Exhibit 99.1
Commonwealth Bankshares, Inc., Norfolk, VA,
Announces Record Third Quarter Earnings
NORFOLK, Va., Nov. 10 /PRNewswire-FirstCall/ -- Commonwealth Bankshares,
Inc. (Nasdaq: CWBS) today reported record quarter end earnings of $905.3
thousand, an increase of 8.4% over the $835.0 thousand reported in the third
quarter of 2003. For the nine months ended September 30, 2004, the Company
reached a record $2.2 million in net income, an increase of 5.0% over the
comparable period in 2003. On a per share basis, diluted earnings increased 9.1%
to 36 cents for the quarter ended September 30, 2004 compared to 33 cents for
the same period in 2003. Diluted earnings per share equaled 89 cents and 84
cents for the nine months ended September 30, 2004 and 2003, respectively.
Profitability as measured by the Company's return on average assets (ROA)
was 1.07% and 1.16% for the three months ended September 30, 2004 and 2003 and
93% and 1.01% for the nine months ended September 30, 2004 and 2003,
respectively. ROA was impacted by an increase in net income of 8.4% for the
third quarter which was offset by an increase in average assets of $51.5
million or 18.0% from September 30, 2003 to September 30, 2004. The return on
average equity (ROE) was 16.99% and 19.25% for the three months ended
September 30, 2004 and 2003 and 14.41% and 16.72% for the nine months ended
September 30, 2004 and 2003, respectively. The decrease in ROE is the result
of the growth in the third quarter's average equity of $4.0 million or 23.1%
from September 30, 2003 to September 30, 2004.
A fundamental source of the Company's earnings, net interest income, is
defined as the difference between income on earning assets and the cost of
funds supporting those assets. Significant categories of earning assets are
loans and securities, while deposits and short-term borrowings represent the
major portion of interest bearing liabilities. The level of net interest
income is impacted primarily by variations in the volume and mix of these
assets and liabilities, as well as changes in interest rates when compared to
previous periods of operations. Net interest income was $9.4 million for the
nine months ended September 30, 2004, an increase of $1.2 million or 14.6%
over the comparable period in 2003. For the quarter ended September 30, 2004,
net interest income was $3.6 million, up 25.7% over the quarter ended
September 30, 2003.
Total interest income was $15.8 million for the nine months ended
September 30, 2004, an increase of $1.3 million, or 8.9% over the same period
of 2003. For the quarter ended September 30, 2004, total interest income was
$5.8 million, up 16.3% from the quarter ended September 30, 2003. Strong loan
demand continued into the third quarter of 2004 generating record increases in
interest income. Interest income on loans increased $1.5 million or 10.6% to
$15.4 million for the nine months ended September 30, 2004. For the three
months ended September 30, 2004, interest income on loans increased 18.4% to
$5.6 million compared to $4.8 million for the comparable period in 2003.
Interest expense of $6.4 million for the nine months ended September 30,
2004 represented an $84.5 thousand increase from the comparable period in
2003. For the quarter ended September 30, 2004, interest expense was $2.2
million, up $77.8 thousand from the quarter ended September 30, 2003. This
slight increase is due to the decrease in overall rates paid on liabilities as
a result of the lower interest rate environment, which was offset by the
record increase in the Company's average interest bearing liabilities.
Average deposits and short term borrowings increased $18.1 million and $14.4
million, respectively, from September 30, 2004 to September 30, 2003.
Total assets at September 30, 2004 reached a new high of $342.0 million,
up 23.6% or $65.4 million from $276.6 million at September 30, 2003. Total
loans, the Company's largest and most profitable asset, ended the quarter at a
record $289.6 million, up $66.1 million or 29.6% from September 30, 2003. The
favorable financing environment along with the efforts of the Company's
officers to develop new loan relationships combined with the support of
existing customers continue to generate record loan demand for the Company.
About Commonwealth Bankshares
Commonwealth Bankshares, Inc. is the parent of Bank of the Commonwealth
which opened its first office in Norfolk, Virginia, in 1971, creating a
community bank that was attuned to local issues and could respond to the needs
of local citizens and businesses. Over the last three decades, the Company's
growth has mirrored that of the communities it serves. Today, Bank of the
Commonwealth has nine bank branches strategically located throughout the
Hampton Roads region and an extensive ATM network for added convenience. The
Company continues to grow and develop new services, such as Online Banking and
a Corporate Cash Management program and at the same time, maintain the
longstanding commitment to personal service. Our slogan conveys our true
corporate philosophy: "When you bank with us, you bank with your neighbors."
