Friday, October 31, 2008
Valley Bank earnings grow in third quarter
The Roanoke-based company said that it was not encumbered by bad debt or stock.
The latest from The Ticker blog
Third-quarter earnings grew 18 percent at Valley Bank in Roanoke, the company reported Thursday.
The eight-branch bank made a profit of $717,000 during the July-September quarter compared with $610,000 during the same period a year ago. During the first nine months of the year, the bank earned nearly $2.2 million versus $2 million a year ago.
Ellis Gutshall, president and chief executive officer, said Valley Bank is less troubled by problem loans than other banks and continues to lend and receive deposits. Construction of a ninth branch is scheduled to begin before year's end in Bonsack.
"We continue to be concerned about the general slowdown in economic activity and the overall weakness in the residential real estate market. However, we are confident in our ability to navigate through the effects of the current economic and financial environment," Gutshall said in a statement.
Gutshall said the bank is not encumbered by bad subprime debt because it didn't make subprime and similar higher-risk loans that have caused many banks large losses.
Nor did the bank own stock in Fannie Mae or Freddie Mac, critical components of the mortgage financing industry that were taken over by the federal government in September on the verge of collapse.
Instead, a measurement of loan difficulties -- nonperforming assets as a percentage of all assets -- fell to 0.34 percent by the end of September from 1.38 percent a year ago. Nonperforming assets totaled nearly $2.2 million, about one-fourth what they were a year ago.
The bank has lent $514.3 million, up $26.5 million from a year ago. Deposits stood at $461.9 million Sept. 30, up nearly $28 million from a year ago.
"While our competitors may be pulling back on issuing credit, we at Valley Bank continue to experience strong loan demand and strong core deposit growth," Gutshall said.
Shares in the bank's holding company, Valley Financial, closed Thursday at $7.25.
