<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly period ended March 31, 2000
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ---------- to --------
Commission File No. 333-37225
EASTERN VIRGINIA BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
VIRGINIA 54-1866052
(State of Incorporation) (I.R.S. Employer Identification No.)
307 Church Lane, Tappahannock, Virginia 22560
(Address of principal executive offices)
Registrant's telephone number (804) 443-4333
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes x No __
---
The number of shares of the registrant's Common Stock outstanding as of May 2,
2000 was 4,930,083.
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<PAGE>
EASTERN VIRGINIA BANKSHARES, INC.
FORM 10-Q
For the Quarter Ended March 31, 2000
<TABLE>
<CAPTION>
Part I
- ------
<S> <C> <C>
Item 1. Financial Statements 2
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 7
Item 3. Quantitative and Qualitative Disclosures About Market Risk 11
Part II
- -------
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 11
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Eastern Virginia Bankshares, Inc. and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
---- ----
<S> <C> <C>
Assets:
Cash and due from banks $ 12,353 $ 10,258
Federal funds sold 3,799 -
Securities available for sale at fair value 42,598 43,295
Securities held to maturity at amortized cost
fair value of $43,940,898 and $44,451,379 44,491 44,781
Loans, net 278,296 269,704
Deferred income taxes 1,672 1,641
Bank premises and equipment 4,782 4,568
Accrued interest receivable 2,614 2,582
Other real estate 418 243
Other assets 785 767
-------- --------
Total assets $391,808 $377,839
-------- --------
Liabilities and Shareholders' Equity
Liabilities
Noninterest-bearing demand accounts $ 35,616 $ 32,815
Savings accounts and interest bearing deposits 137,612 139,248
Time deposits 160,779 150,584
-------- --------
Total deposits 334,007 322,647
Short-term borrowings 5,000 6,468
Long-term debt 8,000 3,000
Accrued interest payable 868 796
Other liabilities 2,140 2,133
-------- --------
Total liabilities 350,015 335,044
Shareholders' Equity
Common stock of $2 par value per share, authorized
50,000,000 shares, issued and outstanding
4,937,183 and 5,032,263 respectively 9,874 10,064
Surplus 419 2,014
Retained earnings 32,230 31,388
Accumulated other comprehensive income (730) (671)
-------- --------
Total shareholders' equity 41,793 42,795
Total liabilities and shareholders' equity $391,808 $377,839
-------- --------
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Eastern Virginia Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income (Unaudited)
(Dollars in thousands except share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31
2000 1999
---- ----
<S> <C> <C>
Interest Income:
Loans $6,074 $ 5,404
Interest on investment securities - tax exempt 543 481
Income on securities available for sale:
Interest 689 638
Dividends 16 14
Interest on federal funds sold 33 104
------ --------
Total interest income 7,355 6,641
Interest Expense
Deposits 3,112 2,858
Short-term borrowings 135 -
Long-term debt 55 -
------ --------
Total interest expense 3,302 2,858
------ --------
Net interest income 4,053 3,783
Provision for loan losses 132 114
------ --------
Net interest income after provision for loan losses 3,921 3,669
Other income
Service charges on deposit accounts 394 315
Gain (loss) on sale of available for sale securities (5) -
Other operating income 101 98
------ --------
490 413
------ --------
Other Expenses
Salaries and benefits 1,242 1,136
Net occupancy expense of premises 377 345
Other operating expenses 821 629
------ --------
2,440 2,110
------ --------
Income before income taxes 1,971 1,972
Income Tax Expense 484 494
------ --------
Net income $1,487 $ 1,478
------ --------
Earnings Per Share, basic and assuming dilution $0.30 $0.29
Dividends per share $0.13 $0.12
</TABLE>
See Notes to Financial Statements
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Eastern Virginia Bankshares, Inc. and Subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
------------------
March 31 March 31
2000 1999
---- ----
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 1,487 $ 1,478
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 242 213
Provision for loan losses 132 114
Losses (gains) realized on available for sale securities 5 -
Accretion and amortization, net 9 7
