Valley Bancorp (NASDAQ:VLLY)
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Valley Bancorp (NASDAQ: VLLY)
Highlights
-- Third quarter earnings of $1,453,000, up 65% from $879,000 in
third quarter 2004.
-- Third quarter earnings per diluted share of $0.49 up 4% from
$0.47 in third quarter 2004.
-- ROE and ROA of 14.51% and 1.63% respectively in third quarter
2005.
-- Total net loans increased $96 million, up 51% from third
quarter 2004.
Valley Bancorp, the holding company for Valley Bank, today
announced net income of $1,453,000 or $0.49 per diluted share for the
quarter ended Sept. 30, 2005, a 65% increase from net income of
$879,000 for the third quarter of 2004. Valley also announced earnings
for the nine months ended Sept. 30, 2005 of $3,950,000 or $1.34 per
diluted share, an 80% increase over the $2,192,000 earned during the
same period in 2004.
Return on average assets and return on average equity for the
quarter ended Sept. 30, 2005 were 1.63% and 14.51% as compared to
1.51% and 19.47% for the same period in 2004, respectively. For the
nine months ended Sept. 30, 2005, return on average assets and return
on average equity were 1.63% and 13.74%, respectively. The return on
average equity for the third quarter 2005 was lower than the third
quarter 2004 due to a higher average equity balance during the quarter
resulting from the successful completion of the Initial Public
Offering that closed on Sept. 28, 2004.
Valley's total assets grew $122 million or 49%, to $373 million at
Sept. 30, 2005 as compared to $251 million at Sept. 30, 2004. At Sept.
30, 2005, Valley's total net loans were $282 million, total deposits
were $316 million, and stockholders' equity was $40 million.
Barry L. Hulin, president and chief executive officer, stated, "I
am extremely proud of the efforts of all the company's employees
during what was a challenging quarter. This strong performance was
achieved notwithstanding increased funding costs and the occupancy of
our new headquarters and branch. With continued strength in the local
economy, we remain optimistic for the balance of the year."
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*T
Financial Performance Indicators for the Three and Nine Months Ended
Sept. 30, 2005 and 2004
(Dollars in thousands, except per share data)
(Unaudited)
At Sept. 30, Change
--------------------- -------------------
2005 2004 $ or # %
---------- ---------- ---------- --------
Balance Sheet:
Loans net of Unearned Fees $285,321 $188,614 $96,707 51.27%
Allowance for Loan Losses $(2,841) $(2,026) $(815) 40.23%
---------- ---------- ----------
Loans, net $282,480 $186,588 $95,892 51.39%
Total Assets $373,183 $251,244 $121,939 48.53%
Total Earning Assets $358,104 $236,334 $121,770 51.52%
Total Investments $75,624 $49,746 $25,878 52.02%
Total Deposits $315,625 $214,417 $101,208 47.20%
Total Borrowed Funds $15,436 $477 $14,959 3136.06%
Total Liabilities $332,874 $216,003 $116,871 54.11%
Total Stockholders' Equity $40,309 $35,241 $5,068 14.38%
Common Shares Outstanding 2,824,901 2,789,228 35,673 1.28%
Book Value per Share $14.27 $12.63 $1.64 12.96%
Allowance for Loan Losses to
Total Loans 1.00% 1.07% -0.07%
Total Stockholders' Equity to
Total Assets 10.80% 14.03% -3.23%
Total Loans to Total Deposits
& Borrowed Funds 85.33% 86.83% -1.50%
Three Months Ended
Sept. 30, Change
--------------------- -------------------
2005 2004 $ or # %
---------- ---------- ---------- --------
Income Statement:
Interest Income $6,199 $3,474 $2,725 78.44%
Interest Expense $1,844 $670 $1,174 175.22%
---------- ---------- ----------
Net Interest Income $4,355 $2,804 $1,551 55.31%
Provision for Loan Losses $324 $120 $204 170.00%
