FOR IMMEDIATE RELEASE

August 2, 2007

 

MILLENNIUM BANKSHARES REPORTS 2ND QUARTER AND YTD RESULTS

 

Reston, VA – August 2, 2007 – Millennium Bankshares Corporation (Nasdaq: MBVA) today announced a net loss of $251,000 for the quarter ended June 30, 2007, or $(0.03) per diluted share, versus net income of $834,000, or $0.09 per diluted share, for the same period in 2006. For the six months ended June 30, 2007, Millennium reported net income of $330,000, or $0.04 per diluted share compared with net income of $1.661 million, or $0.18 per diluted share, for the same period last year.

 

Earnings were negatively impacted in the second quarter by a significantly higher loan loss provision due to loan grading changes in our commercial loan portfolio and a decline in net interest income due in large measure from the effect of placing $11.6 million in loans held for sale on nonaccrual status during the quarter.

 

Richard I. Linhart, who joined Millennium as its new President and Chief Executive Officer on July 18, 2007, said, “A comprehensive review of our commercial loan portfolio was recently completed. This resulted in 26 loans totaling $27.3 million being downgraded due to missing or stale documentation or change in the borrower’s financial condition. $2.5 million in commercial loans were also placed on nonaccrual during the quarter. While the downgrading does not necessarily indicate a loss will be incurred, we were required to increase our allowance for loan losses based on the quantitative and qualitative factors considered when determining allowance adequacy. Improving our asset quality is our number one priority in the short term. We are working to cure these documentation deficiencies and take additional appropriate measures required to restore or improve the loan grading. To the extent the deficiencies can, and are cured, there should be direct positive correlation on the required allowance for loan losses going forward.”

 

Mr. Linhart further explained, “In addition to the above, we have completed the evaluation of the fair value of the loans held for sale portfolio at June 30, 2007. Concurrent with this evaluation, $11.6 million of mortgages that are being foreclosed upon were put on nonaccrual status. This had the effect of a one-time reversal of accrued interest in the amount of $596,000 during the second quarter. Based on the results of the evaluation, management determined that the valuation allowance at June 30, 2007, which was established by a previous charge to earnings taken in 2006, continued to remain adequate. Of course, we will begin, and hope to consummate, a number of foreclosure sales in the third quarter and the results of the sales will either validate our reserve to date, or indicate additional reserves will be required. At June 30, 2007, we had $8.5 million of loans in the held for sale portfolio that were not past due. As these loans continue to perform satisfactorily during the balance of this year, these loans should become more saleable and we expect to sell all the performing loans as quickly as possible.”

 

The after-tax effect on second quarter earnings for the additional provision for loan losses required due to the loan downgrades and the interest reversal on the held for sale loans placed on nonaccrual was approximately $708,000.

 

Balance Sheet Overview

Comparing June 30, 2007 to December 31, 2006, investments increased 12% as the Company executed an investment leveraging strategy, funded by FHLB advances, designed to further improve its overall risk


 

profile. Net loans increased just 4%, as production did not keep pace with runoff. Loans held for sale decreased by $16.6 million as the previously announced wind-down of the mortgage operations continued. Total deposits decreased by 19% while borrowings increased by $62.0 million, as the Company actively allowed the runoff of higher cost certificates of deposit in an effort to stabilize its net interest margin. The Company’s ratio of equity to assets stood at 8.15% at June 30, 2007, up from 8.04% at December 31, 2006.

 

Non-GAAP Presentations

 

This press release also refers to the efficiency ratio, which is computed by dividing noninterest expense by the sum of fully taxable equivalent net interest income and noninterest income. This is a non-GAAP financial measure that we believe provides investors with important information regarding our operating efficiency. Comparison of our efficiency ratio with those of other companies may not be possible because other companies may calculate the efficiency ratio differently.

 

Forward-Looking Statements

This news release contains comments, information and guidance that constitute forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from the results expressed in forward-looking statements. Factors that might cause such a difference include a failure to maintain effective systems of internal and disclosure control, management changes, changes in estimates regarding loss exposure from the wind down of mortgage operations and subsequent disposition of remaining held for sale loans, changes in interest rates and interest rate relationships; demand for products and services; the degree of competition by traditional and non-traditional competitors; changes in banking regulation; changes in tax laws; changes in prices, levies, and assessments; the impact of technological advances; governmental and regulatory policy changes; the outcomes of contingencies and litigation; trends in customer behavior as well as their ability to repay loans; changes in the national and local economy; and other factors, including risk factors, referred to from time to time in filings made by Millennium Bankshares with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2006. Millennium Bankshares undertakes no obligation to update or clarify forward-looking statements, whether as a result of new information, future events or otherwise.

About Millennium Bankshares  

Millennium Bankshares Corporation is a financial holding company headquartered in Reston, Virginia. It was incorporated in 1998 and began operations in April 1999. Millennium provides commercial and consumer banking services through Millennium Bank, National Association. Millennium Bank is a nationally chartered community bank with six banking offices – four in Northern Virginia (Reston, Herndon, Sterling and Warrenton) and two in Richmond, Virginia (Broad Street and Colonial Heights). The bank provides a broad range of commercial and retail banking services designed to meet the needs of businesses and consumers in the communities it serves. The Company’s internet address is www. millenniumbankshares.com.

