VCBI Virginia Commerce Bancorp (MM)

Virginia Commerce Bancorp, Inc. (the “Company”), (Nasdaq: VCBI), parent company of Virginia Commerce Bank (the “Bank”), today reported its financial results for the quarter ended March 31, 2013.

First Quarter 2013 Highlights

• Net Income Available to Common Stockholders and Earnings per Diluted Common Share Increased: Net income available to common stockholders increased to $6.0 million, or $0.17 per diluted common share, for the first quarter of 2013. This represented a 21.4% increase in earnings per diluted common share compared to $0.14 per for the first quarter of 2012. Earnings per diluted common share also increased 41.7% sequentially, compared to $0.12 for the fourth quarter of 2012.
• Adjusted Operating Earnings (a non-GAAP measure) Growth: Adjusted operating earning increased to $6.4 million, or $0.18 per diluted common share, for the first quarter of 2013. This compares to $3.1 million, or $0.09 per diluted common share, for the first quarter of 2012, and $5.3 million, or $0.16 per diluted common share, in the fourth quarter of 2012.
• Net Interest Margin Expansion: The net interest margin was up 12 basis points, to 3.85% for the first quarter of 2013, from 3.73% the fourth quarter 2012 and increased 4 basis points from 3.81% in the first quarter of 2012.
• Asset Quality Improved: Non-performing assets decreased 24.8%, from $59.5 million at March 31, 2012, to $44.7 million at March 31, 2013, while sequentially decreasing $5.5 million, or 10.9%. Total troubled debt restructurings (“TDRs”) declined $8.5 million, or 20.0%, from March 31, 2012, to $33.9 million at March 31, 2013, as compared to March 31, 2012, with a sequential decrease of $9.5 million, or 21.9%.
• Significant Improvement in Deposit Mix and Reduced Average Cost of Total Deposits: Non-interest bearing demand deposits represented 19.2% of total deposits at March 31, 2013, compared to 15.0% at March 31, 2012. The average cost of total deposits decreased by 24 basis points from 0.89% for the first quarter of 2012, to 0.65% for the first quarter of 2013.
• Capital Strength and Book Value per Common Share Growth: The ratio of tangible common equity improved to 8.80% at March 31, 2013, as compared to 8.69% and 7.75% at December 31, 2012, and March 31, 2012, respectively. The book value per common share increased to $7.81, as compared to $7.68 and $7.20 at December 31, 2012, and March 31, 2012, respectively.

Peter A. Converse, President and Chief Executive Officer, commented, “We’re off to a solid start in 2013 with first quarter earnings increasing nicely on a year-over-year basis and sequentially. Earnings benefited from a combination of net interest margin improvement, the elimination of TARP dividends at the end of 2012 and decreased loan loss provisioning. While first quarter provisioning expense of $1.8 million was down substantially from $6.0 million for the same period in 2012, management feels that the allowance for loan losses provides sufficient coverage of total non-performing loans at a coverage ratio of 118.4% as of March 31, 2013. Reduced loan loss provisioning was also supported in part by meaningful improvement in problem assets. Non-performing assets and troubled debt restructurings declined 10.9% and 21.9%, respectively, on a linked quarter basis. Non-performing assets of $44.7 million at quarter-end 2013 now represent 1.55% of total assets, down from 1.78% as of December 31, 2012, and 2.01% as of March 31, 2012.”

Converse concluded, “We are eagerly anticipating our pending merger with United Bankshares, Inc. (UBSI), which was announced on January 30, 2013. We believe this partnership will not only create superior value for our stockholders, but will also enable us to better serve our customers and communities as the leading independent community bank operating throughout the most attractive markets in Northern Virginia and the D.C. Metropolitan area. We still expect the merger to close by the latter part of this year, subject to regulatory approvals and the approval of UBSI and VCBI stockholders. Until then, it is business as usual – Virginia Commerce’s management, officers and employees will continue to strive for optimal operating results and to deliver our brand of service excellence to our customers.”

SUMMARY REVIEW OF FINANCIAL PERFORMANCE

Net Income

For the three months ended March 31, 2013, the Company recorded net income available to common stockholders of $6.0 million, or $0.17 per diluted common share, compared to net income available to common shareholders of $4.8 million, or $0.14 per diluted common share, for the three months ended March 31, 2012. The year-over-year earnings improvement was largely attributable to the Company’s repurchase of all of its TARP preferred stock during the fourth quarter of 2012, and related elimination of a $1.4 million effective dividend on preferred stock for the first quarter of 2013 and a $4.1 million decrease in the provision for loan losses, partially offset by a decrease in net interest income of $1.0 million, a $2.4 million decrease in non-interest income and a $1.0 million increase in non-interest expense. The Company’s net income available to common stockholders increased sequentially from $4.2 million, or $0.12 per diluted common share, for the fourth quarter of 2012, primarily due to the $3.5 million reduction in effective dividend on preferred stock related to TARP, a $712 thousand decrease in the provision for loan losses, and a $1.0 million decrease in provision for income taxes, partially offset by a decrease in net interest income of $809 thousand, a $1.8 million decrease in non-interest income and a $804 thousand increase in non-interest expense.

Adjusted operating earnings (a non-GAAP measure) for the three months ended March 31, 2013, were $6.4 million, up $3.3 million, or 107.4%, as compared to $3.1 million for the same period in 2012. On a sequential basis, adjusted operating earnings were up $1.1 million, or 20.0%, for the three months ended March 31, 2013. The year-over-year and sequential increases in the Company’s adjusted operating earnings are mostly due to lower provisioning for loan losses. The Company calculates adjusted operating earnings by excluding impairment loss on securities, realized gains and losses on sale of securities, merger-related expenses, acceleration of the accretion of the preferred stock discount, and certain other non-recurring items from net income available to common stockholders.

Asset Quality and Provisions For Loan Losses

Total non-performing assets and loans 90+ days past due declined $5.5 million sequentially from $50.2 million at December 31, 2012, to $45.0 million at March 31, 2013, and decreased $14.5 million, from $59.5 million at March 31, 2012. As a percentage of total assets, non-performing assets decreased from 1.78% at December 31, 2012, to 1.56% at March 31, 2013, and decreased from 2.01% at March 31, 2012. As of March 31, 2013, the allowance for loan losses represented 1.91% of total loans, compared to 1.95% and 2.11%, at December 31, 2012, and March 31, 2012, respectively. The allowance for loan losses covered 118.4% of total non-performing loans as of March 31, 2013, compared to 112.8% and 97.4%, at December 31, 2012, and March 31, 2012, respectively.

As of March 31, 2013, $20.8 million, or 59.1%, of non-performing loans represented acquisition, development and construction (“ADC”) loans; $6.6 million, or 18.7%, represented non-farm, non-residential loans; $4.6 million, or 13.2%, represented loans on one-to-four family residential properties; and $3.1 million, or 8.9%, represented commercial and industrial (“C&I”) loans. As of March 31, 2013, specific reserves of $16.1 million have been established for non-performing loans and other loans determined to be impaired. The Company continues to pursue an aggressive campaign to reduce non-performing and other impaired loans and is implementing and executing various disposition strategies on an ongoing basis. However, the majority of remaining non-performing loans represent situations which require longer term workout strategies to obtain optimal principal recovery. These strategies are dependent upon project completion, permitting, satisfaction of contract contingencies and other factors.

Included in the loan portfolio at March 31, 2013, are loans classified as troubled debt restructurings (“TDRs”), totaling $33.9 million, a 20.0% decrease from $42.4 million at March 31, 2012. Sequentially, TDRs decreased $9.5 million from $43.5 million at December 31, 2012. TDRs are performing, accruing loans that represent relationships for which a modification to the contractual interest rate or repayment structure has been granted to address a financial hardship. Over 91% of TDRs in the Company’s loan portfolio at March 31, 2013, were performing prior to modification. TDRs make up 1.5% of the total loan portfolio and represent $7.0 million in ADC loans, $17.3 million in non-farm, non-residential real estate loans, $7.1 million in C&I loans and $2.6 million in one-to-four family residential loans. At March 31, 2013, 30.0% of the Company’s TDRs were reviewable TDRs and 70.0% were permanent TDRs. Reviewable TDRs are loans that have been restructured at or will return to a market rate of interest and can include a temporary interest rate modification, partial deferral of interest or principal, or an extension of term. They can return to performing status upon six months of on-time payments following the return to a market rate of interest, but only in the fiscal year following the year of restructure. Permanent TDRs are loans that have been restructured and include a permanent interest rate reduction. They remain in a TDR status until the loan is paid off.