Non-interest Income $66 $63 $3 4.76%
Non-interest Expense $1,892 $1,414 $478 33.80%
---------- ---------- ----------
Income before Income Taxes $2,205 $1,333 $872 65.42%
Income Tax Expense $752 $454 $298 65.64%
---------- ---------- ----------
Net Income $1,453 $879 $574 65.30%
========== ========== ==========
Basic Earnings Per Share $0.51 $0.48 $0.03 6.25%
Diluted Earnings Per Share $0.49 $0.47 $0.02 4.26%
Weighted Average Shares -
Basic 2,822,814 1,817,978 1,004,836 55.27%
Weighted Average Shares -
Diluted 2,963,453 1,888,336 1,075,117 56.93%
Average Total Assets $357,129 $232,629 $124,500 53.52%
Average Earning Assets $342,827 $221,029 $121,798 55.10%
Average Stockholders' Equity $40,055 $18,059 $21,996 121.80%
Net Interest Margin (1) 5.04% 5.05% -0.01%
Return on Assets (1) 1.63% 1.51% 0.12%
Return on Equity (1) 14.51% 19.47% -4.96%
Non-interest Expense to
Average Earning Assets (1) 2.21% 2.56% -0.35%
Efficiency Ratio 42.80% 49.17% -6.38%
Full Time Equivalent
Employees 57 47 10 21.28%
Nine Months Ended
Sept. 30, Change
--------------------- -------------------
2005 2004 $ or # %
---------- ---------- ---------- --------
Income Statement:
Interest Income $15,943 $9,536 $6,407 67.19%
Interest Expense $4,363 $1,982 $2,381 120.13%
---------- ---------- ----------
Net Interest Income $11,580 $7,554 $4,026 53.30%
Provision for Loan Losses $604 $506 $98 19.37%
Non-interest Income $203 $224 $(21) -9.38%
Non-interest Expense $5,187 $3,946 $1,241 31.45%
---------- ---------- ----------
Income before Income Taxes $5,992 $3,326 $2,666 80.16%
Income Tax Expense $2,042 $1,134 $908 80.07%
---------- ---------- ----------
Net Income $3,950 $2,192 $1,758 80.20%
========== ========== ==========
Basic Earnings Per Share $1.41 $1.25 $0.16 12.80%
Diluted Earnings Per Share $1.34 $1.20 $0.14 11.67%
Weighted Average Shares -
Basic 2,804,054 1,756,650 1,047,404 59.63%
Weighted Average Shares -
Diluted 2,955,666 1,819,770 1,135,896 62.42%
Average Total Assets $322,197 $220,629 $101,568 46.04%
Average Earning Assets $308,547 $209,420 $99,127 47.33%
Average Stockholders' Equity $38,315 $17,371 $20,944 120.57%
Net Interest Margin (1) 5.02% 4.82% 0.20%
Return on Assets (1) 1.63% 1.32% 0.31%
Return on Equity (1) 13.74% 16.82% -3.08%
Non-interest Expense to
Average Earning Assets (1) 2.24% 2.51% -0.27%
Efficiency Ratio 44.02% 50.69% -6.67%
-----------------------------
(1) Annualized
*T
Net Interest Income and Net Interest Margin
Net interest income for the third quarter of 2005 was $4.4
million. This represents an increase of $1.6 million or 55% as
compared to $2.8 million for the third quarter of 2004. The increase
was primarily a result of higher interest income from loans and other
earning assets due to increased balances outstanding. Average earning
assets increased by $122 million or 55% to $343 million for the
quarter ended Sept. 30, 2005 as compared to $221 million for the third
quarter of 2004. The net interest margin for the quarter ended Sept.
30, 2005 was 5.04% as compared to 5.05% for the same period in 2004.
For the nine months ended Sept. 30, 2005, net interest income
increased by $4.0 million or 53% to $11.6 million as compared to $7.6
million for the same period in 2004. Average earning assets for the
nine-month period in 2005 totaled $309 million as compared to $209
million for the same period in 2004, an increase of $100 million or
48%. The net interest margin for the nine months ended Sept. 30, 2005
was 5.02% as compared to 4.82% for the same period in 2004. Rising
interest rates and increasing loans and investment securities
outstanding contributed to the improved net interest margin.
