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Eastern Virginia Bankshares
217 Duke Street
Tappahannock, VA 22560
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Contact: Ron Blevins
Chief Financial Officer
Voice: 804/443-8423
Fax: 804/445-1047
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April 17, 2003
For Immediate Release
Eastern Virginia Bankshares Announces Record Earnings, Declares Dividend
Tappahannock, VA. - At its annual shareholders' meeting today, Eastern Virginia Bankshares (NASDAQ:EVBS) reported record first quarter 2003 earnings of $1.71 million, up 6.1% from the first quarter of 2002. Earnings per share were $0.35, up 6.1% from the $0.33 earned in the comparable quarter of 2002. EVB's first quarter 2003 results produced an annualized return on average equity (ROE) and an annualized return on average assets (ROA) of 13.20% and 1.29%, respectively, compared to 13.70% and 1.39%, respectively for the first three months of 2002.
Joe Shearin President and Chief Executive Officer of EVB, advised shareholders of the in-progress company-wide re-engineering plan to which significant resources are being devoted during the first half of the year. Objectives of the re-engineering plan are to take full advantage of the holding company structure, standardize procedures, improve efficiencies, develop "best practices", and to enhance revenue, utilization of technology and shareholder value. Shearin noted that the record first quarter was driven by an $825 thousand or 15.7% increase in net interest income, a decrease of $128 thousand in loan loss provision expense and an improvement of $225 thousand in the Company's Hanover Bank subsidiary which began operations in the year 2000. These improvements were partially offset by an increase of $901 thousand in noninterest expense, including $209 thousand increase in consulting fees related to the re-engineering process. The Company expects the re-engineering expenses to continue through the second quarter of 2003.
Total assets increased by $62.6 million, compared to one year ago, reaching a record level of $546.5 million at March 31, 2003. Average loans for the quarter of $403.3 million were up 13.2% compared to $356.1 million in the first quarter of 2002. Average deposits of $467.3 million were an increase of 14.2% compared to $409.2 million in the same quarter of 2002. Consistent with the slower economy, EVB's nonperforming asset level increased in the first quarter. Nonperforming assets as a percentage of total loans increased to 0.96%, compared to 0.86% at December 31, 2002, but well below the 1.50% at March 31, 2002. Annualized net charge-offs decreased to 0.08% of average loans for the quarter, compared to 0.11% in the first quarter of 2002 and 0.26% for the full year 2002. During the quarter the loan loss reserve increased $222 thousand to $5.97 million or 1.47% of total loans outstanding.
President and CEO Joe Shearin is also pleased to announce that the Board of Directors declared a dividend of $0.14 per share, payable May 9, 2003, to shareholders of record on April 28, 2003.
Eastern Virginia Bankshares, the parent company for Bank of Northumberland, Hanover Bank and Southside Bank, operates 17 retail branches located in the counties of Caroline, Essex, Gloucester, Hanover, King William, Lancaster, Middlesex, and Northumberland. The Company's stock trades on the NASDAQ Small Cap Market System under the symbol EVBS.
Forward-Looking Statements
Certain information contained in this discussion may include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are generally identified by phrases such as "the Company expects," "the Company believes" or words of similar import. Such forward-looking statements involve known and unknown risks including, but not limited to, changes in general economic and business conditions, interest rate fluctuations, competition within and from outside the banking industry, new products and services in the banking industry, risk inherent in making loans such as repayment risks and fluctuating collateral values, problems with technology utilized by the Company, changing trends in customer profiles and changes in laws and regulations applicable to the Company. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reliable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results, performance or achievements of the Company will not differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.
Selected Financial Information (dollars in thousands, except per share data)
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3/31/03 |
3/31/02 |
| Interest income |
$8,773 |
$8,359 |
| Interest expense |
2,695 |
3,106 |
| Net interest income |
6,078 |
5,253 |
| Provision for loan losses |
297 |
425 |
| Noninterest income |
787 |
722 |
| Gain on securities sales |
75 |
2 |
| Noninterest expense |
4,269 |
3,368 |
| Income tax expense |
664 |
572 |
| Net income |
$1,710 |
$1,612 |
| Earnings per share, basic and assuming dilution |
$0.35 |
$0.33 |
| Return on average assets |
1.29% |
1.39% |
| Return on average equity |
13.20% |
13.70% |
| Net interest margin |
4.96% |
4.93% |
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| Balance Sheets |
3/31/03 |
3/31/02 |
| Loans, net of unearned interest |
$406,430 |
$366,848 |
| Total assets |
546,501 |
483,848 |
| Deposits |
472,509 |
420,588 |
| Other borrowings |
15,000 |
11,000 |
| Shareholders' equity |
53,135 |
48,146 |
| Book value per share |
10.95 |
9.84 |
| Allowance for loan losses |
5,970 |
5,561 |
| Nonperforming assets |
3,920 |
5,551 |
| Net charge-offs |
75 |
97 |
| Loan loss reserve % of total loans |
1.47% |
1.51% |
| Nonperforming assets % of total loans and other real estate |
0.96% |
1.50% |
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