Classified loans were $160.3 million for the quarter ended March 31, 2013, a $10.0 million decrease from $170.3 million at March 31, 2012. Sequentially, classified loans declined slightly from $160.6 million at December 31, 2012. The year-over-year decline in classified loans was largely due to upgrades to loans to a paving contractor, residential real estate developer and commercial real estate owner in the combined total of $22.2 million, charge-offs totaling $17.5 million, loan payoffs resulting from residential real estate sales of $12.8 million, regular payments on loans of $8.6 million, loans refinanced by other banks of $2.7 million and note sales of $2.3 million, partially offset by downgrades for loans to a commercial real estate management company totaling $17.2 million, a new restaurant that experienced delays in opening of $6.6 million and a utilities and public improvements contractor of $4.0 million.

Provisions for loan losses were $1.8 million for the quarter ended March 31, 2013, down $4.1 million, or 69.2%, compared to $6.0 million in the same period in 2012. Sequentially, provisions for loan losses were down $712 thousand, from $2.6 million in the fourth quarter of 2012. Net charge-offs were $2.6 million for the three months ended March 31, 2013, compared to $1.1 million and $9.3 million for the quarters ended December 31, 2012, and March 31, 2012, respectively. The decreases in the allowance for loan losses as a percentage of total loans from March 31, 2012, to March 31, 2013, is due to charge-offs incurred during 2013 being primarily supported by specific reserves in the allowance for loan losses. As a result, the first quarter analysis of the adequacy of the loan loss reserve indicated that loan loss provisioning of $1.8 million was sufficient to maintain appropriate coverage. The $6.7 million reduction in net charge-offs for the three months ended March 31, 2013, compared to the same period in 2012, was primarily due to decreases in net charge-offs in the C&I loan portfolio, decreasing from $4.7 million in 2012 to $455 thousand in 2013 and in the ADC loan portfolio, decreasing $1.4 million, from $3.6 million in 2012 to $2.2 million in 2013.

Net Interest Income and Net Interest Margin

Net interest income was $25.8 million for the first quarter of 2013 and declined $1.0 million, or 3.7%, from the same quarter last year. The net interest margin increased 4 basis points from 3.81% in the first quarter of 2012, to 3.85% for the same period in 2013. On a sequential basis, the net interest margin was up 12 basis points from 3.73% for the fourth quarter of 2012, to 3.85% for the first quarter of 2013. The year-over-year increase in the first quarter net interest margin was due to an improvement in the mix of interest-earning assets and interest-bearing deposits with a reduction in interest-bearing deposit rates, partially offset by lower average yield on loans. The sequential increase was related to an improvement in interest-earning asset mix which contributed to a 12 basis point increase in the average yield in total interest-bearing assets. Interest and dividend income decreased $2.8 million on average total interest-earnings assets of $2.75 billion for the three months ended March 31, 2013, compared to interest and dividend income generated by average total interest-earnings assets of $2.87 billion for the same period in 2012. The decline in interest income is mostly attributable to lower yielding average loans being generated in the current low interest rate environment. Interest expense decreased $1.8 million to $5.4 million generated on an average total interest-bearing liability balance of $2.2 billion for the quarter ended March 31, 2013, from $7.2 million generated on an average total interest-bearing liability balance of $2.3 billion for the same period in 2012. The average rate paid on total interest-bearing liabilities was 1.01% for the first quarter of 2013, as compared to 1.02% for the fourth quarter 2012, and 1.26% for the first quarter of 2012.

Non-Interest Income

For the three months ended March 31, 2013, the Company recognized $2.6 million in non-interest income, compared to non-interest income of $4.9 million for the three months ended March 31, 2012, and $4.4 million for the sequential quarter. Included in the first quarter 2012 non-interest income is a gain on sale of securities of $2.6 million, while the first quarter of 2013 did not include a gain or loss on sale of securities, and the sequential quarter included a gain of $1.5 million on sale of securities.

Fees and net gains on loans held-for-sale were $1.0 million in the first quarter of 2013 and 2012, with a sequential decrease of $550 thousand, or 35.0%. The sequential decrease is related to a slowdown in residential mortgage loan activity, which is the result of weaker demand during the first quarter due to seasonality and changes in mortgage interest rates.

Non-Interest Expense

Non-interest expense increased $1.0 million, or 6.1%, from $16.6 million in the first quarter of 2012, to $17.6 million in the first quarter of 2013. Sequentially, non-interest expense increased $804 thousand, or 4.8%, from $16.8 million for the fourth quarter of 2012. The year-over-year increase was primarily related to an increase of $312 thousand on other real estate owned losses and expenses, and $584 thousand in merger-related expenses. The sequential increase was primarily related to the $584 thousand in merger-related expenses and $771 thousand in higher salaries and employee benefits, which were partially offset by a decrease of $251 thousand in other real estate owned losses and expenses.

Investment Securities

Investment securities decreased $103.1 million, or 17.2%, year-over-year to $495.1 million at March 31, 2013 and were up $1.7 million sequentially from December 31, 2012. There was no gain on sale of securities during the first quarter 2013. During the first quarter of 2012, the Company sold $58.6 million of investment securities resulting in a $2.6 million gain on sale of securities. During the fourth quarter of 2012, the Company sold $24.9 million of investment securities resulting in a $1.5 million realized gain on sale of securities. The investment portfolio contains two pooled trust preferred securities with a book value of $5.1 million, and a market value of $364 thousand at March 31, 2013, for which the Company performs a quarterly analysis to determine whether any other-than-temporary impairment exists. The analysis includes stress tests on the underlying collateral and cash flow estimates based on the current and projected future levels of deferrals, defaults, and prepayments within each pool. There was no recorded impairment loss for the three months ended March 31, 2013, December 31, 2012, and March 31, 2012.

Loans

Loans, net of allowance for loan losses, increased $53.3 million, or 2.5% year-over-year. ADC loans increased $34.3 million, or 13.3%, one-to-four family residential increased $13.7 million or 3.6%, C&I loans were up $7.6 million, or 3.1%, while non-farm, non-residential real estate loans fell $8.7 million, or 0.7%, and multifamily real estate loans decreased $1.2 million, or 1.5%, from March 31, 2012, to March 31, 2013. Sequentially, loans, net of allowance for loan losses, increased $9.9 million, or 0.5%. The sequential increase in loans was primarily attributable to a $10.7 million increase in ADC loans, a $1.8 million increase in non-farm, non-residential loans and a $1.4 million increase in multi-family residential loans, partially offset by a $5.6 million decrease in C&I loans. The sequential increase in ADC loans represented increased funding of new and ongoing construction projects, primarily consisting of single family and multi-family residential properties, as well as one new residential development loan and one new multi-family loan. The increase in owner-occupied non-farm, non-residential loans represented the refinance of several new business and non-profit clients’ operating facilities. The sequential decrease in C&I loans was driven by repayment of credit line borrowings that were previously used to support year-end tax planning and in anticipation of changes in the tax code. The orientation of loan generation efforts and loan mix continues to be reflective of the Bank’s strategic emphasis on building greater market share in commercial lending, owner-occupied commercial real estate and residential real estate lending, while focusing ADC lending and non-owner-occupied commercial real estate lending on select transactions in key markets with solid economic metrics.