 

Contacts:

Richard I. Linhart, President and CEO

(703) 464-1966

 

Dale G. Phelps, EVP and CFO

(703) 464-1962

 

 


 

Millennium Bankshares Corporation

Financial Highlights

(Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

(Dollars in thousands, except per share data)

June 30,

%

 

June 30,

%

 

2007

2006

Change

 

2007

2006

Change

Operations

 

 

 

 

 

 

 

Interest income (1)

$8,284

$6,703

23.6

 

16,785

12,946

29.7

Interest expense (1)

5,699

3,880

46.9

 

11,325

7,117

59.1

Net interest income

2,585

2,823

(8.4)

 

5,460

5,829

(6.3)

Provision for loan losses (1)

618

55

1,023.6

 

873

55

1487.3

Net interest income after provision

 

 

 

 

 

 

 

for loan losses

1,967

2,768

(28.9)

 

4,587

5,774

(20.6)

Other income (loss)(1)

346

442

(21.7)

 

717

832

(13.8)

Operating expense (1)

2,761

2,455

12.5

 

5,282

4,999

5.7

Income (loss) from continuing operations before income taxes

(448)

755

(159.3)

 

22

1,607

(98.6)

Income tax expense (1)

(357)

118

(402.5)

 

(360)

292

(223.3)

Income (loss) from continuing operations

(91)

637

(114.3)

 

382

1,315

(71.0)

Income (loss) from discontinued operations (net of tax)

(160)

197

(181.2)

 

(52)

346

(115.0)

Net income

(251)

834

(130.1)

 

330

1,661

(80.1)

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

Basic earnings per share from continuing operations

(0.01)

0.07

(114.3)

 

0.04

0.15

(73.3)

Diluted earnings per share from continuing operations

(0.01)

0.07

(114.3)

 

0.04

0.14

(71.4)

Basic earnings per share from discontinued operations

(0.02)

0.02

(200.0)

 

(0.01)

0.04

(125.0)

Diluted earnings per share from discontinued operations

(0.02)

0.02

(200.0)

 

(0.01)

0.04

(125.0)

Basic earnings per share

(0.03)

0.09

(133.3)

 

0.04

0.19

(78.9)

Diluted earnings per share

(0.03)

0.09

(133.3)

 

0.04

0.18

(77.8)

Book value per share

5.11

5.30

(3.6)

 

 

 

 

Closing stock price

8.55

8.77

(2.5)

 

 

 

 

Weighed average shares-Basic

8,926,291

8,903,595

 

 

8,926,291

8,888,339

 

Weighted average shares-Diluted

9,144,158

9,126,700

 

 

9,166,084

9,116,156

 

 

 

 

 

 

 

 

 

 

 

Selected Average Balance Sheet Data

 

 

 

 

 

 

 

Investments

203,368

148,873

36.6

 

194,920

142,223

37.1

Loans, net of deferred fees (including loans held for sale)

325,528

272,396

19.5

 

326,421

267,446

22.1

Total assets

555,664

448,424

23.9

 

561,906

434,134

29.4

Deposits

393,127

324,990

21.0

 

423,175

307,551

37.6

Borrowings

111,931

72,597

54.2

 

86,929

76,181

14.1

Shareholders' equity

47,271

47,578

(0.6)

 

47,302

47,826

(1.1)

 

 

 

 

 

 

 

 

Performance Ratios

 

 

 

 

 

 

 

Return on average assets

(0.18)%

0.75%

 

 

0.12%

0.77%

 

Return on average equity

(2.13)%

7.03%

 

 

1.41%

7.00%

 

Net interest margin

2.04%

2.93%

 

 

2.23%

3.10%

 

Efficiency ratio

84.50%

71.09%

 

 

78.07%

71.38%

 

Nonperforming assets to total assets (2)

1.74%

0.48%

 

 

 

 

 

Net charge-offs to average loans

0.35%

-0.01%

 

 

0.17%

-0.01%

 

Allowance for loan losses to loans held for investment

1.30%

1.10%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

December 31,

 

 

 

 

 

Selected Balance Sheet Data

2007

2006

 

 

 

 

 

Investments

192,678

172,703

11.6

 

 

 

 

Loans, net of allowance for loan losses

305,910

295,057

3.7

 

 

 

 

Loans, held for sale, net of valuation reserve

21,177

37,728

(43.9)

 

 

 

 

Total assets

559,469

591,542

(5.4)

 

 

 

 

Deposits

392,957

482,729

(18.6)

 

 

 

 

Borrowings

117,905

55,900

110.9

 

 

 

 

Shareholders' equity

45,575

47,552

(4.2)

 

 

 

 

 

 

 

 

 

 

 

 

(1) Conforms prior periods for discontinued operations presentation.

(2) Excludes $14.0 million in nonperforming held for sale loans at June 30, 2007 for which separate fair value reserves have been established.


The following information was filed by Millennium Bankshares Corp (MBVA) on Monday, August 6, 2007 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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