Despite strong asset, loan, and deposit growth, Virginia Commerce Bancorp Inc. in Arlington reported a sharp decline in first-quarter profits as asset quality continued to weaken.
The $2.5 billion-asset company said Thursday that net income fell 36% from a year earlier, to $4.2 million, and diluted earnings per share fell nearly 38%, to 15 cents. The average EPS estimate of analysts polled by Thomson Financial was 22 cents.
The company increased its loss provision more than tenfold, to $4.1 million, as nonperforming assets and loans at least 90 days past due swelled to $25.2 million, from $4.4 million three months earlier. It charged off $946,000 in the quarter and said that as it "works through the process of resolving nonperforming loans, additional chargeoffs are anticipated."
There were some bright spots. Net interest income rose 8.8%, to $19.5 million, largely because of a 23.3% increase in loans from a year earlier, to $2.1 billion. Deposits rose 18.1%, to $2 billion, and assets rose 21.3%.
In heavy trading, Virginia Commerce's shares were down 15.7% late Thursday, to $7.50.