Deposits

Total deposits at March 31, 2013, were $2.2 billion, a decrease of $50.9 million, or 2.3%, compared to March 31, 2012, with demand deposits increasing $85.0 million, or 25.3%, savings and interest-bearing demand deposits decreasing $9.8 million, or 0.8%, and time deposits decreasing $126.1 million, or 17.3%. As of March 31, 2013, non-interest bearing demand deposits represented 19.2% of total deposits, compared to 15.0% at March 31, 2012. On a linked quarter basis, deposits decreased $58.5 million, or 2.6%, with demand deposits increasing by $4.5 million, or 1.1%, savings and interest-bearing demand accounts decreasing $37.0 million, or 3.1%, and time deposits decreasing by $25.9 million, or 4.1%. The reduction in time deposits during the past year has been intentional and resulted from a series of interest rate reductions that continued throughout 2012 and into the first quarter of 2013. As a result of deposit rate decreases and an improving deposit mix, the cost of total interest-bearing deposits and total deposits declined from 1.03% and 0.89% for the quarter ended March 31, 2012, to 0.80% and 0.65% for the quarter ended March 31, 2013, respectively.

Capital Levels and Stockholders’ Equity

Stockholders’ equity decreased $42.8 million, or 14.4%, from $296.6 million at March 31, 2012, to $253.8 million at March 31, 2013, with a $67.7 million decline from the repayment of TARP preferred stock and a $3.3 million decrease in other comprehensive income, partially offset by net income available to common stockholders of $23.7 million over the twelve-month period and $4.4 million in proceeds and tax benefits related to the exercise of warrants and options. As a result of these changes, the Company’s Tier 1 capital ratio decreased from 15.55% at March 31, 2012, to 13.67% at March 31, 2013, and its total qualifying capital ratio decreased from 16.81% to 14.92% over the same period. Sequentially, the Company’s Tier 1 and total qualifying capital ratios are up 42 and 41 basis points, respectively, with net income available to common stockholders of $6.0 million in the first quarter being partially offset by a decrease of $903 thousand in other comprehensive income. The Company’s tangible common equity ratio increased from 7.75% at March 31, 2012, and 8.69% at December 31, 2012, to 8.80% at March 31, 2013. The 105 basis point increase in tangible common equity ratio from March 31, 2012, to March 31, 2013, is primarily due to $23.7 million in retained net income available to common stockholders for the twelve months ended March 31, 2013. Sequentially, the 11 basis point increase in tangible common equity ratio is primarily related to $6.0 million in retained net income available to common stockholders for the first quarter of 2013, partially offset by increase of $59.7 million in total tangible assets and a decrease of $903 thousand in other comprehensive income.

ABOUT VIRGINIA COMMERCE BANCORP, INC.

Virginia Commerce Bancorp, Inc. is the parent bank holding company for Virginia Commerce Bank, a Virginia state chartered bank that commenced operations in May 1988. The Bank pursues a traditional community banking strategy, offering a full range of business and consumer banking services through twenty-eight branch offices, one residential mortgage office and one wealth management services office, principally to individuals and small-to-medium size businesses in Northern Virginia and the Metropolitan Washington, D.C. area.

On January 29, 2013, the Company signed a definitive merger agreement to be acquired by United Bankshares, Inc. For more information about this merger, see the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on January 31, 2013, and the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2013.

NON-GAAP PRESENTATIONS

The Company prepares its financial statements under accounting principles generally accepted in the United States, or “GAAP”. However, this press release also refers to certain non-GAAP financial measures that we believe, when considered together with GAAP financial measures, provide investors with important information regarding our operational performance. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

Adjusted operating earnings is a non-GAAP financial measure that reflects net income available to common stockholders excluding impairment loss on securities, realized gains and losses on sale of securities, acceleration of the accretion of the preferred stock discount, merger-related expenses and certain other non-recurring items. These excluded items are difficult to predict and we believe that adjusted operating earnings provides the Company and investors with a valuable measure of the Company’s operational performance and a valuable tool to evaluate the Company’s financial results. Calculation of adjusted operating earnings for the three months ended March 31, 2013, March 31, 2012 and December 31, 2012, is as follows:

    Three Months Three Months Ended Ended March 31, December 31, (Dollars in thousands) 2013   2012 2012   Net Income Available to Common Stockholders $ 6,036 $ 4,779 $ 4,230 Adjustments to net income available to common stockholders: Realized gain on sale of securities -- (2,592) (1,454) Merger-related expenses 584 -- -- Net tax effect adjustment (204) 907 509   Acceleration of the accretion of the preferred stock discount   --   --   2,061   Adjusted Operating Earnings $ 6,416 $ 3,094 $ 5,346     Earnings per common share-diluted $ 0.17 $ 0.14 $ 0.12 Adjustments to earnings per common share-diluted Realized gain on sale of securities, net tax affect -- $ (0.05) $ (0.02) Merger-related expenses, net tax affect $ 0.01 -- -- Acceleration of the accretion of the preferred stock discount -- -- $ 0.06   Adjusted operating earnings per common share-diluted $ 0.18 $ 0.09 $ 0.16  

The adjusted efficiency ratio is a non-GAAP financial measure that is computed by dividing non-interest expense excluding merger-related expenses, by the sum of net interest income on a tax equivalent basis, and non-interest income excluding realized gains and losses on sale of securities, acceleration of the accretion of the preferred stock discount, merger-related expenses and certain other non-recurring items. We believe that this measure provides investors with important information about our operating efficiency. Comparison of our adjusted efficiency ratio with those of other companies may not be possible because other companies may calculate the adjusted efficiency ratio differently. Calculation of the adjusted efficiency ratio for the three months ended March 31, 2013, and 2012, is as follows:

  Three Months Ended

(Dollars in thousands)

March 31, 2013   2012 Summary Operating Results:   Non-interest expense $ 17,647 $ 16,627 Merger-related expenses 584 -- Adjusted non-interest expense $ 17,063 $ 16,627   Net interest income $ 25,794 $ 26,779   Non-interest income 2,558 4,949 Gain on sale of securities   --   (2,592) Adjusted non-interest income $ 2,558 $ 2,357  

Total net interest income and non-interest income, adjusted (1)

 

$ 28,352 $ 29,136   Efficiency Ratio, adjusted 59.44% 56.36%  

(1) Tax Equivalent Income of $28,708 for the three months ended March 31, 2013 and $29,501 for the three months ended March 31, 2012.

The tangible common equity ratio is a non-GAAP financial measure representing the ratio of tangible common equity to tangible assets. Tangible common equity and tangible assets are non-GAAP financial measures derived from GAAP-based amounts. We calculate tangible common equity for the Company by excluding the balance of intangible assets and outstanding preferred stock issued to the U.S. Treasury from total stockholders’ equity. We calculate tangible assets by excluding the balance of intangible assets from total assets. We had no intangible assets for the periods presented. We believe that this is consistent with the treatment by regulatory agencies, which exclude intangible assets from the calculation of regulatory capital ratios. Accordingly, we believe that these non-GAAP financial measures provide information that is important to investors and that is useful in understanding our capital position and ratios. However, these non-GAAP financial measures are supplemental and are not substitutes for an analysis based on a GAAP measure. As other companies may use different calculations for non-GAAP measures, our presentation may not be comparable to other similarly titled measures reported by other companies. Calculation of the Company’s tangible common equity ratio as of March 31, 2013, March 31, 2012, December 31, 2012 and September 30, 2012, is as follows:

      (Dollars in thousands) As of March 31, December 31 September 30 2013   2012 2012 2012 Tangible common equity:   Total stockholders’ equity $ 253,803 $ 296,637 $ 245,309 $ 311,528   Less: Outstanding TARP senior preferred stock -- 67,670 -- 68,621 Intangible assets   --   --   --   -- Tangible common equity $ 253,803 $ 228,966 $ 245,309 $ 242,907   Total tangible assets $ 2,883,388 $ 2,954,226 $ 2,823,692 $ 3,004,742   Tangible common equity ratio 8.80% 7.75% 8.69% 8.08%  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the Securities and Exchange Act of 1934, as amended, including statements of goals, intentions, and expectations as to future trends, plans, events or results of Company operations and policies, including but not limited to potential benefits of a merger between the Company and United Bankshares, Inc., our outlook on earnings, including our future net interest margin, and statements regarding asset quality, our loan and investment security portfolios, our deposit portfolio and anticipated changes to our deposit costs and balances, projected growth, capital position, capital strategies, our plans regarding and expected future levels of our non-performing assets, business opportunities in our market and other strategic initiatives or transactions, and general economic conditions. When we use words such as “may”, “will”, “anticipates”, “believes”, “expects”, “plans”, “estimates”, “potential”, “continue”, “should”, and similar words or phrases, you should consider them as identifying forward-looking statements. These forward-looking statements are not guarantees of future performance. These statements are based upon current and anticipated economic conditions, nationally and in the Company’s market, interest rates and interest rate policy, competitive factors, and other conditions which by their nature, are not susceptible to accurate forecast, and are subject to significant uncertainty. Because of these uncertainties and the assumptions on which this release and the forward-looking statements are based, actual future operations and results may differ materially from those indicated herein. Readers are cautioned against placing undue reliance on any such forward-looking statements. The Company’s past results are not necessarily indicative of future performance. For additional information regarding factors that could affect the Company's operations and results, see the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, and other reports filed with and furnished to the Securities and Exchange Commission.