(Increase) decrease in other assets (246) 170
Increase (decrease) in other liabilities 79 1,762
------- --------
Net cash provided by operating activities 1,708 3,744
Cash Flows from Investing Activities
Proceeds from maturities, calls, and paydowns
of available for sale securities 750 2,544
Proceeds from sales of available for sale securities 227 -
Purchase of securities available for sale (374) (1,364)
Proceeds from maturities of investment securities 280 1,191
Purchase of investment securities - (2,538)
Net (increase) decrease in loans (8,703) (9,903)
Purchases of bank premises and equipment (456) (106)
Proceeds from sale of OREO - 25
------- --------
Net cash (used in) investing activities (8,276) (10,151)
Cash Flows from Financing Activities
Net increase in noninterest bearing and interest bearing
demand deposits and savings accounts 1,165 164
Net increase (decrease) in certificates of deposit 10,195 (747)
Sale of common stock - -
Acquisition of common stock (1,785) (209)
Dividends declared (645) (617)
Increase (decrease) in borrowings 3,532 -
------- --------
Net cash provided by financing activities 12,462 (1,409)
------- --------
Increase (decrease) in cash and cash equivalents 5,894 (7,816)
Cash and cash equivalents
Beginning of period 10,258 21,522
------- --------
End of period $16,152 $ 13,706
------- --------
Supplemental Disclosures of Cash Flow Information
Cash paid for:
Interest on deposits and other borrowings $ 3,230 $ 2,812
Income taxes $ 399 $ -
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Eastern Virginia Bankshares, Inc. and Subsidiaries
Consolidated Statement of Changes in Shareholders' Equity (Unaudited)
For the Three Months Ended March 31, 2000 and 1999
(Dollars in thousands)
<TABLE>
<CAPTION>
Accumulated
Other
Comprehensive Retained Comprehensive Common Capital
Total Income Earnings Income Stock Surplus
----- ------------- -------- ------------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Balances - January 1, 1999 $42,257 $ 27,877 $ 365 $10,286 $ 3,729
Comprehensive income:
Net income 1,478 1,478 1,478
Other comprehensive income, net of tax
Unrealized gain/(loss) on securities available for sale:
Unrealized holding gain/(loss) arising during the period (202) (202)
Less: reclassification adjustment - -
------- ---------
Other comprehensive income, net of tax (202) - (202)
------- ------
Total comprehensive income $1,478
------
Shares purchased and retired (209) (24) (185)
Dividends declared (617) (617) - - -
------- -------- --------- ------- -------
Balances-March 31, 1999 $42,707 $ 28,738 $ 163 $10,262 $ 3,544
------- -------- --------- ------- -------
Balances - January 1, 2000 $42,795 $ 31,388 $ (671) $10,064 $ 2,014
Comprehensive income:
Net income 1,487 1,487 1,487
Other comprehensive income, net of tax
Unrealized gain/(loss) on securities available for sale:
Unrealized holding gain/(loss) arising during the period (62) (62) (62)
Less: reclassification adjustment 3 3 3
------- ------ ---------
Other comprehensive income, net of tax (59) (59) (59)
------- ------
Total comprehensive income $1,428
------
Shares purchased and retired (1,785) (190) (1,595)
Dividends declared (645) (645) - - -
------- -------- --------- ------- -------
Balances-March 31, 2000 $41,793 $ 32,230 $ (730) $ 9,874 $ 419
------- -------- --------- ------- -------
</TABLE>
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. Financial Statements
EASTERN VIRGINIA BANKSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. The Consolidated Balance Sheet as of March 31, 2000, the Consolidated
Statements of Income for the three-month periods ended March 31, 2000, and
March 31, 1999, the Consolidated Statement of Cash Flows for the three-
month periods ended March 31, 2000, and March 31, 1999, and the
Consolidated Statement of Changes in Shareholders' Equity for the three-
month periods ended March 31, 2000, and March 31, 1999, prepared in
accordance with instructions for Form 10-Q, are unaudited and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. However, in the
opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting of normal recurring
accruals) considered necessary to present fairly the financial position as
of March 31, 2000. The statements should be read in conjunction with the
Notes to Consolidated Financial Statements included in Eastern Virginia
Bankshares' Annual Report on Form 10-K for the year ended December 31,
1999.
