NEWS RELEASE
Contact: B. L. Rakes, President & CEO
Mary G. Staples, PFO
(540) 343-0135
Date: October 22, 1996
FOR IMMEDIATE RELEASE
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SWVA BANCSHARES, INC. ANNOUNCES FIRST QUARTER EARNINGS
Roanoke, Virginia, October 22, 1996: SWVA Bancshares, Inc., the holding
company of Southwest Virginia Savings Bank, FSB, Roanoke, Virginia, announced
earnings for the first quarter of fiscal year 1997.
Net income for the quarter ended September 30, 1996 was affected by a
one-time assessment by the FDIC to recapitalize the Savings Association
Insurance Fund (SAIF). The assessment of $355,000 caused SWVA Bancshares, Inc.
to report a net loss for the quarter of $186,000, or ($0.38) per share.
Operating results not including the one time SAIF Assessment would have
resulted in net income for the quarter ended September 30, 1996 of $108,000 or
$0.22 per share with return on average assets of .65% and return on average
equity of 4.93%.
Net income decreased $252,000 or 381.82% from a net gain of $66,000 for the
three months ended September 30, 1995 to a net loss of $186,000 for the three
months ended September 30, 1996. The decrease was mainly due to the one time
SAIF Special Assessment offset by increased interest earned on mortgage loans.
Interest income increased $27,000, or 2.20% from $1,228,000 for the three
months ended September 30, 1995 to $1,255,000 for the three months ended
September 30, 1996. The increase was mainly a result of additional mortgage
loans put in the Bank's portfolio during the quarter.
Interest expense decreased $23,000 or 3.45% from $667,000 for the three
months ended September 30, 1995 to $644,000 for the three months ended September
30, 1996. The decrease was due mainly to the reduced borrowings during the
quarter ended September 30, 1996. The average borrowings outstanding for the
quarter ended September 30, 1996 was $617,000 as compared to $1.8 million for
the same quarter last year.
Net interest income increased by $50,000 from $561,000 for the three months
ended September 30, 1995 to $611,000 for the three months ended September 30,
1996 due mainly to an increase in interest earned on mortgage loans and a
decrease in interest paid on borrowed funds.
The Bank made no provision for credit losses for the three months ended
September 30, 1996. The allowance for credit losses is $194,000. Management
reviews the Bank's loan portfolio and future additions may become necessary
based upon changing economic conditions, increases in the loan portfolio or
changes in the underlying collateral of the loan portfolio. There were no
non-performing loans on September 30, 1996.
Non-interest income decreased by $27,000, or 23.68% from $114,000 for the
three months ended September 30, 1995 to $87,000 for the three months ended
September 30, 1996. This was mainly the result of a decrease of $27,000 on gains
on loans sold in the secondary market for the three months ended September 30,
1996.
Non-interest expense increased by $325,000, or 58.14% from $559,000 for the
three months ended September 30, 1995 to $884,000 for the three months ended
September 30, 1996, mainly due to the one time SAIF Special Assessment offset by
a reduction in legal expenses and office occupancy and equipment expense.
Non-interest expense not including the special one time SAIF assessment
would have been $531,000 for the three months ended September 30, 1996. This
would have been a decrease of $28,000 as compared to $559,000 for the three
months ended September 30, 1995.
Mr. Rakes, President and Chief Executive Officer stated "Although the SAIF
Assessment has caused us to record a one time charge causing a loss, a future
reduction in SAIF Premiums is expected to decrease non-interest expense."
The Company's assets and stockholders' equity amounted to $69.4 million and
$8.0 million, respectively, at September 30, 1996.
Southwest Virginia Savings Bank, FSB is a federally chartered savings bank,
the deposits of which are insured by the FDIC to the fullest extent provided by
law. The Bank is headquartered in Roanoke, Virginia and operates 5 full-service
banking facilities and a mortgage origination office serving Roanoke City,
Roanoke County, Salem City and adjacent counties. The Bank has served the
community since 1927.
The Bank exceeds all current regulatory capital ratio requirements and
continues to meet the "well capitalized" regulatory definition, the highest such
rating.
SWVA Bancshares, Inc's common stock shares are listed over-the-counter
through the National Daily Quotation System "Pink Sheets" under the symbol
"SWVB".
SWVA BANCSHARES, INC.
(Dollars in thousands, except per share data)
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
Sept 30
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1996 1995
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(unaudited)
Interest income $1,255 $1,228
Interest expense 644 667
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Net interest income 611 561
Provision for credit losses 0 0
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Net interest income after
provision for credit losses 611 561
Noninterest income 87 114
Noninterest expense 884 559
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Income before income taxes (186) 116
Provision for income taxes 0 50
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Net Income $ (186) $ 66
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Earnings per common share $(0.38) 0.13
Return on average assets (1.11%) .41%
Return on average equity (8.60%) 2.85%
Interest rate spread 3.57% 3.22%
Net interest margin 3.92% 3.62%
Noninterest expense to average assets 5.28% 3.40%
CONDENSED CONSOLIDATED BALANCE SHEETS
Sept 30 June 30
1996 1996
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(unaudited)
Cash and investments $ 6,860 $ 9,103
Mortgage-backed and related securities 9,946 7,939
Loans held for sale 444 985
Loans receivable, net 49,783 46,757
Property and equipment, net 1,644 1,662
Other assets 782 541
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Total assets $69,459 $66,987
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Deposits $56,506 $57,643
Advances FHLB 3,500 0
Accrued expenses and other liabilities 1,391 669
Stockholders' Equity 8,062 8,675
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Total liabilities and stockholders' equity $69,459 $66,987
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Nonaccrual and 90 days past due loans $ -0- $ 0
Total nonperforming assets $ -0- $ 0
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Allowance for credit losses
to nonperforming assets .00% .00%
Nonperforming loans to total loans .00% .00%
Nonperforming assets to total assets .00% .00%
Book value per share $15.49 (1) 15.97 (1)
(1) Book value per share has been calculated by taking Stockholders' Equity and
dividing by the number of shares outstanding. Shares outstanding on June
30, 1996 were 543,190. Shares outstanding on September 30, 1996 were
520,434.