Additional Information About the Merger and Where to Find It

This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval.

In connection with the pending merger between United Bankshares, Inc. (“United”) and the Company (the “Company”), United will file with the SEC a registration statement on Form S-4 that will include a proxy statement of the Company and a proxy statement and prospectus of United, as well as other relevant documents concerning the proposed transaction. Stockholders are urged to read the registration statement and the joint proxy statement/prospectus regarding the Merger when it becomes available and any other relevant documents filed with the SEC, as well as any amendments or supplements to those documents, because they will contain important information. You will be able to obtain a free copy of the joint proxy statement/prospectus, as well as other filings containing information about the Company and United at the SEC’s Internet site (http://www.sec.gov). You will also be able to obtain these documents, free of charge, from the Company by accessing the Company’s website at www.vcbonline.com under the tab “About VCB,” then under the heading “Investor Relations.” You will also be able to obtain these documents, free of charge, from United’s website at www.ubsi-inc.com under the tab “Investor Relations.”

United, the Company and their respective directors, executive officers, and certain other members of management and employees of United, the Company and their respective subsidiaries may be deemed to be participants in the solicitation of proxies from stockholders of the Company in connection with the Merger. Information about the directors and executive officers of United is set forth in United’s proxy statement filed with the SEC on April 3, 2013. Information about the directors and executive officers of the Company is set forth in the Company’s proxy statement filed with the SEC on March 22, 2013. Additional information regarding the interests of such participants will be included in the joint proxy statement/prospectus and the other relevant documents filed with the SEC when they become available.

  Virginia Commerce Bancorp, Inc. Financial Highlights (Dollars in thousands, except per share data) (Unaudited)       Three Months Ended Three Months Ended March 31, December 31, 2013   2012   % Change 2012   % Change Summary Operating Results:       Interest and dividend income $31,202 $34,005 -8.2% $32,427 -3.8% Interest expense 5,408 7,226 -25.2% 5,824 -7.1% Net interest income 25,794 26,779 -3.7% 26,603 -3.0% Provision for loan losses 1,847 5,994 -69.2% 2,559 -27.8% Non-interest income 2,558 4,949 -48.3% 4,375 -41.5% Non-interest expense 17,647 16,627 6.1% 16,843 4.8% Income before income taxes 8,858 9,107 -2.7% 11,576 -23.5% Net income $ 6,036 $ 6,142 -1.7% $ 7,752 -22.1% Effective dividend on preferred stock -- 1,363 -100.0% 3,522 -100.0% Net income available to common stockholders $ 6,036 $ 4,779 26.3% $ 4,230 42.7%   Performance Ratios: Return on average assets 0.86% 0.84% 1.03% Return on average equity 9.80% 8.46% 10.20% Net interest margin 3.85% 3.81% 3.73% Efficiency ratio, adjusted 59.44% 56.36% 56.37%   Per Share Data: Earnings per common share-basic $ 0.19 $ 0.15 26.7% $0.13 46.2% Earnings per common share-diluted $ 0.17 $ 0.14 21.4% $0.12 41.2% Average number of shares outstanding: Basic 32,437,500 31,503,351 31,864,436 Diluted 35,147,566 33,547,703 33,874,852       As of March 31,     As of     2013   2012   % Change 12/31/12   % Change Selected Balance Sheet Data: Loans, net $2,152,816 $2,099,484 2.5% $2,142,872 0.5% Investment securities 495,086 598,178 -17.2% 493,424 0.3% Assets 2,883,388 2,954,226 -2.4% 2,823,692 2.11% Deposits 2,186,932 2,237,848 -2.3% 2,245,392 -2.6% Stockholders’ equity 253,803 296,637 -14.4% 245,309 3.5% Book value per common share $7.81 $7.20 8.0% $7.68 1.7%   Capital Ratios (% of risk weighted assets): Tier 1 capital: Company 13.67% 15.55% 13.25% Bank 13.15% 14.93% 12.82% Total qualifying capital: Company 14.92% 16.81% 14.51% Bank 14.41% 16.19% 14.08% Tier 1 leverage: Company 11.06% 12.12% 10.29% Bank 10.69% 11.70% 10.05% Tangible common equity: Company 8.80% 7.75% 8.69%             (Dollars in thousands) As of March 31, As of 2013   2012 12/31/12   09/30/12   Asset Quality: Non-performing assets: Non-accrual loans: Commercial $ 3,136 $ 9,968 $ 3,317 $ 3,443 Real estate-one-to-four family residential: Permanent first and second 2,263 3,060 3,606 5,689 Home equity loans and lines   2,379   3,580   2,498   2,576 Total real estate-one-to-four family residential $ 4,642 $ 6,640 $ 6,104 $ 8,265 Real estate-multi-family residential -- 476 -- -- Real estate-non-farm, non-residential: Owner-occupied 2,561 2,997 1,791 1,804 Non-owner-occupied   4,030   88   3,864   4,731 Total real estate-non-farm, non-residential $ 6,591 $ 3,085 $ 5,655 $ 6,535 Real estate-construction: Residential 7,615 12,122 16,976 10,510 Commercial   13,185   14,232   5,860   16,679 Total real estate-construction $ 20,800 $ 26,354 $ 22,836 $ 27,189 Consumer   16   19   17   18 Total non-accrual loans 35,185 46,542 $ 37,929 $ 45,450 OREO   9,562   12,928   12,302   14,089 Total non-performing assets $ 44,747 $ 59,470 $ 50,231 $ 59,539   Loans 90+ days past due and still accruing: Commercial $ 232 $ -- $ -- $ -- Real estate-one-to-four family residential: Permanent first and second -- 56 -- -- Home equity loans and lines   --   --   --   -- Total real estate-one-to-four family residential $ -- $ 56 $ -- $ -- Real estate-multi-family residential -- -- -- -- Real estate-non-farm, non-residential: Owner-occupied -- -- -- -- Non-owner-occupied   --   --   --   -- Total real estate-non-farm, non-residential $ -- $ -- $ -- $ -- Real estate-construction Residential -- -- -- -- Commercial   --   --   --   -- Total real estate-construction: $ -- $ -- $ -- $ -- Consumer   22   --   --   -- Total loans 90+ days past due and still accruing $ 254 $ 56 $ -- $ --   Total non-performing assets and past due loans $ 45,001 $ 59,526 $ 50,231 $ 59,539   Troubled debt restructurings $ 33,926 $ 42,426 $ 43,448 $ 44,892   Non-performing assets to total loans: 2.04% 2.77% 2.29% 2.77% to total assets: 1.55% 2.01% 1.78% 1.98% Non-performing assets and past due loans to total loans: 2.05% 2.77% 2.29% 2.77% to total assets: 1.56% 2.01% 1.78% 1.98% Allowance for loan losses to total loans 1.91% 2.11% 1.95% 1.92% Allowance for loan losses to non-performing loans 118.43% 97.37% 112.77% 90.84%   Total allowance for loan losses $ 41,970 $ 45,371 $ 42,773 $ 41,288         (Dollars in thousands) As of March 31, As of 2013   2012 12/31/12   09/30/12     Loans 30 to 89 days past due and still accruing Commercial $ 6,918 $ 1,916 $ 366 $ 313 Real estate-one-to-four family residential: Permanent first and second 4,416 4,273 2,089 230 Home equity loans and lines   34   456   223   395 Total real estate-one-to-four family residential $ 4,450 $ 4,729 $ 2,312 $ 625 Real estate-multi-family residential -- -- -- -- Real estate-non-farm, non-residential: Owner-occupied 1,914 278 1,688 7,326 Non-owner-occupied   550   1,487   1,661   4,080 Total real estate-non-farm, non-residential $ 2,464 $ 1,765 $ 3,349 $ 11,406 Real estate-construction: Residential -- -- -- 74 Commercial   2,138   --   --   930 Total real estate-construction: $ 2,138 $ -- $ -- $ 1,004 Consumer 96 99 39 12 Farmland   --   --   --   -- Total loans 30 to 89 days past due $ 16,066 $ 8,509 $ 6,066 $ 13,360   For twelve For nine For the three months months months ended March 31, ended   ended 2013   2012 12/31/12   09/30/12   Net charge-offs Commercial $ 455 $ 4,667 $ 4,869 $ 4,975 Real estate-one-to-four family residential: Permanent first and second $ (51) $ (127) $ 1,480 $ 1,291 Home equity loans and lines   (26)   338   1,945   1,851 Total real estate-one-to-four family residential $ (77) $ 211 $ 3,425 $ 3,142 Real estate-multi-family residential -- -- ($118) ($118) Real estate-non-farm, non-residential: Owner-occupied $ 110 $ 47 $ 2,820 $ 2,820 Non-owner-occupied   (10)   632   2,486   3,525 Total real estate-non-farm, non-residential $ 100 $ 679 $ 5,306 $ 6,345 Real estate-construction: Residential $ 726 3,486 $ 6,489 $ 4,528 Commercial   1,448   100   559   578 Total real estate-construction $ 2,174 $ 3,586 $ 7,048 $ 5,106 Consumer (2) 209 251 258 Farmland   --   --   --   -- Total net charge-offs $ 2,650 $ 9,352 $ 20,781 $ 19,708 Net charge-offs to average loans outstanding 0.12% 0.43% 0.95% 0.91%   Total provision for loan losses $ 1,847 $ 5,994 $ 14,826 $ 12,267  

