Village Bank’s headquarters building on Midlothian Turnpike is for sale. (Courtesy of CBRE)
A local bank has fought its way back to the black.
Village Bank’s $853,000 fourth-quarter profit marks its first profitable quarter since 2011 and a big improvement from the $7 million loss it reported in the same period in 2011.
And although it still lost $11 million for 2012, the Midlothian-based bank reported that it’s getting some of its bad loans and foreclosed real estate under control.
“Over the last three years, we’ve been putting reserves up against [nonperforming assets], and that primarily has driven our negative earnings,” said Village Bank chief executive Tom Winfree. “It’s a process of getting control of the assets, through foreclosure namely, and then we can dispose of them.”
The bank’s $45 million in nonperforming assets, which consist of soured loans and foreclosed real estate, account for 8.98 percent of its total assets.
But that dollar figure is down 25 percent from $61 million at the end of the third quarter of 2012, and the ratio of its nonperforming assets to its total assets has declined for two consecutive quarters since peaking at 14 percent in June, one of the highest rates among its Richmond peers.
The positive results were driven largely by the bank selling off foreclosed real estate – largely residential property – and thus needing to set aside less money in reserves against problem assets.
Winfree said it’s still not a great economy, but he sees some bright spots.
“The thing I’m seeing or that I sense is that we’re not deteriorating anymore,” Winfree said. “I believe we’re gradually ticking upward. But it’s a slow process.”
Meanwhile, Village is trying to sell its massive headquarters building on Midlothian Turnpike.
The six-acre, 80,000-square-foot property on Midlothian Turnpike, just off 288, is listed with CB Richard Ellis for $16.3 million. The bank occupies about 40 percent of the four-story building. It would lease back its space once the property is sold.
Village is also working a deal to sell one of its branches to StellarOne, a Charlottesville bank that has been expanding quickly into Richmond in recent months.
In a deal announced last month, StellarOne will acquire a Village Bank branch at 11450 Robious Road. Village has another branch barely two miles up the road at Chesterfield Towne Center.
“StellarOne came along and wanted it, and it made some sense for us,” Winfree said. “It helps reduce overhead, and we get a little premium on the sale.”
Village and its parent company remain under written agreements with their federal regulators. Those agreements are intended to force it to craft and adhere to a plan to get back on the right track. The agreements also prevent the bank from paying dividends on its stock, including dividends owed on the $14.7 million in TARP capital it took from the U.S. Treasury in May 2009.
TARP dividends can be deferred and continue to accrue. Village Bank’s fourth-quarter profit before accounting for those deferred TARP dividends was $1.1 million.
Village Bank’s headquarters building on Midlothian Turnpike is for sale. (Courtesy of CBRE)
A local bank has fought its way back to the black.
Village Bank’s $853,000 fourth-quarter profit marks its first profitable quarter since 2011 and a big improvement from the $7 million loss it reported in the same period in 2011.
And although it still lost $11 million for 2012, the Midlothian-based bank reported that it’s getting some of its bad loans and foreclosed real estate under control.
“Over the last three years, we’ve been putting reserves up against [nonperforming assets], and that primarily has driven our negative earnings,” said Village Bank chief executive Tom Winfree. “It’s a process of getting control of the assets, through foreclosure namely, and then we can dispose of them.”
The bank’s $45 million in nonperforming assets, which consist of soured loans and foreclosed real estate, account for 8.98 percent of its total assets.
But that dollar figure is down 25 percent from $61 million at the end of the third quarter of 2012, and the ratio of its nonperforming assets to its total assets has declined for two consecutive quarters since peaking at 14 percent in June, one of the highest rates among its Richmond peers.
The positive results were driven largely by the bank selling off foreclosed real estate – largely residential property – and thus needing to set aside less money in reserves against problem assets.
Winfree said it’s still not a great economy, but he sees some bright spots.
“The thing I’m seeing or that I sense is that we’re not deteriorating anymore,” Winfree said. “I believe we’re gradually ticking upward. But it’s a slow process.”
Meanwhile, Village is trying to sell its massive headquarters building on Midlothian Turnpike.
The six-acre, 80,000-square-foot property on Midlothian Turnpike, just off 288, is listed with CB Richard Ellis for $16.3 million. The bank occupies about 40 percent of the four-story building. It would lease back its space once the property is sold.
Village is also working a deal to sell one of its branches to StellarOne, a Charlottesville bank that has been expanding quickly into Richmond in recent months.
In a deal announced last month, StellarOne will acquire a Village Bank branch at 11450 Robious Road. Village has another branch barely two miles up the road at Chesterfield Towne Center.
“StellarOne came along and wanted it, and it made some sense for us,” Winfree said. “It helps reduce overhead, and we get a little premium on the sale.”
Village and its parent company remain under written agreements with their federal regulators. Those agreements are intended to force it to craft and adhere to a plan to get back on the right track. The agreements also prevent the bank from paying dividends on its stock, including dividends owed on the $14.7 million in TARP capital it took from the U.S. Treasury in May 2009.
TARP dividends can be deferred and continue to accrue. Village Bank’s fourth-quarter profit before accounting for those deferred TARP dividends was $1.1 million.
Great news indeed! The stock is nearing its 52-week high and closed at 2.57 on Friday. I see great things for Village in the future, I think it’s finally broken out of its “recession numbers.”
Congratulations to Tom and his staff of dedicated employees for “righting” the ship.
Keep up the good works!