- Net loss in the quarter of $31.7 million
- Provision expense declined to $21.3
million
- $46.1 million decline in nonperforming assets during
the quarter
- Construction and Development loans decline nearly
17%
Hampton Roads Bankshares, Inc. (the "Company") (Nasdaq:HMPRD), the
holding company of Bank of Hampton Roads and Shore Bank, today
announced financial results for the first quarter of 2011. The
Company reported a net loss to common shareholders of $31.7 million
for the quarter, compared to a net loss to common shareholders of
$40.5 million for the first quarter of 2010. In addition, the
Company reported a decline of $46.1 million in nonperforming assets
during the quarter, marking the second straight quarterly decline
in nonperforming assets.
"We are pleased with the continuing decline in our nonperforming
assets," said John A. B. "Andy" Davies, Jr., President and Chief
Executive Officer. "Our strategic focus remains on exiting the
problem assets on our balance sheet while returning the Company to
profitability."
As of March 31, 2011, total assets were $2.7 billion, down from
$2.9 billion at both December 31, 2010 and March 31,
2010. During the quarter, loans outstanding continued to
decline as a result of limited origination activity and resolutions
and charge-offs of nonperforming loans. Gross loans ended the
quarter at $1.8 billion, compared to $2.0 billion and $2.4 billion
at December 31, 2010 and March 31, 2010,
respectively. Specifically, construction lending declined over
$80 million during the quarter, or nearly 17%, to $395 million at
March 31, 2011. Total deposits declined during the first
quarter of 2011 to $2.3 billion from $2.4 billion at December 31,
2010 and $2.6 billion at March 31, 2010 as the Company continued to
reduce its excess cash position and reduce its reliance on
wholesale funding.
As of March 31, 2011, the Company exceeded regulatory capital
minimums and Bank of Hampton Roads and Shore Bank were both
considered "well-capitalized" under the risk-based capital
standards. As of March 31, 2011, the Company's total
risk-based capital ratio was 10.73%.
During the quarter, nonperforming assets declined from $315.4
million at December 31, 2010 to $269.3 million at March 31,
2011. Nonperforming assets represented 9.9% of total assets at
March 31, 2011, down from 10.9% of total assets at December 31,
2010.
Net interest income for the first quarter of 2011 was $18.2
million, compared to $18.4 million for the quarter ended December
31, 2010 and $21.9 million for the prior year quarter. Declines in
the Company's loan portfolio reduced interest income for the
quarter compared to prior quarters, offset somewhat by reductions
in both deposit balances and associated deposit costs. The
provision for loan losses was $21.3 million for the quarter,
compared to $27.9 million and $45.6 million for the quarters ended
December 31, 2010 and March 31, 2010, respectively.
Noninterest income improved slightly from $1.8 million in the
fourth quarter of 2010 to $2.1 million in the first quarter of 2011
as lower impairments on foreclosed assets offset continued low
levels of mortgage banking revenue. Noninterest income in the
prior year quarter was $5.6 million, reflecting the low level of
foreclosed assets on the balance sheet at that
time. Noninterest expense increased during the quarter, from
$26.9 million to $30.7 million due primarily to a one time
adjustment to FDIC insurance costs of $5.4 million, increased costs
related to managing nonperforming assets and continuing high legal
expenses.
As previously disclosed, on April 27, 2011, the Company
conducted a one for twenty five reverse stock split. All share
and per share data for the periods presented have been adjusted to
reflect the reverse stock split.
Separately, the Company today requested the withdrawal of its
$100 million shelf registration statement filed in October of 2009.
The Company has determined that the registration is no longer
contemplated as part of its capital plan.
About Hampton Roads Bankshares
Hampton Roads Bankshares, Inc. is a bank holding company that
was formed in 2001 and is headquartered in Norfolk,
Virginia. The Company's primary subsidiaries are Bank of
Hampton Roads, which opened for business in 1987, and Shore Bank,
which opened in 1961 (the "Banks"). The Banks engage in
general community and commercial banking business, targeting the
needs of individuals and small to medium-sized
businesses. Currently, Bank of Hampton Roads operates
forty-eight banking offices in Virginia and North Carolina doing
business as Bank of Hampton Roads and Gateway Bank & Trust
Co. Shore Bank serves the Eastern Shore of Maryland and
Virginia through eight banking offices and fifteen ATMs. Through
various affiliates, the Banks also offer mortgage banking services,
insurance, and investment products. Shares of the Company's
common stock are traded on the NASDAQ Global Select Market under
the symbol "HMPRD." Additional information about the Company
and its subsidiaries can be found at
www.hamptonroadsbanksharesinc.com.
Use of Non-GAAP Financial Measures
This earnings press release contains GAAP financial measures and
non-GAAP financial measures where management believes it to be
helpful in understanding our results of operations or financial
position. Where non-GAAP financial measures are used, the
comparable GAAP financial measure, as well as the reconciliation to
the comparable GAAP financial measure, can be found in the Form 8-K
filed related to this release. The Form 8-K can be found on
the EDGAR website of the Securities and Exchange Commission (the
"SEC") at www.sec.gov or our website at
www.hamptonroadsbanksharesinc.com.
Caution About Forward-Looking Statements
Certain statements made in this earnings press release may
constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of
1995. Forward-looking statements are statements that include
projections, predictions, expectations, or beliefs about events or
results or otherwise are not statements of historical facts, such
as statements about exiting problem assets and returning the
Company to profitability. Although the Company believes that
its expectations with respect to such forward-looking statements
are based upon reasonable assumptions within the bounds of its
existing knowledge of its business and operations, there can be no
assurance the Company will be able to exit its problem assets or
return to profitability or 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. Factors that could cause
actual events or results to differ significantly from those
described in the forward-looking statements include, but are not
limited to those described in the cautionary language included
under the headings "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2010, as amended, Quarterly Report on Form 10-Q for
the quarter ended March 31, 2011and other filings made with the
SEC.
