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TransCommunity Financial Corporation Reports 2007 Earnings
(Market Wire Via Thomson Dialog NewsEdge) GLEN ALLEN, VA, February 19 / MARKET WIRE/ --
TransCommunity Financial Corporation (OTCBB: TCYF) (www.tcfcorp.com) announced the results of operations for the year
2007. Net income for the year ended December 31, 2007 was $2.5 million, or
$0.54 per share (basic and diluted), versus net income of $117 thousand, or
$0.03 per share for the same period during 2006.
Results for 2007 were significantly affected by recognition at year-end of
a deferred tax asset totaling $3.3 million, arising primarily from
recognition by the Company of the net operating loss carry forwards
generated since the Company's inception. As a result of recognizing this
deferred tax asset, the Company expects to incur tax expense related to
income earned in 2008 and subsequent years.
Without recognition of this deferred tax asset, performance for 2007 would
have been a loss of $829 thousand, versus net income of $117 thousand for
2006. Inclusive of the deferred tax asset, the return on average assets
for 2007 was 1.16% compared to .06% for 2006. Return on average equity for
2007 was 8.23% compared to 0.39% for 2006.
During 2007, total assets grew by 20%, led by strong growth in the loan
portfolio of 36%. Although the Company's employee headcount remained
constant during 2007, noninterest expenses grew 19% to $10.6 million,
reflecting one-time costs associated with the consolidation of the
Company's four banking charters, and centralization of many back-room
operational functions.
The Company's net interest margin for 2007 was 5.13% versus 5.14% for 2006.
Although the Company was able to maintain its historic high level of net
interest margin during 2007, this key profitability indicator is expected
to decline in 2008 as a result of the actions of the Federal Reserve Board
to lower interest rates.
During 2007, as part of the consolidation of its bank charters, the Company
centralized its credit administration function, and hired its first chief
credit officer. Following consolidation, the new chief credit officer
performed a full review of the entire loan portfolio. This review, plus
several credit downgrades in the final quarter of the year, resulted in an
increase in the allowance for loan losses during 2007 of $1.6 Million. At
December 31, 2007 the allowance for loan losses stands at $3.0 million, or
1.48% of total loans. At December 31, 2006, the allowance for loan losses
was $1,790,459, or 0.93% of total loans.
Commenting on these results, TransCommunity President & Chief Executive
Officer Bruce Nolte noted that, "2007 was a year of incredible challenges.
We managed to continue to grow the Company while at the same time
undergoing a major restructuring; and in the last half of the year, we
negotiated and announced two mergers with Community Bankers Acquisition
Corporation ('CBAC') and Bank of Essex ('BOE').
"Achieving strong growth and a high Net Interest Margin. Consolidating
four bank charters. Negotiating two mergers. Our ability to do all these
things simultaneously reflects the commitment of our board of directors and
the hard work of our wonderful employees. Without their support and hard
work, these favorable results could not have been achieved. As we enter
2008, the Company is positioned for growth and profitability. The mergers
with CBAC and BOE will add significantly to this potential. The resulting
company will be doing business in some of the best markets in the country.
With consolidated capital of over $120 Million, the resulting company will
be well positioned for future success."
At December 31, 2007, total assets were $238.2 million versus $198.4
million at December 31, 2006. Loans, net of the allowance for loan losses,
equaled $202.4 million, as compared with $149.3 million at year-end 2006.
Total deposits at December 31, 2007 were $203.6 million, representing
growth of 23.4% from $165 million at year-end 2006.