Bank of the Commonwealth offers insurance services through its subsidiary BOC
Insurance Agencies of Hampton Roads, Inc., title services through BOC Title of
Hampton Roads, Inc. and mortgage funding services through one of its newest
subsidiaries, Community Home Mortgage of Virginia, Inc. Additional
information about the company, its products and services, can be found on the
Web at http://www.bankofthecommonwealth.com.
This press release contains forward-looking statements. Words such as
"anticipates," " believes," "estimates," "expects," "intends," "should,"
"will," variations of such words and similar expressions are intended to
identify forward-looking statements. These statements reflect management's
current beliefs as to the expected outcomes of future events and are not
guarantees of future performance. These statements involve certain risks,
uncertainties and assumptions that are difficult to predict with regard to
timing, extent, likelihood and degree of occurrence. Therefore, actual results
and outcomes may materially differ from what may be expressed or forecasted in
such forward-looking statements. Factors that could cause a difference
include, among others: changes in the national and local economies or market
conditions; changes in interest rates, deposit flows, loan demand and asset
quality, including real estate and other collateral values; changes in banking
regulations and accounting principals, policies or guidelines; and the impact
of competition from traditional or new sources. These and other factors that
may emerge could cause decisions and actual results to differ materially from
current expectations. Commonwealth Bankshares, Inc. undertakes no obligation
to revise, update, or clarify forward-looking statements to reflect events or
conditions after the date of this release.
Commonwealth Bankshares, Inc. and Subsidiaries
Selected Financial Information (Unaudited)
(in thousands, except per
share data) Three Months Ended Nine Months Ended
September September September September
30, 2004 30, 2003 30, 2004 30, 2003
Operating Results:
Interest Income $5,764 $4,957 $15,810 $14,521
Interest Expense 2,198 2,120 6,368 6,284
Net interest income 3,566 2,837 9,442 8,237
Provision for loan losses 270 135 1,105 375
Noninterest income 772 454 2,071 1,279
Noninterest expense 2,704 2,065 7,121 6,214
Income before provision for
income taxes 1,364 1,091 3,287 2,927
Provision for income taxes 459 256 1,092 837
Net income $905 $835 $2,195 $2,090
Per Share Data:
Basic earnings $0.45 $0.47 $1.12 $1.20
Diluted earnings $0.36 $0.33 $0.89 $0.84
Book value $10.86 $9.98 $10.86 $9.98
Dividends per share $0.05 $0.04 $0.15 $0.12
Basic weighted average
shares outstanding 2,001,219 1,765,561 1,962,374 1,737,700
Diluted weighted average
shares outstanding 2,729,342 2,825,731 2,722,635 2,823,450
Shares outstanding at
period-end 2,017,351 1,847,123 2,017,351 1,847,123
At Period End
September September
30, 2004 30, 2003
Month End Balance:
Assets $342,045 $276,604
Loans* 289,645 223,537
Loans held for sale 28,798 21,930
Investment securities 8,112 13,220
Deposits 254,538 246,906
Shareholders' equity 21,914 18,431
YTD Average Balance:
Assets $316,101 $275,443
Loans* 253,313 210,813
Loans held for sale 32,605 32,159
Investment securities 9,389 14,632
Deposits 227,138 209,073
Shareholders' equity 20,305 16,662
Ratios:
Return on average assets 0.93% 1.01%
Return on average
shareholders' equity 14.41% 16.72%
Shareholders' equity to
total assets 6.41% 6.66%
Loan loss allowance to loans 1.21% 1.06%
Loan loss allowance to non-
performing assets 180.94% 138.00%
Non-performing assets to
total assets 0.56% 0.62%
Net interest margin (tax
equivalent basis) 4.21% 4.29%
Bank's Tier 1 capital to
average assets 7.56% 8.15%
Bank's Tier 1 capital to
risk weighted assets 8.92% 9.51%
Bank's Total captial to risk
weighted assets 10.14% 10.51%
* Net of unearned income and loans held for sale
SOURCE Commonwealth Bankshares, Inc.
-0- 11/10/2004
/CONTACT: E.J. Woodard, Jr., CLBB, Chairman of The Board, President, and
Chief Executive Officer, of Commonwealth Bankshares, Inc., +1-757-446-6904 or
ewoodard@bocmail.net/
/Web site: http://www.bankofthecommonwealth.com /
(CWBS)
CO: Commonwealth Bankshares, Inc.
ST: Virginia
IN: FIN
SU: ERN