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Distribution of Assets, Liabilities and Stockholders' Equity;
Interest Rates and Interest Differential
Three Months Ended Sept. 30,
-----------------------------------------------------
2005 2004
-------------------------- --------------------------
Average Average
Average Interest Yield/ Average Interest Yield/
Balance Income/ Cost Balance Income/ Cost
(1) Expense (2) (1) Expense (2)
--------- -------- ------- --------- -------- -------
Assets (Dollars in thousands)
Earning assets:
Loans (3) (4)
(5) $269,573 $5,541 8.15% $181,289 $3,279 7.20%
Federal funds
sold (6) 26,825 234 3.46% 17,274 60 1.38%
Interest bearing
deposits (6) 7,566 66 3.46% 9,705 53 2.17%
Investment
securities (6) 38,863 358 3.65% 12,761 82 2.56%
--------- -------- --------- --------
Total earning
assets and
interest income 342,827 6,199 7.17% 221,029 3,474 6.25%
Non-interest
earning assets:
Cash and due
from banks 7,455 8,218
Premises and
equipment 6,713 4,358
Other assets 2,800 1,039
Allowance for
credit losses (2,666) (2,015)
--------- ---------
Total assets $357,129 $232,629
========= =========
Liabilities and
Stockholders'
Equity
Interest bearing
liabilities:
Interest bearing
demand deposits $86,387 $341 1.57% $73,386 $182 0.99%
Savings deposits 11,341 41 1.43% 12,156 15 0.49%
Time deposits
$100,000 or
more 67,520 554 3.26% 31,405 172 2.18%
Other time
deposits 86,456 743 3.41% 49,835 294 2.34%
Short-term
borrowings - - - - - -
Long-term
borrowings 15,443 165 4.24% 483 7 6.59%
--------- -------- --------- --------
Total interest
bearing
liabilities 267,147 1,844 2.74% 167,265 670 1.59%
Noninterest-
bearing
liabilities:
Demand deposits 48,204 46,489
Other
liabilities 1,723 816
Stockholders'
equity 40,055 18,059
--------- ---------
Total
liabilities and
stockholders'
equity $357,129 $232,629
========= =========
Net Interest
Spread (7) 4.43% 4.66%
-------- --------
Net interest
income/margin (8) $4,355 5.04% $2,804 5.05%
======== ======= ======== =======
--------------------------
(1) Average balances are obtained from the best available daily data.
(2) Annualized.
(3) Loans are gross of allowance for credit losses but after unearned
fees.
(4) Non-accruing loans are included in the average balances.
(5) Interest income includes loan fees of $24,000 and $82,000 for the
three months ended September 2005 and 2004, respectively.
(6) All investments are taxable.
(7) Represents the difference between the yield on interest-earning
assets and the cost of interest-bearing liabilities.
(8) Net interest margin represents net interest income as a
percentage of average interest-earning assets.
-----------------------------------------------------
Nine Months Ended Sept. 30,
-----------------------------------------------------
2005 2004
-------------------------- --------------------------
Average Average
Average Interest Yield/ Average Interest Yield/
Balance Income/ Cost Balance Income/ Cost
(1) Expense (2) (1) Expense (2)
--------- -------- ------- --------- -------- -------
Assets (Dollars in thousands)
Earning assets:
Loans (3) (4)
(5) $239,703 $14,194 7.92% $166,350 $8,947 7.18%
Federal funds
sold (6) 20,934 474 3.03% 16,460 138 1.12%
Interest bearing
deposits (6) 9,096 206 3.03% 12,444 193 2.07%
Investment
securities (6) 38,814 1,069 3.68% 14,166 258 2.43%
--------- -------- --------- --------
Total earning
assets and
interest income 308,547 15,943 6.91% 209,420 9,536 6.08%
Non-interest
earning assets:
Cash and due
from banks 7,404 7,684
Premises and
equipment 6,268 4,392
Other assets 2,408 1,058
Allowance for
credit losses (2,430) (1,925)
--------- ---------
Total assets $322,197 $220,629
========= =========
Liabilities and
Stockholders'
Equity
Interest bearing
liabilities:
Interest bearing
demand deposits $78,373 $816 1.39% $69,417 $457 0.88%
Savings deposits 11,905 81 0.91% 11,159 41 0.49%
Time deposits
$100,000 or
more 59,948 1,335 2.98% 31,960 536 2.24%
Other time
deposits 80,256 1,933 3.22% 50,590 921 2.43%
Short-term
borrowings - - - 102 1 1.31%
Long-term
borrowings 6,057 198 4.37% 492 26 7.06%
--------- -------- --------- --------
Total interest
bearing
liabilities 236,539 4,363 2.47% 163,720 1,982 1.62%
Noninterest-
bearing
liabilities:
Demand deposits 45,907 38,716
Other
liabilities 1,436 822
Stockholders'
equity 38,315 17,371
--------- ---------
Total
liabilities and
stockholders'
equity $322,197 $220,629
========= =========
Net Interest
Spread (7) 4.44% 4.46%
-------- --------
Net interest
income/margin (8) $11,580 5.02% $7,554 4.82%
======== ======= ======== =======
--------------------------
(1) Average balances are obtained from the best available daily data.
