CHARLOTTESVILLE, Va., April 17, 2008 (PRIME NEWSWIRE) -- Southern National Bancorp of Virginia Inc. (Nasdaq:SONA), the holding company for Sonabank, N. A., announced today that net income for the quarter ended March 31, 2008 was $501 thousand compared to $474 thousand during the quarter ended March 31, 2007. Income before taxes for the quarter ended March 31, 2008 was $677 thousand compared to $474 thousand during the quarter ended March 31, 2007 as we did not incur tax expense in the first quarter of 2007.
Net interest income was $2.9 million for the first quarter of 2008, compared to $2.5 million for the first quarter of 2007. Net interest income after provision for loan losses was $2.7 million for the first quarter of 2008, compared to $2.2 million for the first quarter of 2007. The net interest margin was 3.28% in the quarter ended March 31, 2008, compared to 3.75% in the quarter ended March 31, 2007. The decline in the net interest margin was largely attributable to the prime rate cuts of 200 basis points which accompanied the Fed's reductions in its Fed Funds target rate. Also contributing to the decline is the increased opportunity cost associated with owning bank owned life insurance (BOLI). The average outstanding BOLI balance was $12.9 million for the first quarter of 2008 compared to $2.1 million for the first quarter of 2007. We estimate that this reduced the net interest margin by 12 basis points during the first quarter of 2008 and 2 basis points during 2007.
Noninterest income was $346 thousand during the first quarter of 2008, compared to $141 thousand during the same quarter of 2007. 20% of the growth was accounted for by the growth in account maintenance and deposit service fees. Bank owned life insurance income increased during the first quarter of 2008 to $145 thousand compared to $24 thousand for the first quarter of 2007. Gain on other real estate owned in the first quarter of 2008 was $25 thousand while no such gain was recorded in the first quarter of 2007.
Noninterest expense was $2.4 million for the first quarter of 2008 compared to $1.9 million for the first quarter of 2007. The increase is due to write-downs of our Other Real Estate Owned (OREO) in the amount of $200 thousand, a full quarter of expenses for our Warrenton branch which opened in April 2007 and two months of expenses for our Leesburg branch which opened in February 2008.
Total assets of Southern National Bancorp of Virginia were $400.5 million as of March 31, 2008 up from $377.3 million as of December 31, 2007. Net loans receivable grew from $257.9 million at the end of 2007 to $271.2 million at March 31, 2008. Loan originations for the quarter ended March 31, 2008 totaled $21.3 million.
Southern National Bancorp of Virginia's allowance for loan losses was $3.9 million at March 31, 2008 compared to $3.5 million at December 31, 2007 and as a percentage of total loans at March 31, 2008 was 1.40%, up from 1.33% at the end of 2007.
The composition of our loan portfolio consists of the following at March 31, 2008 and December 31, 2007:
Nonperforming assets decreased from $4.0 million at December 31, 2007 to $3.8 million at March 31, 2008. We have internal loan review and a loan committee which provide on-going monitoring to identify and address issues with problem loans. We believe the allowance for loan losses is sufficient to cover probable incurred credit losses at March 31, 2008.
At the end of last quarter we reported that Sonabank had one residential property in OREO and two for which foreclosure was pending. The one property in OREO at year end has been sold at a small profit. One of the other properties has been foreclosed upon, and we are actively marketing the property. The foreclosure on the third property was delayed by a last minute bankruptcy filing on which the stay has been lifted.
The bulk of our OREO balance continues to be comprised of one property, which contains 33 finished 2 to 4 acre lots in Culpeper. We took a deed in lieu of foreclosure in June 2007. There are no new developments on that property. It is worth noting that those lots were originally under contract to a very large regional builder for $230,000 per lot. We have written them down to approximately 42% of that level based on new market data.
The Securities Portfolio
Investment securities, available for sale and held to maturity, were $76.1 million at March 31, 2008 compared to $75.0 million at December 31, 2007.
At March 31, 2008 the securities portfolio (held to maturity and available for sale) was comprised of the following:
Total deposits were up to $286.4 million at March 31, 2008 from $265.5 million at December 31, 2007. Noninterest-bearing deposits were up to $22.4 million at March 31, 2008 from $18.1 million at December 31, 2007.
Total stockholders' equity increased from $69.3 million as of December 31, 2007 to $69.6 million at March 31, 2008 as a result of the retention of earnings.
We opened branches at One East Market Street (in the more than 100 year old Bank of Loudoun building) and a drive through at 10 West Market Street about a block away. This brings Sonabank's total number of branches to eight. The Leesburg branches represent a major commitment for Sonabank in that the rent for the two facilities is significantly higher than in any other facility operated by Sonabank today. However, the Board of Directors of the company which was seeking to open a bank in this facility is now Sonabank's Leesburg/Loudoun County Advisory Board. It is a group of distinguished business people in Leesburg, very well connected to the community and dedicated to having a local bank committed to serving the small and middle market businesses in the Leesburg and the wider Loudoun County market. Last year, Loudoun County had the second highest median family income (to Fairfax County, Virginia) of any county in the U.S.
Chairman of Sonabank, Georgia Derrico commented: "This feels very much like a homecoming for us. Rod and I have had our primary residence just 23 miles from Leesburg for 25 years. Many years ago I was honored to serve as the Chairman of the Board of Trustees of Loudoun Hospital. Our old bank financed the reconstruction of George Marshall's home in Leesburg, Dodana Manor, and was a contributor to its endowment. We feel that we are already a part of this vibrant community and with our historic location hope to be even more so going forward."
Sonabank's other branches are located in Fairfax County (Reston, McLean and Fairfax) and in Charlottesville, Warrenton and Clifton Forge. All of our branches are in Virginia.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that relate to future events or the future performance of Southern National Bancorp of Virginia, Inc. Forward-looking statements are not guarantees of performance or results. These forward-looking statements are based on the current beliefs and expectations of the respective management of Southern National Bancorp and Sonabank and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond their respective control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed or implied in these forward-looking statements because of numerous possible uncertainties. Words like "may," "plan," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "will," and similar expressions, should be considered as identifying forward-looking statements, although other phrasing may be used. Such forward-looking statements involve risks and uncertainties and may not be realized due to a variety of factors. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q) filed by Southern National Bancorp. You should consider such factors and not place undue reliance on such forward-looking statements. No obligation is undertaken by Southern National Bancorp to update such forward-looking statements to reflect events or circumstances occurring after the issuance of this press release.
CONTACT: Southern National Bancorp Mr. Roderick Porter, President 202-464-1130 ext. 2406 Fax: 202-464-1134 www.sonabank.com