Classes of total loans by risk rating as of March 31, 2013, are summarized as follows (dollars in thousands):

            Special Total Internal Risk Rating Grades   Pass   Watch   Mention   Substandard   Doubtful   Loans   Commercial $ 179,904 $ 35,203 $ 10,099 $ 28,429 $ 1,817 $ 255,452 Real estate-one-to-four family residential: Permanent first and second 237,871 15,057 13,539 17,331 112 283,910 Home equity loans and lines   103,277   2,711   1,874   4,048   1,538   113,448 Total real estate-one-to-four family residential $ 341,148 $ 17,768 $ 15,413 $ 21,379 $ 1,650 $ 397,358 Real estate-multi-family residential 74,742 5,053 -- -- -- 79,795 Real estate-non-farm, non-residential: Owner-occupied 386,845 47,226 35,505 19,995 -- 489,571 Non-owner-occupied   484,330   112,387   27,724   43,014   --   667,455 Total real estate-non-farm, non-residential $ 871,175 $ 159,613 $ 63,229 $ 63,009 $ -- $ 1,157,026 Real estate-construction: Residential 116,566 16,847 19,677 10,568 -- 163,658 Commercial   45,236   18,409   32,163   33,268   --   129,076 Total real estate-construction $ 161,802 $ 35,256 $ 51,840 $ 43,836 $ -- $ 292,734 Consumer 9,861 201 155 187 -- 10,404 Farmland     2,208     3,887     --     --     --     6,095 Total   $ 1,640,840   $ 256,981   $ 140,736   $ 156,840   $ 3,467   $ 2,198,864  

Classes of total loans by risk rating as of March 31, 2012, are summarized as follows (dollars in thousands):

            Special Total Internal Risk Rating Grades   Pass   Watch   Mention   Substandard   Doubtful   Loans   Commercial $ 175,523 $ 34,782 $ 4,997 $ 23,427 $ 9,108 $ 247,837 Real estate-one-to-four family residential: Permanent first and second 205,804 15,342 10,163 25,154 115 256,578 Home equity loans and lines   111,181   3,288   1,902   8,420   2,243   127,034 Total real estate-one-to-four family residential $ 316,985 $ 18,630 $ 12,065 $ 33,574 $ 2,358 $ 383,612 Real estate-multi-family residential 76,304 4,253 -- 476 -- 81,033 Real estate-non-farm, non-residential: Owner-occupied 369,014 63,240 25,360 16,267 -- 473,881 Non-owner-occupied   505,373   119,446   37,154   29,872   --   691,845 Total real estate-non-farm, non-residential $ 874,387 $ 182,686 $ 62,514 $ 46,139 $ -- $ 1,165,726 Real estate-construction: Residential 65,280 22,329 20,100 29,048 -- 136,757 Commercial   39,092   20,483   36,037   26,055   --   121,667 Total real estate-construction $ 104,372 $ 42,812 $ 56,137 $ 55,103 $ -- $ 258,424 Consumer 8,259 291 167 67 -- 8,784 Farmland     2,574     --     --     --     --     2,574 Total   $ 1,558,404   $ 283,454   $ 135,880   $ 158,786   $ 11,466   $ 2,147,990  

Classes of total loans by risk rating as of December 31, 2012, are summarized as follows (dollars in thousands):

            Special Total Internal Risk Rating Grades   Pass   Watch   Mention   Substandard   Doubtful   Loans   Commercial $ 202,088 $ 25,048 $ 11,976 $ 19,822 $ 2,073 $ 261,007 Real estate-one-to-four family residential: Permanent first and second 235,672 15,585 12,233 19,038 112 282,640 Home equity loans and lines   106,872   2,724   1,871   4,165   1,543   117,175 Total real estate-one-to-four family residential $ 342,544 $ 18,309 $ 14,104 $ 23,203 $ 1,655 $ 399,815 Real estate-multi-family residential 73,317 5,080 -- -- -- 78,397 Real estate-non-farm, non-residential: Owner-occupied 384,923 46,123 35,675 19,757 -- 486,478 Non-owner-occupied   488,415   108,868   30,094   41,378   --   668,755 Total real estate-non-farm, non-residential $ 873,338 $ 154,991 $ 65,769 $ 61,135 $ -- $ 1,155,233 Real estate-construction: Residential 104,835 17,651 20,720 26,771 -- 169,977 Commercial   41,336   18,645   26,281   25,800   --   112,062 Total real estate-construction $ 146,171 $ 36,296 $ 47,001 $ 52,571 $ -- $ 282,039 Consumer 7,744 208 219 95 -- 8,266 Farmland     1,000     3,888     --     --     --     4,888 Total   $ 1,646,202   $ 243,820   $ 139,069   $ 156,826   $ 3,728   $ 2,189,645  

Classes of total loans by risk rating as of September 30, 2012, are summarized as follows (dollars in thousands):

            Special Total Internal Risk Rating Grades   Pass   Watch   Mention   Substandard   Doubtful   Loans   Commercial $ 163,539 $ 28,262 $ 14,710 $ 21,630 $ 1,810 $ 229,951 Real estate-one-to-four family residential: Permanent first and second 231,543 14,590 11,252 22,651 114 280,150 Home equity loans and lines   108,153   2,737   1,968   4,243   1,545   118,646 Total real estate-one-to-four family residential $ 339,696 $ 17,327 $ 13,220 $ 26,894 $ 1,659 $ 398,796 Real estate-multi-family residential 81,738 5,104 -- -- -- 86,842 Real estate-non-farm, non-residential: Owner-occupied 357,423 66,865 21,376 21,591 -- 467,255 Non-owner-occupied   483,742   131,036   33,608   43,076   --   691,462 Total real estate-non-farm, non-residential $ 841,165 $ 197,901 $ 54,984 $ 64,667 $ -- $ 1,158,717 Real estate-construction: Residential 81,656 18,262 18,095 37,757 -- 155,770 Commercial   33,365   15,277   28,560   27,935   --   105,137 Total real estate-construction $ 115,021 $ 33,539 $ 46,655 $ 65,692 $ -- $ 260,907 Consumer 6,585 230 222 104 -- 7,141 Farmland     1,000     3,889     --     --     --     4,889 Total   $ 1,548,744   $ 286,252   $ 129,791   $ 178,987   $ 3,469   $ 2,147,243  

