-
Hampton Roads Bankshares (HMPR) of Norfolk, Va., has found new buyers for three of its Gateway Bank & Trust branches it had previously agreed to sell to ECB Bancorp (ECBE).
April 30
Aided by a decrease in problem loans, improved expense control and robust mortgage-lending activity, Hampton Roads Bancshares narrowed its loss in the first quarter to $7.9 million from $21.4 million in the fourth quarter and $31.6 million the same period last year.
The $2.1 billion-asset company said after markets closed Tuesday that its total nonperforming assets fell 7% from the prior quarter, to $189.8 million, and have now declined in six consecutive quarters. Though its problem assets remain elevated, equaling 8.9% of total assets, the improved credit quality allowed the company to reduce its loan-loss provision by nearly half from three months earlier, to $7.3 million.
Like many banking companies, Hampton Roads benefited from a torrent of refinancing activity in the first quarter. The company originated roughly $50 million of loans during the quarter, which led to significant gains in fee income and overall revenues.
A sharp decline in overhead also contributed to the improved results. Its noninterest expense fell 35% from the prior year and 15% from the fourth quarter, to $19.9 million, as the company eliminated branches and sold off business units. Salary and benefits costs rose during the quarter, however, due primarily to commissions paid to mortgage loan officers.
Expenses are likely to continue to improve going forward as Hampton Roads sheds more of its branches. The company has said it wants to sell roughly 10 more branches that are outside its core markets and on Monday announced deals to sell three branches to two North Carolina banks.