2. Eastern Virginia Bankshares (the "Company or EVB") was organized and
chartered under the laws of the Commonwealth of Virginia on September 5,
1997 and commenced operations effective December 29, 1997 when Southside
Bank (SSB) and Bank of Northumberland, Inc. (BNI) became wholly owned
subsidiaries of EVB. The transaction was accounted for using the
pooling-of-interest method of accounting. The Corporation has received
approval from regulatory authorities for the opening of a new subsidiary
named Hanover Bank. Hanover Bank will be wholly owned by Eastern Virginia
Bankshares and is scheduled to open in May, 2000.
3. The results of operations for the three-month periods ended March 31, 2000
and 1999, are not necessarily indicative of the results to be expected for
the full year.
4. Earnings per share have been computed by dividing net income by the
weighted average number of shares outstanding for the period. Weighted
average shares used for the computation were 4,969,235 and 5,138,824 for
the three months ended March 31, 2000 and 1999.
5. EVB's amortized cost and estimated fair values of securities at March 31,
2000 are as follows:
(in thousands)
<TABLE>
<CAPTION>
March 31, 2000
----------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
------------ ------------- ------------- ------------
<S> <C> <C> <C> <C>
Available for Sale:
U.S. Government obligations $ 8,264 $ 1 $ 100 $ 8,165
Obligations of U.S. Government agencies 22,783 20 770 22,033
Obligations of state/political subdivisions 7,033 3 154 6,882
Corporate bonds 4,278 - 106 4,172
Equity securities 1,346 - - 1,346
------- ---- ------ -------
43,704 24 1,130 $42,598
Held to Maturity:
Obligations of state/political subdivisions 44,491 184 734 43,941
------- ---- ------ -------
Total $88,195 $208 $1,864 $86,539
------- ---- ------ -------
</TABLE>
<PAGE>
Note 6. EVB's loan portfolio is composed of the following:
(in thousands)
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
-------- --------
<S> <C> <C>
Real estate - construction $ 8,931 $ 8,267
Real estate - mortgage 157,135 152,905
Commercial real estate 35,303 33,103
Commercial, industrial and
agricultural loans 31,299 31,003
Consumer loans 53,259 51,890
All other loans 461 460
-------- --------
Total loans 286,388 277,628
Less unearned income (3,827) (3,770)
Less allowance for loan losses (4,265) (4,154)
-------- --------
Total net loans $278,296 $269,704
-------- --------
</TABLE>
EVB has $1.4 million in non-performing loans at March 31, 2000.
Note 7. Allowance for Loan Losses
<TABLE>
<CAPTION>
March 31 December 31
2000 1999
------ ------
<S> <C> <C>
Balance January 1 $4,154 $3,860
Provision charged against income 132 510
Recoveries of loans charged off 125 250
Loans charged off (146) (466)
------ ------
Balance at end of period $4,265 $4,154
------ ------
</TABLE>
Note 8. Accounting Rule Changes
There were no new Financial Accounting Standards Board promulgations in the
first quarter of 2000 that will impact Eastern Virginia Bankshares, Inc.
