Heritage Bankshares, Inc. Announces Preliminary Results for Third Quarter, 2005, Additional Branch Expansion, and Updates Timeta
02 Novembro 2005 - 4:31PM
PR Newswire (US)
NORFOLK, Va., Nov. 2 /PRNewswire-FirstCall/ -- Heritage Bankshares,
Inc. ("Heritage") (Pink Sheets: HBKS) announced today certain
unaudited, preliminary financial results for the third quarter of
2005. Net income, after tax, for the quarter ended September 30,
2005 was $170,000, or $0.10 per basic share. Net interest income
for the third quarter was $1.6 million. No additional provision for
loan loss was recorded for the quarter ended September 30, 2005.
Noninterest expense for the quarter was $1.7 million, which
included compensation expense of $731,000. Results for the third
quarter were affected by the following items: a pretax gain of
$118,000 on the sale of one former REO (Real Estate Owned)
property, offset by $79,000 of pretax legal expenses related to
various securities and general banking matters and pretax expense
of $72,000 largely related to contract accounting services. Net
income, after tax, for the nine months ended September 30, 2005 was
$1,009,000, or $0.59 per basic share. Net interest income for the
nine months ended September 30, 2005 was $5.0 million. Provision
for loan losses was $30,000 for the nine month period. Noninterest
expense for the nine months ended September 30, 2005 was $4.6
million, which included compensation expense of $2.1 million.
Pretax expenses of $209,000 related primarily to contract
accounting services, together with $195,000 in various legal
expenses, largely offset a $427,000 gain on the sale of REO during
the first nine months of 2005. At September 30, 2005 Heritage had
1,712,000 shares outstanding. In addition, Heritage announced that
total assets at September 30, 2005 grew to $205 million, an
increase of $51 million from $154 million in assets at December 31,
2004. Net loans held for investment at September 30, 2005 were
unchanged from $125 million at December 31, 2004. There was no REO
at September 30, 2005. Total deposits at September 30, 2005 were
$173 million, compared to total deposits of $133 million at
December 31, 2004, an increase of $40 million; furthermore,
noninterest bearing deposits have increased by $18 million in the
first nine months of 2005, from $26 million at December 31, 2004 to
$44 million at September 30, 2005. Total transaction deposits have
also increased in the first nine months of 2005, growing by $33
million in the period, from $67 million at December 31, 2004 to
$100 million at September 30, 2005. Michael S. Ives, President and
Chief Executive Officer of the Company, commented, "For the past
nine months, we have been working at a frenetic pace on four major
initiatives: our comprehensive technology improvement program; our
branch expansion program; our banking team development program; and
our accounting review." Ives continued, "We have made tremendous
strides in our banking technology during the past year. We have
networked all of our financial centers for the first time and have
automated many of our retail banking and loan origination
processes. We have recently installed a comprehensive small
business banking program that allows our customers to undertake a
wide variety of banking transactions in a secure environment while
they are sitting at their desks in their offices. This new program
makes Heritage competitive with the large regional banks that offer
similar services to their small business customers." Ives reported
further, "Heritage has also met with great success in our branch
expansion program. In October, Heritage opened its first financial
center in Virginia Beach at the Little Neck Towers. In addition,
Heritage has purchased a site for another financial center at 1756
Laskin Road in the Hilltop section of Virginia Beach. Heritage has
a third site under option on Lynnhaven Parkway, also in Virginia
Beach. Meanwhile, in Norfolk, Heritage has executed a lease to move
its Financial District Office into the Trader Publishing Building
on Trader Square upon its completion of construction. The Trader
Publishing Building will be the newest high-rise office building in
the Financial District, and we are pleased to have the opportunity
to have our offices in this prominent location at the intersection
of Granby Street and City Hall Avenue." Ives further reported,
"Throughout the year, we have been recruiting additional lending
and retail banking personnel capable of providing the highest level
of banking services to our small business customers. Heritage now
has managers at five of our financial centers with sales experience
with major regional banks. We have continued to strengthen our
lending and credit administration teams with the addition of three
more lending officers during October. Also, we have formed Advisory
Boards of Directors for Norfolk and Virginia Beach and have
implemented an Advisory Board Incentive Campaign using a successful
model developed by members of our team for another community bank."