Classes of total loans by risk rating as of June 30, 2012, are summarized as follows (dollars in thousands):

            Special Total Internal Risk Rating Grades   Pass   Watch   Mention   Substandard   Doubtful   Loans   Commercial $ 188,952 $ 29,560 $ 11,729 $ 24,563 $ 1,810 $ 256,614 Real estate-one-to-four family residential: Permanent first and second 228,273 14,069 10,285 25,141 114 277,882 Home equity loans and lines   110,765   2,851   2,119   5,978   2,240   123,953 Total real estate-one-to-four family residential $ 339,038 $ 16,920 $ 12,404 $ 31,119 $ 2,354 $ 401,835 Real estate-multi-family residential 80,717 3,460 -- -- -- 84,177 Real estate-non-farm, non-residential: Owner-occupied 367,535 62,369 25,067 16,490 -- 471,461 Non-owner-occupied   510,605   102,602   26,174   44,792   --   684,173 Total real estate-non-farm, non-residential $ 878,140 $ 164,971 $ 51,241 $ 61,282 $ -- $ 1,155,634 Real estate-construction: Residential 75,605 22,476 19,807 29,176 -- 147,064 Commercial   40,181   18,090   26,702   38,903   --   123,876 Total real estate-construction $ 115,786 $ 40,566 $ 46,509 $ 68,079 $ -- $ 270,940 Consumer 8,093 307 165 73 -- 8,638 Farmland     3,415     158     --     --     --     3,573 Total   $ 1,614,141   $ 255,942   $ 122,048   $ 185,116   $ 4,164   $ 2,181,411           Troubled Debt Restructurings (TDRs) -

By Loan Type

As of March 31, 2013 Reviewable TDRs Permanent TDRs Total TDRs (Dollars in thousands) # of     As % of # of     As % of # of     As % of Loans   Balance   Balance Loans   Balance   Balance Loans   Balance   Balance Loan Type: Commercial -- -- 0.0% 3 $7,071 29.8% 3 $7,071 20.8% Real estate-one-to-four family residential: Permanent first and second 7 $2,607 25.6% -- -- 0.0% 7 $2,607 7.7% Home equity loans and lines -- -- 0.0% -- -- 0.0% -- -- 0.0% Total real estate-one-to-four family residential 7 $2,607 25.6% -- -- 0.0% 7 $2,607 7.7% Real estate-multi-family residential -- -- 0.0% -- -- 0.0% -- -- 0.0% Real estate-non-farm, non-residential: Owner-occupied 2 6,771 66.6% 1 2,753 11.6% 3 9,524 28.1% Non-owner-occupied 1 793 7.8% 2 6,968 29.3% 4 7,761 22.9% Total real estate-non-farm, non-residential 3 $7,564 74.4% 3 $9,721 40.9% 7 $17,285 51.0% Real estate-construction: Residential-owner-occupied -- -- 0.0% 1 72 0.3% 1 72 0.2% Residential-builder -- -- 0.0% 3 6,891 29.0% 3 6,891 20.3% Commercial -- -- 0.0% 4 $6,963 29.3% 4 $6,963 20.5% Total real estate-construction -- -- 0.0% -- -- 0.0% -- -- 0.0% Consumer -- -- 0.0% -- -- 0.0% -- -- 0.0% Farmland -- -- 0.0% -- -- 0.0% -- -- 0.0% Total 10 $10,171 100.0% 10 $23,755 100.0% 20 $33,926 100.0% Troubled Debt Restructurings (TDRs) -