December 31, December 31,
2007 2006
------------ ------------
Unaudited
Assets (dollars in thousands)
Cash and due from banks $ 2,204 $ 3,669
Federal funds sold 2,107 1,422
------------ ------------
Total cash and cash equivalents 4,311 5,091
Securities available for sale,
at fair value 10,243 13,597
Securities held to maturity, fair value
of $6,393 and $21,286 at December 31,
2007 and December 31, 2006, respectively 6,400 21,420
Loans 205,480 151,399
Allowance for loan losses (3,036) (2,065)
------------ ------------
Total loans, net 202,444 149,334
Premises and equipment, net 8,205 6,689
Other investments 938 896
Assets from discontinued operations, net - 88
Deferred tax asset 3,312 -
Other assets 2,418 1,330
------------ ------------
Total assets $ 238,271 $ 198,445
------------ ------------
Liabilities
Deposits:
Demand:
Noninterest bearing $ 20,390 $ 20,450
Interest bearing 41,768 37,850
Savings 10,174 9,478
Time 131,266 97,195
------------ ------------
Total deposits 203,598 164,973
Note payable - 500
Federal funds purchased - 1,517
Accrued interest payable 682 540
Liabilities from discontinued
operations, net - 10
Accrued expenses and other liabilities 758 352
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Total liabilities $ 205,038 $ 167,892
------------ ------------
Stockholders' Equity
Common stock (25,000,000 shares authorized
$.01 par value) 4,586,741 and 4,581,741
shares issued and outstanding
at December 31, 2007 and
December 31, 2006, respectively 46 46
Additional paid in capital 39,926 39,809
Accumulated deficit (6,764) (9,262)
Accumulated other comprehensive
income (loss) 25 (40)
------------ ------------
Total stockholders' equity $ 33,233 $ 30,553
------------ ------------
Total liabilities and
stockholders' equity $ 238,271 $ 198,445
------------ ------------
TRANSCOMMUNITY FINANCIAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2007 and 2006
2007 2006
-------- --------
(Dollars and
shares in
thousands, except
per share data)
Interest and dividend income
Interest on loans, including fees $ 15,795 $ 12,366
Interest on federal funds sold 570 1,115
Interest on debt securities-taxable 711 765
Dividends on equity securities 67 61
-------- --------
Total interest and dividend income 17,143 14,307
Interest expense
Interest on deposits 6,628 4,475
Interest on secured borrowings - 471
Interest on other borrowed funds 48 12
-------- --------
Total interest expense 6,676 4,958
-------- --------
Net interest income 10,467 9,349
Provision for loan losses 1,686 493
-------- --------
Net interest income after provision for loan losses 8,781 8,856
-------- --------
Noninterest income
Bank service charges and fees 1,110 1,011
-------- --------
Total noninterest income 1,110 1,011
-------- --------
Noninterest expense
Salaries and employee benefits 5,433 4,711
Occupancy expenses 723 689
Equipment expenses 699 600
Other operating expenses 3,788 2,933
-------- --------
Total noninterest expense 10,643 8,933
-------- --------
(Loss) income from continuing operations before
income taxes (752) 934
Income tax expense (benefit) (3,325) 15
-------- --------
Net income from continuing operations 2,573 919
Net loss from discontinued operations (77) (802)
-------- --------
Net income $ 2,496 $ 117
-------- --------
Net income per share from continuing operations
(basic and diluted) $ 0.56 $ 0.20
-------- --------
Net income per share (basic and diluted) $ 0.54 $ 0.03
-------- --------
Weighted average number of shares outstanding 4,587 4,582
Additional Information About the Mergers and Where to Find It
In connection with the proposed mergers, CBAC has filed with the Securities
and Exchange Commission (the "SEC") a registration statement on Form S-4
containing a preliminary joint proxy statement/prospectus to register the
shares of CBAC common stock to be issued to the shareholders of the Company
and will file with the SEC a registration statement on Form S-4 to register
the shares of CBAC common stock to be issued to the shareholders of BOE. A
definitive joint proxy statement/prospectus will be sent to the
shareholders of CBAC and of BOE or the Company, as applicable, seeking
their approval of the applicable merger. In addition, each of the Company,
BOE and CBAC may file other relevant documents concerning the proposed
merger with the SEC.
WE URGE INVESTORS AND SECURITY HOLDERS TO READ THE REGISTRATION STATEMENTS
ON FORM S-4 AND THE JOINT PROXY STATEMENT/PROSPECTUSES INCLUDED WITHIN THE
REGISTRATION STATEMENTS AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH
THE SEC IN CONNECTION WITH THE PROPOSED MERGERS, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT BOE, THE COMPANY, CBAC AND THE PROPOSED
TRANSACTION. Investors and security holders may obtain free copies of these
documents through the website maintained by the SEC at http://www.sec.gov.