PART 1 - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Management's discussion and analysis of financial information is presented to
aid the reader in understanding and evaluating the financial condition and
results of operations of Eastern Virginia Bankshares, Inc. This discussion
provides information about the major components of the results of operations,
financial condition, liquidity and capital resources of the Company. This
discussion should be read in conjunction with the Consolidated Financial
Statements and Notes to Consolidated Financial Statements presented elsewhere in
this report. Operating results include Southside Bank, Bank of Northumberland,
Inc., and Hanover Bank combined for all periods presented.
OVERVIEW AND FINANCIAL CONDITION
Net income increased 1% to $1,487,000 for the first quarter of 2000, compared to
$1,478,000 for the same period in 1999. Earnings per share were up 3.4% to
$0.30, compared to $0.29 in the first quarter of 1999. The greater increase in
earnings per share is attributable to the Company's common stock share
repurchase program which decreased average shares outstanding by nearly 170
thousand shares, compared to the first three months of 1999. Management is
pleased to be able to maintain earnings per share at or above 1999 levels in a
year in which it is absorbing approximately $600 thousand (pretax) of expense
related to investments in imaging technology and start up of Hanover Bank.
Total assets on March 31, 2000 were $391.8 million, up $14 million or 3.7% from
$377.8 million at December 31, 1999. For the first three months of 2000, total
assets averaged $382.4 million, 9.8 % above the first three months of 1999
<PAGE>
average of $348.3 million. Total loans, net of unearned income, amounted to
$282.6 million at March 31, 2000, an increase of $8.7 million or 3.2% from
$273.9 million at December 31, 1999. At March 31, 2000, total loans, net of
unearned income and allowance for loan losses, were $278.3 million. Net loans as
a percent of total assets were 71.0% at March 31, 2000, as compared to 71.4% at
December 31, 1999. Net loan volume for the first three months of 2000 was $8.6
million as compared to $9.9 million for the first three months of 1999.
Decreased loan growth in 2000 versus 1999 is related primarily to the higher
interest rate environment.
On March 31, 2000, the securities portfolio totaled $87.1 million, which was
$987 thousand or 1.1% less than at December 31, 1999. Funds that are invested
in the securities portfolio are part of the effort to balance the interest rate
risk. Federal funds sold were $3.8 million on March 31, 2000, compared to a
$1.5 million Federal funds purchased position at year end 1999. This increase
in Federal Funds Sold is primarily the result of financing through a $5 million
increase in long-term borrowing with the Federal Home Loan Bank of Atlanta.
Financial Accounting Standards Board Pronouncement # 115 requires the Company to
show the effect of market changes in the value of securities available for sale
(AFS). The market value of securities available for sale at March 31, 2000, was
$42.6 million as compared to $43.3 million at year end 1999. The effect of the
change in market value of AFS securities, net of income taxes, is reflected in
a line titled Accumulated other comprehensive income in Stockholders' Equity,
which was ($730 thousand) at March 31, 2000, an increase of $59 thousand from
1999 year end. This $59 thousand increase in the unrealized loss on AFS
securities is also reflected under the "Other Comprehensive Income" category on
the Consolidated Statement of Changes in Shareholders' Equity Statement.
Total deposits of $334.0 million at quarter end represented an increase of
$11.4 million or 3.5% from $322.6 million at December 31, 1999. EVB offers
attractive, yet competitive rates, to maintain a strong stable deposit base.
The quarter reflected an increase in time deposits resulting from a time deposit
promotion and an increase in noninterest bearing demand deposits.
RESULTS OF OPERATIONS
Eastern Virginia Bankshares, Inc. reported slightly increased earnings for the
first quarter of 2000. Net income for the quarter was $ 1.49 million, an
increase of $9 thousand from first quarter 1999 earnings of $1.48 million. Net
income for the first quarter was impacted by decreasing net interest margin, a
salary and benefit expense increase of $106 thousand and start up costs of
Hanover Bank scheduled to open in May, 2000. The yield on earning assets was
8.26% for the quarter, as compared to 8.21% for the same period in 1999. The
cost of interest bearing liabilities for the three month period ended March 31,
2000 was 4.34% as compared to 4.21% for the comparable period in 1999. Return
on average assets was 1.56% for the quarter, compared with 1.70% for the same
period in 1999. EVB's return on average equity was 14.10% for the quarter,
compared to 13.91% for the same period in 1999.