Ives continued, "Progress of this type does not come without cost.
These initiatives have caused substantial increases in our overall
expenses. We view these increases in our expenses as essential to
growing Heritage more rapidly than previously and in a safe and
sound manner." Ives concluded, "Existing and prospective customers
are responding quite positively to our new initiatives. We have
grown our deposits by approximately $40 million, or 30%, since the
beginning of the year, even while replacing approximately $9.5
million of governmental deposits held by Heritage at December 31,
2004 with core deposits this year." As previously announced,
Heritage is in the process of restating its unaudited quarterly
financial statements for the quarters ended March 31, 2004, June
30, 2004 and September 30, 2004, as well as revising financial
information for the quarter and year ended December 31, 2004
included in Heritage's Form 8-K filed on January 31, 2005, for
reasons related to the treatment of outstanding stock options and
certain stock options exercised in 2004. As a result of its
discovery of the need to restate those financial statements and its
continuing review of financial statements for years prior to 2004,
Heritage has not yet filed its Annual Report on Form 10-KSB for the
year ended December 31, 2004 or its Form 10-QSB for the quarters
ended March 31 and June 30, 2005, and anticipates filing with the
Securities and Exchange Commission a Form 12b-25 reporting that it
will not be able to complete and file its Quarterly Report on Form
10-QSB for the current quarter within the prescribed time period.
Furthermore, due to the continuing review of its financial
statements and results for previous periods, the preliminary,
unaudited financial information contained in this release may be
adjusted. Also as previously reported, a significant issue in
Heritage's continuing review of its financial statements for prior
periods involves the application of SFAS 91, "Accounting for
Non-Refundable Fees and Costs Associated with Originating or
Acquiring Loans and Indirect Costs of Leases." Heritage has made
great progress with regard to its SFAS 91 analysis and has
completed its SFAS 91 review for the years 2000 and 2001. Heritage
anticipates that it will complete its SFAS 91 analysis for
subsequent years, and its review of miscellaneous tax provisions
for all applicable years, within two weeks. After the completion of
its review, Heritage will announce the results promptly and then
proceed to prepare and file the appropriate reports with the
Securities and Exchange Commission. Heritage is the parent company
of Heritage Bank (http://www.heritagenorfolk.com/). Heritage Bank
has four full-service branches in the City of Norfolk, one
full-service branch in the City of Virginia Beach, and one branch
in the City of Chesapeake. Heritage Bank provides a full range of
financial services including business, personal and mortgage loans,
insurance, and annuities. Forward Looking Statements The press
release contains statements that constitute "forward-looking
statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended. Forward-looking statements
address future events, developments or results and typically use
words such as believe, anticipate, expect, intend, plan, forecast,
outlook, or estimate. For example, our forward-looking statements
include statements regarding our expectations for technology
improvements, branch expansion, management development, expenses
and customer deposits as well as our on-going review of accounting
matters. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause Heritage's
actual results, performance, achievements, and business strategy to
differ materially from the anticipated results, performance,
achievements or business strategy expressed or implied by such
forward-looking statements. Factors that could cause such actual
results, performance, achievements and business strategy to differ
materially from anticipated results, performance, achievements and
business strategy include: general and local economic conditions,
competition, capital requirements of the planned expansion,
customer demand for Heritage's banking products and services, and
the risks and uncertainties described in Heritage's most recent
Form 10-KSB filed with the Securities and Exchange Commission.
Heritage disclaims any intention or obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise. DATASOURCE: Heritage
Bankshares, Inc. CONTACT: Michael S. Ives of Heritage Bankshares,
Inc., +1-757-523-2651 Web site: http://www.heritagenorfolk.com/
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