Hampton Roads Bankshares,
Inc. |
Financial
Highlights |
Unaudited |
(in thousands, except per share
data) |
|
|
|
|
|
|
|
|
|
|
|
(as restated) |
Operating Results |
Q1 2011 |
Q4 2010 |
Q1 2010 |
|
|
|
|
Interest income |
$ 27,183 |
$ 28,583 |
$ 34,095 |
Interest expense |
8,959 |
10,197 |
12,162 |
Net interest income |
18,224 |
18,386 |
21,933 |
Provision for loan losses |
21,314 |
27,865 |
45,613 |
Noninterest income |
2,125 |
1,751 |
5,601 |
Noninterest expense |
30,659 |
26,918 |
20,980 |
Income tax expense |
44 |
40 |
62 |
Net loss |
(31,668) |
(34,686) |
(39,121) |
Preferred stock dividend and accretion of
discount |
-- |
-- |
1,375 |
Net loss available to common
shareholders |
(31,668) |
(34,686) |
(40,496) |
|
|
|
|
|
|
|
|
Per Share Data |
|
|
|
|
|
|
|
Loss per share: |
|
|
|
Basic |
$ (0.95) |
$ (1.25) |
$ (45.74) |
Diluted |
(0.95) |
(1.25) |
(45.74) |
Common dividends declared |
-- |
-- |
-- |
Book value per common share |
4.79 |
5.71 |
(55.48) |
Book value per common share - tangible |
4.48 |
5.39 |
(69.41) |
|
|
|
|
|
|
|
|
Balance Sheet at
Period-End |
|
|
|
|
|
|
|
Total assets |
$ 2,717,383 |
$ 2,900,156 |
$ 2,946,147 |
Gross loans |
1,806,447 |
1,958,767 |
2,350,398 |
Allowance for loan losses |
109,990 |
157,253 |
151,226 |
Total securities |
373,267 |
358,600 |
208,659 |
Intangible assets |
10,371 |
10,858 |
12,343 |
Total deposits |
2,271,002 |
2,420,161 |
2,565,154 |
Total borrowings |
262,562 |
263,206 |
275,260 |
Shareholders' equity |
159,863 |
190,795 |
86,186 |
Shareholders' equity - tangible |
149,492 |
179,937 |
73,843 |
Common shareholders' equity |
159,863 |
190,795 |
(49,155) |
Common shareholders' equity - tangible |
149,492 |
179,937 |
(61,498) |
|
|
|
|
|
|
|
(as restated) |
Daily Averages |
Q1 2011 |
Q4 2010 |
Q1 2010 |
|
|
|
|
Total assets |
$ 2,810,261 |
$ 2,979,823 |
$ 3,004,292 |
Gross loans |
1,927,129 |
2,049,038 |
2,425,027 |
Total securities |
366,543 |
260,109 |
206,203 |
Intangible assets |
10,641 |
11,115 |
12,640 |
Total deposits |
2,340,879 |
2,519,922 |
2,556,681 |
Total borrowings |
262,893 |
265,668 |
276,890 |
Shareholders' equity |
183,764 |
166,313 |
189,639 |
Shareholders' equity - tangible |
173,123 |
155,198 |
176,999 |
Common shareholders' equity |
183,764 |
166,313 |
54,536 |
Common shareholders' equity - tangible |
173,123 |
155,198 |
41,896 |
Interest-earning assets |
2,477,077 |
2,621,497 |
2,626,934 |
Interest-bearing liabilities |
2,383,193 |
2,549,412 |
2,596,624 |
|
|
|
|
|
|
|
|
Financial Ratios |
|
|
|
|
|
|
|
Return on average assets |
-4.57% |
-4.62% |
-5.47% |
Return on average common equity |
-69.89% |
-82.74% |
-301.15% |
Return on average common equity -
tangible |
-74.19% |
-88.67% |
-392.00% |
Net interest margin |
2.98% |
2.78% |
3.39% |
Efficiency ratio |
150.67% |
131.69% |
76.20% |
Tangible common equity to tangible
assets |
5.52% |
6.23% |
-2.10% |
|
|
|
|
Nonperforming Assets at
Period-End |
|
|
|
|
|
|
|
Nonaccrual loans - ASC 310-30 |
$ 12,574 |
$ 19,431 |
$ 51,502 |
Nonaccrual loans - all other |
185,134 |
236,561 |
199,919 |
Total nonaccrual loans |
197,708 |
255,992 |
251,421 |
Loans 90 days past due and still accruing
interest |
770 |
-- |
-- |
Repossessed assets |
70,790 |
59,423 |
25,286 |
Total nonperforming assets |
269,268 |
315,415 |
276,707 |
|
|
|
|
|
|
|
|
Asset Quality Ratios |
|
|
|
|
|
|
|
Annualized net chargeoffs (recoveries) to
average loans |
-14.43% |
-9.21% |
-4.53% |
Nonperforming loans to total loans |
10.99% |
13.07% |
10.70% |
Nonperforming assets to total assets |
9.91% |
10.88% |
9.39% |
Allowance for loan losses to total loans |
6.09% |
8.03% |
6.43% |
CONTACT: Stephen P. Theobald
Executive Vice President, Chief Financial Officer
(757) 217-1000
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