Net Interest Income
Net interest income totaled $4.1 million for the quarter, a $270 thousand
increase over the Company's performance for the first quarter of 1999. The
increase in net interest income results from an increase in average earning
assets, partially offset by a decrease in net interest margin on a taxable
equivalent basis. Average earning assets increased 10.1% to $367.8 million from
$334.0 million for the first three months of 1999. Compared to the same period
in 1999, average loans increased 13.6% and average securities 8.2% while average
Federal funds sold decreased 73.3%. The net interest margin for the three month
period ended March 31, 2000 was 4.67%, compared to 4.78% for the comparable
period in the prior year. The decrease in net interest margin results from a 5
basis point increase in yield on average earning assets which was more than
offset by a 13 basis point increase in the cost of interest bearing funds. The
small decrease in net interest margin was in line with industry results in a
steadily increasing interest rate environment and also was impacted by borrowing
cost with the Federal Home Loan Bank of Atlanta. Management determined that
leveraging the balance sheet with FHLB borrowing should increase shareholder
return on equity although it has a negative impact on return on assets and net
interest margin.
Noninterest Income
Noninterest income was $490 thousand for the quarter, an 18.6% increase from the
first quarter 1999 noninterest income of $413 thousand. There was a $5 thousand
loss on securities sales during the quarter compared to no gains or losses in
the first quarter of 1999. Service charges on deposit accounts of $394 thousand
reflected a 25% increase from $315
<PAGE>
thousand in the quarter ended March 31, 1999. Other miscellaneous operating
income was up 3.1% to $101 thousand, compared to $98 thousand in the three
months ended March 31, 1999.
Noninterest Expense
Total noninterest expense increased $330 thousand or 15.6% from $2.11 million
for the first quarter of 1999 to $2.44 million in 2000. The increase in
noninterest expense is the result of overall growth of the Company including
expenses associated with the start of up of Hanover Bank, scheduled to open in
May, 2000, and technology expenses from the January, 2000 implementation of
check imaging systems. Salary expense increased $106 thousand or 9.3% for the
quarter vs. 1999. Net occupancy and equipment expense increased $32 thousand or
9.3% compared to the same quarter of 1999 to $377 thousand for the first
quarter of 2000. All other noninterest expenses increased $192 thousand or
30.5% to $821 thousand for the first quarter of 2000 from $629 thousand for the
same period in 1999, primarily related to the Hanover Bank startup and an
increase of $58 thousand in marketing/advertising. Hanover Bank expense is
concentrated in the consultant and legal fee categories in addition to
advertising/marketing expense.
Income Taxes
Income tax expense for the first quarter of 2000 was $484 thousand, compared to
$494 thousand for the same period in 1999. Income taxes reflect an effective
tax rate of 24.6% in the first quarter of 2000 as compared to 25.1% for the
first three months of 1999. This slight decrease in effective tax rate for the
quarter is the result of a greater increase in tax exempt securities interest
than in total earning income.
Impact of the Year 2000 Issue
As reported in EVB's annual report to shareholders, the Company encountered no
problems related to the Year 2000 date change. Prior years' expenses related to
hardware and software upgrades and training proved to be effective investments
in ensuring quality customer service without interruption.
ASSET QUALITY
Asset quality continues to be good based on management review. Loan quality is
the result of management employing conservative loan underwriting standards
while meeting the needs of customers. Total nonperforming assets, which consist
of nonaccrual loans and foreclosed properties were $1.8 million at March 31,
2000, compared to $2.1 million at December 31, 1999, reflecting a 10.7%
improvement from 1999 year end. Total nonperforming assets continue to remain
at or near a seven year historical low as a percentage of total loans and
foreclosed property. Nonperforming assets are composed largely of residential
real estate mortgage loans secured by real estate in the Company's market area.
