,122,137 | 10,259,599 | 9,000,424 |
Non Interest Income | 737,893 | 838,629 | 2,128,574 | 2,138,457 |
Loan Loss Provision | 93,500 | 90,000 | 371,500 | 290,000 |
Interest Expense | 1,847,978 | 1,711,173 | 5,432,773 | 4,909,246 |
Non Interest Expense | 2,544,594 | 2,369,930 | 7,392,662 | 6,657,724 |
Period End Balances: | | | | |
Investment Securities | 159,351,372 | 161,767,851 | | |
Fed Funds Sold | 9,734,000 | 8,102,000 | | |
Loans (net of Unearned Discount) | 178,045,664 | 153,089,621 | | |
Loan Loss Reserve | 2,671,013 | 2,363,693 | | |
Non Interest Bearing Deposits | 39,502,763 | 36,714,770 | | |
Total Deposits | 305,163,021 | 298,172,382 | | |
Borrowings | 36,062,500 | 21,318,500 | | |
Assets | 373,560,509 | 347,570,121 | | |
Period End Shareholders Equity | 30,702,718 | 26,833,570 | | |
| | | | | |
Average Balances: | | | | |
Average Assets | 370,409,590 | 336,500,166 | 367,110,215 | 309,752,303 |
Average Earning Assets | 343,880,510 | 312,185,226 | 339,429,805 | 285,191,785 |
Investment Securities | 164,532,978 | 154,227,937 | 167,611,909 | 132,853,367 |
Federal Funds Sold | 2,023,857 | 5,473,478 | 1,738,445 | 3,751,648 |
Loans (net of Unearned Discount) | 176,961,794 | 151,461,658 | 169,616,781 | 147,560,506 |
Non Interest Bearing Deposits | 39,706,361 | 35,290,444 | 38,063,442 | 31,734,449 |
Total Deposits | 304,672,917 | 286,989,465 | 298,723,878 | 260,778,975 |
FHLB Overnight Advances | 4,500,000 | 5,000,000 | 5,476,277 | 5,000,000 |
FHLB Term Borrowings | 26,000,000 | 16,000,000 | 24,613,139 | 16,000,000 |
Fed Funds Purchased & REPO | 734,815 | 675,652 | 3,302,856 | 803,921 |
Average Shareholders Equity | 28,376,532 | 27,066,898 | 28,932,415 | 26,395,084 |
Average Shares Outstanding - Basic | 2,247,789 | 2,194,064 | 2,239,638 | 2,178,609 |
Average Shares Outstanding - Fully Diluted | 2,294,123 | 2,265,521 | 2,286,305 | 2,275,871 |
| | | | | |
Asset Quality: | | | | |
Charged Off Loans | 46,103 | 26,292 | 183,200 | 76,865 |
Recoveries | 11,800 | 28,729 | 28,270 | 48,860 |
Period End: | | | | |
Non-Accrual Loans | 209,210 | 30,346 | | |
Loans Past Due 90 Days or More | 584,074 | 1,067,598 | | |
Other Non Performing Assets | 124,520 | 140,000 | | |
Other Real Estate | 10,000 | 97,000 | | |
Total Non Performing Assets | 927,804 | 1,334,944 | | |
| | | | | |
Per Share Data & Ratios: | | | | |
Net Income Per Share - Basic | $ 0.49 | $ 0.47 | $ 1.42 | $ 1.28 |
Net Income Per Share - Fully Diluted | $ 0.48 | $ 0.45 | $ 1.39 | $ 1.23 |
Period End Book Value Per Share | $ 13.64 | $ 12.20 | | |
Return on Average Assets | 1.19% | 1.21% | 1.15% | 1.20% |
Return on Average Equity | 15.53% | 15.08% | 14.61% | 14.10% |
Efficiency Ratio | 59.90% | 59.84% | 59.68% | 59.77% |
Average Loans to Average Deposits | 58.08% | 52.78% | 56.78% | 56.58% |
Reserve for Loan Losses / Loans EOP | 1.50% | 1.54% | | |
Net Interest Margin (FTE) | 4.08% | 4.00% | 4.03% | 4.21% |
| | | | | |
SOURCE:
Central Virginia Bankshares, Inc.
CONTACT:
Charles F. Catlett, III - Senior Vice President and Chief Financial Officer, (804) 403-2002
