Virginia Commerce Takes Earnings Hit Ahead of Possible Sale

Virginia Commerce Bancorp (VCBI) in Arlington took a quarterly hit to earnings after exiting the Troubled Asset Relief Program.

The $2.8 billion-asset company, which earlier this week disclosed that it could put itself up for sale, reported Thursday that its earnings fell 22% from a year earlier, to $4.2 million.

Virginia Commerce's net interest income fell about 2% from a year earlier, to $26.6 million. Its net interest margin compressed by 5 basis points from a year earlier, to 3.73%. The company's loan portfolio was flat compared to a year earlier, at $2.1 billion.

The loan-loss provision fell 31% from a year earlier, to $2.6 million. Net chargeoffs decreased 75% from a year earlier, to roughly $1 million.

Noninterest income rose 76% from a year earlier, to $4.3 million, because of higher fees and $1.4 million in securities gains. Noninterest expense rose 6.3% from a year earlier, to $16.8 million, because of an increase in foreclosure costs and a franchise tax. The company's efficiency ratio fell to 56.37% from 52.95% a year earlier.

Virginia Commerce, which has 28 branches around Washington, said Monday that it is considering selling itself.

"It was most gratifying for the company to end the year with a strong fourth-quarter performance that was capped by our full repayment of Tarp," Peter Converse, Virginia Commerce's chief executive, said in a press release.

Converse said the company had not yet set a schedule for a possible sale. "For those who question the timing of our strategic considerations, I will say that the challenges of the current economic, market and regulatory environment in which community banks operate, as well as unique opportunities which may come up from time to time, make it incumbent upon bank directors to periodically consider strategic options beyond staying the course," he said.