Based on estimated fair values of the related real estate, management considers
these amounts recoverable, with any individual deficiency well covered by the
allowance for loan losses.
Total loan charge-offs, less recoveries, amounted to $21 thousand for the
quarter, representing an annualized ratio of net charge-offs to total average
loans, net of unearned income, of 0.03%. This compares to 1999 full year charge-
offs of $216 thousand or 0.08% of average loans.
The allowance for loan losses increased to $4.27 million at March 31, 2000, as
compared to $4.15 million at December 31, 1999. The allowance increased $111
thousand in the first three months of 2000 as compared to $100 thousand for the
first three months of 1999. The increase in the allowance for loan losses
during both periods was the result of increased lending activity in the loan
portfolio. The ratio of allowance for loan losses to total loans was 1.51% at
March 31, 1999, and 1.52% at year end 1999.
Nonperforming loans at March 31, 2000 were $1.4 million, or 0.50% of total
loans, compared to $1.8 million or 0.66% at 1999 year end. Also included in
nonperforming loans are loans considered impaired on which management is
concerned about the ability of the customer to repay the loan and related
interest at the original contractual terms. At March 31, 2000, the Corporation
reported no impaired loans. The average balance of impaired loans for the first
three months of 2000 was zero. Loans past due 90 days or more and still accruing
interest because they were well secured and in the process of collection were
$763 thousand at March 31, 2000, and $1.345 million at December 31, 1999.
<PAGE>
<TABLE>
<CAPTION>
Nonperforming Assets
March 31 December 31
-------- -----------
2000 1999
---- ----
<S> <C> <C>
Nonaccrual loans $ 1,426 $ 1,822
Restructured loans - -
Other real estate owned 418 243
------- -------
Total nonperforming assets $ 1,844 $ 2,065
------- -------
Loans past due 90 days and
accruing interest $ 763 $ 1,345
Nonperforming assets to total loans
and other real estate 0.65% 0.75%
Allowance for loan losses to
nonaccrual loans 299.09% 227.99%
Allowance for loan losses to
period end loans 1.51% 1.52%
</TABLE>
EVB closely monitors those loans that are deemed to be potential problem loans.
Loans are viewed as potential problem loans according to the ability of such
borrowers to comply with current repayment terms. These loans are subject to
constant management attention, and their status is reviewed on a regular basis.
The potential problem loans identified at March 31, 2000 are generally secured
by residential and commercial real estate with appraised values that exceed the
principal balance. At March 31, 2000, potential problem loans were
approximately $1.23 million including seven lending relationships with principal
balances in excess of $100,000 which had an aggregate principal balance
outstanding of $798 thousand.
LIQUIDITY
Liquidity represents the Company's ability to meet present and future deposit
withdrawals, to fund loans, to maintain reserve requirements and to operate the
organization. To meet its liquidity needs, EVB maintains cash reserves,
primarily as federal funds sold and has an adequate flow of funds from maturing
loans, securities and short-term investments. In addition, EVB's subsidiary
banks maintain borrowing arrangements with major regional banks, the Federal
Reserve Bank and with the Federal Home Loan Bank. Management considers its
sources of liquidity to be ample to meet its estimated liquidity needs.
CAPITAL RESOURCES
EVB's strong capital position provides the resources and flexibility to support
asset growth, absorb potential losses and to expand the Company's franchise when
appropriate. The Company's risk-based capital position at March 31, 2000 was
$42.52 million, or 16.92% of risk-weighted assets, for Tier 1 capital and $45.67
million, or 18.25% for total risk based capital.
Tier 1 capital consists primarily of common shareholders' equity, while total
risk based capital adds a portion of the allowance for loan losses to Tier 1.