By Quarterly Review / Maturity Date

          As of March 31, 2013 Reviewable TDRs Permanent TDRs Total TDRs (Dollars in thousands) # of     As % of # of     As % of # of     As % of Loans   Balance   Balance Loans   Balance   Balance Loans   Balance   Balance Review / Maturity by Quarter: 2013 1st Quarter -- $ -- 0.0% 1 $ 465 2.0% 1 $ 465 1.4% 2nd Quarter 2 669 6.6% 2 3,646 15.3% 4 4,315 12.7% 3rd Quarter 4 1,274 12.5% -- -- 0.0% 4 1,274 3.8% 4th Quarter 1   793 7.8% 1   72 0.3% 2   865 2.5% Total 2013: 7 $ 2,736 26.9% 4 $ 4,183 17.6% 11 $ 6,919 20.4% 2014 1st Quarter -- $ -- 0.0% -- $ -- 0.0% -- $ -- 0.0% 2nd Quarter -- -- 0.0% 1 1,026 4.3% 1 1,026 3.0% 3rd Quarter 2 6,771 66.6% 1 5,579 23.5% 3 12,350 36.4% 4th Quarter --   -- 0.0% 1   5,400 22.7% 1   5,400 15.9% Total 2014: 2 $ 6,771 66.6% 3 $ 12,005 50.5% 5 $ 18,776 55.3% 2015 & beyond 1   664 6.5% 3   7,567 31.9% 4   8,231 24.3% Total Loans 10 $ 10,171 100.0% 10 $ 23,755 100.0% 20 $ 33,926 100.0%                   Troubled Debt Restructurings (TDRs) - Migration by Quarter As of March 31, 2013 (000s)   4/1/09 to 7/1/09 to 10/1/09 to 1/1/10 to 4/1/10 to 7/1/10 to 10/1/10 to 1/1/11 to 4/1/11 to 6/30/09 9/30/09 12/31/09 3/31/10 6/30/10 9/30/10 12/31/10 3/31/11 6/30/11 Period Beginning Balance -- $ 33,309 $ 37,425 $ 71,885 $ 80,993 $ 96,976 $ 105,617 $ 102,996 $ 91,876   Additions: New Loans Added $ 33,309 $ 5,226 $ 37,663 $ 23,477 $ 21,720 $ 12,698 $ 12,377 $ 3,188 $ 116 Loan Advances   --   974   348   219   472   220   531   486   197 Subtotal Additions: $ 33,309 $ 6,200 $ 38,011 $ 23,696 $ 22,192 $ 12,918 $ 12,908 $ 3,674 $ 313   Deductions: Sales Proceeds -- $ 944 $ 1,783 $ 1,218 $ 761 -- $ 125 $ 367 $ 126 Payments -- 317 174 50 1,202 1,138 433 1,989 1,715 Reviews -- -- 229 75 3,714 2,468 -- 5,731 640 Upgrades -- -- -- -- -- -- 11,000 -- -- Partial C/Os w/Continuing TDRs -- -- -- -- -- -- -- 5,656 3,000 Charge-offs w/Loans Sold or Settled -- -- 56 -- -- -- -- 251 -- Transfer to NPA   --   823   1,309   13,245   532   671   3,971   800   5,638 Subtotal Deductions: -- $ 2,084 $ 3,551 $ 14,588 $ 6,209 $ 4,277 $ 15,529 $ 14,794 $ 11,119   Net Increase / (Decrease) $ 33,309 $ 4,116 $ 34,460 $ 9,108 $ 15,983 $ 8,641 ($ 2,621) ($ 11,120) ($10,806)   % Increase / (Decrease) from Preceding Period 12.4% 92.1% 12.7% 19.7% 8.9% (2.5%) (10.8%) (11.8%)   Period Ended Balance $ 33,309 $ 37,425 $ 71,885 $ 80,993 $ 96,976 $ 105,617 $ 102,996 $ 91,876 $ 81,070     7/1/11 to 10/1/11 to 1/1/12 to 4/1/12 to 7/1/12 to 10/1/12 to 1/1/13 to 9/30/11 12/31/11 3/31/12 6/30/12 9/30/12 12/31/12 3/31/13 TOTAL Period Beginning Balance $ 81,070 $ 71,686 $ 52,264 $ 42,426 $ 43,054 $ 44,892 $ 43,448   Additions: New Loans Added $ 984 $ 753 $ 541 $ 1,345 $ 8,804 $ 6,771 $ 231 $ 169,203 Loan Advances   53   40   236   186   46   65   --   4,073 Subtotal Additions: $ 1,037 $ 793 $ 777 $ 1,531 $ 8,850 $ 6,836 $ 231 $ 173,276   Deductions: Sales Proceeds $ 4,597 $ 6,168 $ 5,098 $ 247 $ 531 $ 3,904 $ -- $ 25,869 Payments 532 990 226 158 785 72 64 9,845 Reviews 4,292 10,111 3,888 498 1,465 635 9,689 43,435 Upgrades -- -- -- -- -- 3392 -- 14,392 Partial C/Os w/Continuing TDRs -- -- -- -- 2,587 -- -- 11,243 Charge-offs w/Loans Sold or Settled -- 2,946 604 -- -- -- -- 3,857 Transfer to NPA   1,000   --   799   --   1,644   277   --   30,709 Subtotal Deductions: $ 10,421 $ 20,215 $ 10,615 $ 903 $ 7,012 $ 8,280 $ 9,753 $ 139,350   Net Increase / (Decrease) ($9,384) ($19,422) ($9,838) $ 628 $ 1,838 ($1,444) ($9,522)   % Increase / (Decrease) from Preceding Period (11.6%) (27.1%) (18.8%) 1.5% 4.3% (3.20%) (21.9%)   Period Ended Balance $ 71,686 $ 52,264 $ 42,426 $ 43,054 $ 44,892 $ 43,448 $ 33,926 $ 33,926         (Dollars in thousands) As of March 31,     As of     2013   2012   % Change 12/31/12   % Change   Loan Portfolio: Commercial $ 255,452 $ 247,837 3.1% $ 261,007 -2.1% Real estate-one to four family residential: Permanent first and second 283,910 256,578 10.7% 282,640 0.4% Home equity loans and lines   113,448   127,034 -10.7%   117,175 -3.2% Total real estate-one-to-four family residential $ 397,358 $ 383,612 3.6% $ 399,815 -0.6% Real estate-multifamily residential 79,795 81,033 -1.5% 78,397 1.8% Real estate-non-farm, non-residential: Owner-occupied 489,571 473,881 3.3% 486,478 0.6% Non-owner-occupied   667,455   691,845 -3.5%   668,755 -0.2% Total real estate-non-farm, non-residential $ 1,157,026 $ 1,165,726 -0.7% $ 1,155,233 0.2% Real estate-construction: Residential 163,658 136,757 19.7% 169,977 -3.7% Commercial   129,076   121,667 6.1%   112,062 15.2% Total real estate-construction: $ 292,734 $ 258,424 13.3% 282,039 3.8% Consumer 10,404 8,784 18.4% 8,266 25.9% Farmland   6,095   2,574 136.8%   4,888 24.7% Total loans $ 2,198,864 $ 2,147,990 2.4% $ 2,189,645 0.4% Less unearned income 4,078 3,135 30.1% 4,000 2.0% Less allowance for loan losses   41,970   45,371 -7.5%   42,773 -1.9% Loans, net $ 2,152,816 $ 2,099,484 2.5% $ 2,142,872 0.5%     (Dollars in thousands) As of March 31, 2013 Residential, Acquisition, Development and Construction         Non-accruals   Net charge-offs Total Percentage Non-accrual as a % of as a % of By County/Jurisdiction of Origination: Outstandings   of Total Loans   Outstandings   Outstandings District of Columbia $ 7,273 4.4% $ 489 0.3% -- Montgomery, MD -- -- -- -- -- Prince Georges, MD 8,153 5.0% 3,681 2.3% -- Other Counties in MD 4,920 3.0% 62 -- -- Arlington/Alexandria, VA 30,554 18.7% 616 0.4% 0.4% Fairfax, VA 36,103 22.1% -- -- -- Culpeper/Fauquier, VA 10,550 6.4% 200 0.1% -- Frederick, VA 2,288 1.4% 2,288 1.4% -- Henrico, VA 955 0.6% -- -- -- Loudoun, VA 15,674 9.6% 279 0.2% -- Prince William, VA 22,786 13.9% -- -- -- Spotsylvania, VA 342 0.2% -- -- -- Stafford, VA 20,287 12.4% -- -- -- Other Counties in VA 1,648 1.0% -- -- -- Outside VA, D.C. & MD   2,125 1.3%   -- -- -- $ 163,658 100.0% $ 7,615 4.7% 0.4%     (Dollars in thousands) As of March 31, 2013 Commercial, Acquisition, Development and Construction         Non-accruals   Net charge-offs Total Percentage Non-accrual as a % of as a % of By County/Jurisdiction of Origination: Outstandings   of Total Loans   Outstandings   Outstandings District of Columbia $ 272 0.2% $ -- -- -- Montgomery, MD 1,974 1.5% -- -- -- Prince Georges, MD 6,357 4.9% -- -- -- Other Counties in MD 2,080 1.6% -- -- -- Arlington/Alexandria, VA 14,415 11.2% 506 0.4% -- Fairfax, VA 8,031 6.2% 2,142 1.7% 0.2% Culpeper/Fauquier, VA 1,688 1.3% 1,688 1.3% 0.4% Frederick, VA 2,000 1.5% -- -- -- Henrico, VA -- -- -- -- -- Loudoun, VA 13,840 10.7% -- -- -- Prince William, VA 45,990 35.7% -- -- -- Spotsylvania, VA 1,640 1.3% -- -- -- Stafford, VA 25,412 19.7% 8,014 6.2% 0.6% Other Counties in VA 5,377 4.2% 835 0.6% -- Outside VA, D.C. & MD   -- --   -- -- -- $ 129,076 100.0% $ 13,185 10.2% 1.2%     (Dollars in thousands) As of March 31, 2013 Non-Farm/Non-Residential         Non-accruals   Net charge-offs as Total Percentage Non-accrual as a % of a % of By County/Jurisdiction of Origination: Outstandings   of Total Loans   Outstandings   Outstandings District of Columbia $ 82,287 7.1% $ -- -- -- Montgomery, MD 18,729 1.6% 1,738 0.1% -- Prince Georges, MD 72,084 6.2% -- -- -- Other Counties in MD 47,781 4.1% -- -- -- Arlington/Alexandria, VA 182,882 15.8% 909 0.1% -- Fairfax, VA 277,162 24.0% 719 0.1% -- Culpeper/Fauquier, VA 5,197 0.4% 2,061 0.2% -- Frederick, VA 7,646 0.7% -- -- -- Henrico, VA 21,562 1.9% -- -- -- Loudoun, VA 146,847 12.7% 1,164 0.1% -- Prince William, VA 181,661 15.7% -- 0.1% -- Spotsylvania, VA 18,927 1.6% -- -- -- Stafford, VA 19,328 1.7% -- -- -- Other Counties in VA 66,001 5.7% -- -- -- Outside VA, D.C. & MD   8,932 0.8%   -- -- -- $ 1,157,026 100.0% $ 6,591 0.7% --  

Of this total of $1.2 billion in non-farm/non-residential real estate loans, approximately $87.5 million will mature in 2012, $109.0 million in 2013 and $201.9 million in 2014.