(2) Annualized.
(3) Loans are gross of allowance for credit losses but after unearned
fees.
(4) Non-accruing loans are included in the average balances.
(5) Interest income includes loan fees of $106,000 and $319,000 for
the nine months ended September 2005 and 2004, respectively.
(6) All investments are taxable.
(7) Represents the difference between the yield on interest-earning
assets and the cost of interest-bearing liabilities.
(8) Net interest margin represents net interest income as a
percentage of average interest-earning assets.
*T
Provision for Loan Losses and Related Allowance for Loan Losses
The provision for loan losses was $324,000 for the three months
ended Sept. 30, 2005 as compared to $120,000 for the same period in
2004. For the nine months ended Sept. 30, 2005, the provision for loan
losses was $604,000 as compared to $506,000 for the same period in
2004. The increase in the provision was primarily to reflect the
growth in the loan portfolio for the quarter and the nine months of
2005. The allowance for loan losses of $2.8 million at Sept. 30, 2005
reflected management's assessment of the current risk in the loan
portfolio and represented 1% of total loans. Valley had two
non-accrual loans totaling $145,000 and one loan of $11,000 that was
past due 90 days or more as of Sept. 30, 2005.
Non-interest Income and Non-interest Expense
Non-interest income was $66,000 for the three months ended
Sept. 30, 2005 as compared to $63,000 for the same period in 2004.
For the nine months ended Sept. 30, 2005, non-interest income was
$203,000 as compared to $224,000 for the same period in 2004. The
decrease of $21,000 was due primarily to lower aggregate service
charges on deposit accounts. Higher average balances on deposit
accounts maintained by the customers continued to hold down service
charge income.
Non-interest expense was $1.9 million for the three months ended
Sept. 30, 2005, an increase of $478,000 over the same period in 2004.
For the nine months ended Sept. 30, 2005, non-interest expense was
$5.2 million, an increase of $1.2 million over the same period in
2004. The increase was primarily a result of increased compensation
and employee benefits costs due to increasing staff levels, higher
professional fees associated with being a publicly traded company,
higher data processing expenses due to increased number of accounts
and transactions being processed, higher marketing and advertising
costs, and higher occupancy costs associated with the move to the new
headquarters and the opening of the fourth branch during the quarter
ended Sept. 30, 2005.
Balance Sheet
Valley's total assets were $373 million at Sept. 30, 2005, an
increase of $122 million or 49% from $251 million at Sept. 30, 2004.
The increase was due primarily to a $96 million net increase in the
loan portfolio, and a $25 million increase in available for sale
securities. Total deposits increased by $102 million or 48% to $316
million at Sept. 30, 2005, as compared to $214 million at Sept. 30,
2004. Valley stockholders' equity increased by $5 million or 14% to
$40 million at Sept. 30, 2005 from $35 million at Sept. 30, 2004, due
primarily to increased retained earnings.
About Valley Bancorp
Headquartered in Las Vegas, Valley Bancorp is the holding company
for Valley Bank, a Nevada state-chartered commercial bank with
branches in Las Vegas, Henderson, and Pahrump, Nev.
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Web site: Valley Bancorp's Web site - www.valleybancorp.com
Valley Bank's Web site - www.vbnv.com
*T
This news release contains forward-looking statements. These
statements are subject to a number of uncertainties and risks
including, but not limited to, the company's inability to generate
increased earning assets, sustain credit losses, maintain adequate net
interest margin, control fluctuations in operating results, maintain
liquidity to fund assets, retain key personnel, and other risks
detailed from time to time in Valley Bancorp's filings with the
Securities and Exchange Commission, including our annual report on
Form 10-K for the period ended Dec. 31, 2004. Actual results may
differ.