Free copies of the joint proxy statement/prospectus relating to the
proposed merger of CBAC with BOE also may be obtained by directing a
request by telephone or mail to: BOE Financial Services of Virginia, Inc.,
1325 Tappahannock Blvd, P.O. Box 965, Tappahannock, VA 22560, Attention:
Investor Relations (telephone: (804) 443-4343), or by accessing BOE's
website at http://www.bankofessex.com under "Investor Relations," and free
copies of the joint proxy statement/prospectus relating to the proposed
merger of CBAC with the Company also may be obtained by directing a request
by telephone or mail to: TransCommunity Financial Corporation, 4235
Innslake Drive, Glen Allen. VA 23060, Attention: Investor Relations
(telephone: (804) 934-9999), or by accessing the Company's website at
http://www.TCFCorp.com under "Investor Relations." Free copies of both
joint proxy statement/prospectus also may be obtained by directing a
request by telephone or mail to: Community Bankers Acquisition Corporation,
9912 Georgetown Pike, Suite D203, Great Falls, VA 22066, Attention:
Investor Relations (telephone : (703) 759-0751). The information on BOE's
and the Company's websites is not, and shall not be deemed to be, a part of
this release or incorporated into other filings either company or CBAC
makes with the SEC.
BOE, the Company and CBAC and their respective directors, executive
officers and members of management may be deemed to be participants in the
solicitation of proxies from the shareholders of BOE and the Company, as
applicable, and/or CBAC in connection with the merger. Information about
the directors and executive officers of BOE is set forth in the proxy
statement for BOE's 2007 annual meeting of shareholders filed with the SEC
on April 13, 2007. Information about the directors and executive officers
of the Company is set forth in the proxy statement for the Company's 2007
annual meeting of shareholders filed with the SEC on April 23, 2007.
Information about the directors and executive officers of CBAC is set forth
in the Annual Report on Form 10-K filed with the SEC on June 29, 2007.
Additional information regarding the interests of these participants and
other persons who may be deemed participants in the merger may be obtained
by reading the joint proxy statement/prospectus regarding the merger when
it becomes available.
Caution Regarding Forward-Looking Statements
Statements made in this release, other than those concerning historical
financial information, may be considered forward-looking statements, which
speak only as of the date of this release and are based on current
expectations and involve a number of assumptions. These include statements
as to the anticipated benefits of the merger, including future financial
and operating results, cost savings and enhanced revenues that may be
realized from the merger as well as other statements of expectations
regarding the merger and any other statements regarding future results or
expectations. The Company intends such forward-looking statements to be
covered by the safe harbor provisions for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995 and is
including this statement for purposes of these safe harbor provisions. The
Company's ability to predict results, or the actual effect of future plans
or strategies, is inherently uncertain. Factors which could have a material
effect on the operations and future prospects of each of BOE, the Company
and CBAC and the resulting company, include but are not limited to: (1) the
businesses of BOE, the Company and/or CBAC may not be integrated
successfully or such integration may be more difficult, time-consuming or
costly than expected; (2) expected revenue synergies and cost savings from
the merger may not be fully realized or realized within the expected time
frame; (3) revenues following the merger may be lower than expected; (4)
customer and employee relationships and business operations may be
disrupted by the merger; (5) the ability to obtain required regulatory and
shareholder approvals, and the ability to complete the merger on the
expected timeframe may be more difficult, time-consuming or costly than
expected; (6) changes in interest rates, general economic conditions,
legislative/regulatory changes, monetary and fiscal policies of the U.S.
government, including policies of the U.S. Treasury and the Federal Reserve
Board; the quality and composition of the loan and securities portfolios;
demand for loan products; deposit flows; competition; demand for financial
services in BOE's and the Company's market areas; their implementation of
new technologies; their ability to develop and maintain secure and reliable
electronic systems; and accounting principles, policies, and guidelines,
and (7) other risk factors detailed from time to time in filings made by
BOE, the Company or CBAC with the SEC. The Company undertakes no obligation
to update or clarify these forward-looking statements, whether as a result
of new information, future events or otherwise.
This release shall not constitute an offer to sell or the solicitation of
an offer to buy securities in any jurisdiction in which such solicitation
would be unlawful.
TransCommunity Financial Corporation
Bruce B. Nolte
President
Glen Allen, Virginia
(804) 934-9999
Copyright ? 2008 Market Wire, Incorporated
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