        As of March 31,     As of     (Dollars in thousands) 2013   2012   % Change 12/31/12   % Change   Investment Securities (at book value): Available-for-sale (AFS): U.S. government agency obligations $393,959 $494,041 -20.3% $392,867 0.3% Pooled trust preferred securities 364 486 -25.1% 357 2.0% Obligations of states and political subdivisions 100,763 103,651 -2.8% 100,200 0.6% Total Investment Securities $495,086 $598,178 -17.2% $493,424 0.3%     Virginia Commerce Bancorp, Inc. Consolidated Balance Sheets (Dollars in thousands, except per share data) (Unaudited)   As of As of March 31, December 31, 2013   2012 2012 Assets   Cash and due from banks $ 32,662 $ 33,047 $ 49,531 Investment securities, AFS 495,086 598,178 493,424 Restricted stocks, at cost 10,253 11,272 10,147 Federal funds sold -- -- 0 Interest bearing deposits in other banks 80,000 116,000 1,000 Loans held-for-sale 4,941 8,164 15,195 Loans, net of allowance for loan losses of $41,970, $45,371 and $42,773 2,152,816 2,099,484 2,142,872 Bank premises and equipment, net 9,668 11,058 10,072 Accrued interest receivable 9,075 9,798 8,563 Other real estate owned, net of valuation allowance of $4,076, $6,571 and $6,374 9,562 12,928 12,302 Bank owned life insurance 44,694 14,072 44,393 Other assets   34,631   40,225   36,193 Total assets $ 2,883,388 $ 2,954,226 $ 2,823,692 Liabilities and Stockholders’ Equity Deposits Demand deposits $ 420,579 $ 335,580 $ 416,091 Savings and interest-bearing demand deposits 1,163,374 1,173,176 1,200,397 Time deposits   602,979   729,092   628,904 Total deposits $ 2,186,932 $ 2,237,848 $ 2,245,392 Securities sold under agreement to repurchase 342,409 315,633 250,718 Other borrowed funds 25,000 25,000 7,000 Trust preferred capital notes 66,891 66,634 66,827 Accrued interest payable 2,527 2,423 1,885 Other liabilities   5,826   10,051   6,561 Total liabilities $ 2,629,585 $ 2,657,589 $ 2,578,383 Stockholders’ Equity Preferred stock, net of discount, $1.00 par value per share, 1,000,000 shares authorized, Series A; $1,000 stated value; 71,000 issued and outstanding $ -- $ 67,670 $ - Common stock, $1.00 par value per share, 50,000,000 shares authorized, issued and outstanding March 2013, 32,506,750 including 196,513 in unvested restricted stock issued; March 2012, 31,809,053 including 118,946 in unvested restricted stock issued; December 2012, 31,920,756 including 110,215 in unvested restricted stock issued 32,310 31,690 31,811 Surplus 121,370 117,563 118,508 Warrants 8,520 8,520 8,520 Retained earnings 89,523 65,779 83,487 Accumulated other comprehensive income, net   2,080   5,415   2,983 Total stockholders’ equity $ 253,803 $ 296,637 $ 245,309 Total liabilities and stockholders’ equity $ 2,883,388 $ 2,954,226 $ 2,823,692     Virginia Commerce Bancorp, Inc. Consolidated Statements of Operations (Dollars in thousands except per share data) (Unaudited)   Three Months Three Months Ended Ended March 31, December 31, 2013   2012 2012 Interest and dividend income:   Interest and fees on loans $ 28,515 $ 30,621 $ 29,429 Interest and dividends on investment securities: Taxable 1,968 2,644 2,210 Tax-exempt 567 588 563 Dividends on restricted stocks 113 101 118 Interest on deposits in other banks   39     51   107 Total interest and dividend income $ 31,202   $ 34,005 $ 32,427 Interest expense: Deposits $ 3,523 $ 4,942 $ 3,880

Securities sold under agreement to repurchase and federal funds purchased

915 1,037 973 Other borrowed funds 16 269 -- Trust preferred capital notes   954     978   971 Total interest expense $ 5,408   $ 7,226 $ 5,824 Net interest income $ 25,794 $ 26,779 $ 26,603 Provision for loan losses   1,847     5,994   2,559 Net interest income after provision for loan losses $ 23,947   $ 20,785 $ 24,044 Non-interest income: Service charges and other fees $ 930 $ 881 $ 919 Non-deposit investment services commissions 282 252 181 Fees and net gains on loans held-for-sale 1,022 1,001 1,572 Gain on sale of investment securities -- 2,592 1,454 Bank owned life insurance 301 55 217 Other   23     168   32 Total non-interest income $ 2,558   $ 4,949 $ 4,375 Non-interest expense: Salaries and employee benefits $ 8,178 $ 7,785 $ 7,407 Occupancy expense 2,421 2,421 2,358 FDIC insurance premiums 517 995 617 Loss on other real estate owned 1,248 826 1,615 Other real estate owned expenses 208 318 92 Franchise tax expense 748 750 936 Data processing expense 725 653 770 Merger-related expenses 584 -- -- Other operating expense   3,018     2,879   3,048 Total non-interest expense $ 17,647   $ 16,627 $ 16,843 Income before taxes $ 8,858 $ 9,107 $ 11,576 Provision for income taxes   2,822     2,965   3,824 Net income $ 6,036   $ 6,142 $ 7,752 Effective dividend on preferred stock   --   $ 1,363 $ 3,522 Net income available to common stockholders $ 6,036 $ 4,779 $ 4,230 Earnings per common share, basic $ 0.19 $ 0.15 $ 0.13 Earnings per common share, diluted $ 0.17 $ 0.14 $ 0.12               Virginia Commerce Bancorp, Inc. Consolidated Average Balances, Yields, and Rates Three Months Ended March 31, (Unaudited)                     2013 2012 Interest Average Interest Average Average Income- Yields Average Income- Yields (Dollars in thousands) Balance   Expense   /Rates Balance   Expense   /Rates Assets Securities (1) $493,647 $2,535 2.29% $604,991 $3,232 2.31% Restricted stock 11,058 113 4.15% 11,272 101 3.61% Loans, net of unearned income (2) 2,194,541 28,515 5.28% 2,175,016 30,621 5.67% Interest-bearing deposits in other banks 54,257   39   0.29% 76,384   51   0.27% Total interest-earning assets $2,753,503 $31,202 4.65% $2,867,663 $34,005 4.82% Other assets 108,862 69,052 Total Assets $2,862,365 $2,936,715   Liabilities and Stockholders’ Equity Interest-bearing deposits: NOW accounts $441,569 $331 0.30% $326,990 $298 0.37% Money market accounts 219,817 161 0.30% 215,936 235 0.44% Savings accounts 506,023 381 0.31% 628,298 772 0.49% Time deposits 612,788   2,650   1.75% 760,745   3,637   1.92% Total interest-bearing deposits $1,780,197 $3,523 0.80% $1,931,969 $4,942 1.03% Securities sold under agreement to repurchase and federal funds purchased 284,174 915 1.31% 279,803 1,037 1.49% Other borrowed funds 29,544 16 0.22% 25,000 269 4.25% Trust preferred capital notes 66,856   954   5.71% 66,602   978   5.81% Total interest-bearing liabilities $2,160,771 $5,408 1.01% $2,303,374 $7,226 1.26% Demand deposits and other liabilities 451,783 341,380 Total liabilities $2,612,554 $2,644,754 Stockholders’ equity 249,811 291,961 Total liabilities and stockholders’ equity $2,862,365 $2,936,715 Interest rate spread 3.64% 3.56% Net interest income and margin $25,794 3.85% $26,779 3.81%   (1) Yields on securities available-for-sale have been calculated on the basis of historical cost and do not give effect to changes in the fair value of those securities, which are reflected as a component of stockholders’ equity. Average yields on securities are stated on a tax equivalent basis, using a 35% rate. (2) Loans placed on non-accrual status are included in the average balances. Net loan fees and late charges included in interest income on loans totaled $1.3 million and $1.2 million for the three months ended March 31, 2013 and 2012, respectively. (3) The securities sold under agreement to repurchase related to customers had an average balance of $209.2 million at an average rate of 0.16% for the three months ended March 31, 2013, and $204.8 million at an average rate of 0.38% for the same period 2012. Also, included are wholesale agreements with an average balance of $75.0 million at an average rate of 4.51% for the three months ended March 31, 2013, and $75.0 million at an average rate of 4.51% for the same period for 2012.