Risk weighted assets are determined by assigning various levels of risk to
different categories of assets and off-balance sheet activities. Under current
risk based capital standards, all banks are required to have Tier 1 Capital of
at least 4% and total capital of 8%.
Inflation
In financial institutions, unlike most other industries, virtually all of the
assets and liabilities are monetary in nature. As a result, interest rates have
a more significant impact on a bank's performance than the effects of general
levels of inflation. While interest rates are significantly impacted by
inflation, neither the timing nor the magnitude of the changes are directly
related to price level movements. The impact of inflation on interest rates,
loan demand, and deposits are reflected in the consolidated financial
statements.
Forward-Looking Statements
Certain statements in this report may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Although EVB believes that its expectations concerning certain statements that
are not historical facts are based upon reasonable assumptions within the bounds
of its knowledge of its business
<PAGE>
and operations, these forward-looking statements are subject to uncertainties
which could cause actual results to differ materially from historical results or
those anticipated. Therefore readers are cautioned not to place undue reliance
on forward-looking statements.
PART I - FINANCIAL INFORMATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in market risk since 1999 year end.
FORM 10-Q PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal proceedings to which the registrant or any of its
subsidiaries, directors or officers is a party or by which they, or any of them,
are threatened. The only litigation in which EVB and its subsidiaries are
involved are collection suits involving delinquent loan accounts in the normal
course of business.
Item 2. Changes in Securities (not applicable)
Item 3. Defaults Upon Senior Securities (not applicable)
Item 4. Submission of Matters to a Vote of Security Holders (not applicable)
Item 5. Other Information (not applicable)
Item 6. Exhibits and Reports on Form 8-K
Exhibit No. Exhibit Name
- ----------- ------------
11 Statement re: Computation of Per Share Earnings - Included under
Part I, Item I, Note 4 of this Form 10-Q.
27 Financial Data Schedule - Included herein as Exhibit 27 on page 12
(b) No reports on Form 8-K were filed during the first quarter of 2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Eastern Virginia Bankshares, Inc.
__________________________
/s/ Thomas M. Boyd, Jr. President and Chief Executive Officer
__________________________
/s/ Thomas E. Stephenson Vice President, Chief Financial Officer
Date: April 27, 2000
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED
BALANCE SHEET AND CONSOLIDATED INCOME STATEMENT AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 12,353
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,799
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 42,598
<INVESTMENTS-CARRYING> 44,491
<INVESTMENTS-MARKET> 43,941
<LOANS> 282,561
<ALLOWANCE> 4,265
<TOTAL-ASSETS> 391,808
<DEPOSITS> 334,007
<SHORT-TERM> 5,000
<LIABILITIES-OTHER> 3,008
<LONG-TERM> 8,000
0
0
<COMMON> 9,874
<OTHER-SE> 31,919
<TOTAL-LIABILITIES-AND-EQUITY> 391,808
<INTEREST-LOAN> 6,074
<INTEREST-INVEST> 1,248
<INTEREST-OTHER> 33
<INTEREST-TOTAL> 7,355
<INTEREST-DEPOSIT> 3,112
<INTEREST-EXPENSE> 3,302
<INTEREST-INCOME-NET> 4,053
<LOAN-LOSSES> 132
<SECURITIES-GAINS> (5)
<EXPENSE-OTHER> 2,440
<INCOME-PRETAX> 1,971
<INCOME-PRE-EXTRAORDINARY> 1,971
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,487
<EPS-BASIC> 0.30
<EPS-DILUTED> 0.30
<YIELD-ACTUAL> 4.41
<LOANS-NON> 1,426
<LOANS-PAST> 763
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 1,225
<ALLOWANCE-OPEN> 4,154
<CHARGE-OFFS> 146
<RECOVERIES> 125
<ALLOWANCE-CLOSE> 4,265
<ALLOWANCE-DOMESTIC> 4,265
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
