ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, April 25, 1996 TAG: 9604250031
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
Valley Bank's first priority is to turn a profit as soon as possible, the bank's president, Guy W. Byrd Jr., told shareholders Wednesday.
He reported at the company's annual meeting that the bank made gains during the first quarter of this year, but still lost $211,904. A loss caused by start-up costs was projected prior to the bank's opening in May 1995.
It comes on top of a loss of $739,000 for last year when the bank had operated only 7 1/2 months.
"This is due to the pre-opening expenses associated with organizing the bank and to the fact that we opened two offices in the first four months," Byrd said. Most new banks start with just one location, he added.
But he said the bank and its parent, Valley Financial Corp., "have capital levels well in excess of regulatory minimums and the ability to support additional growth in the future."
He added, however, that the bank would not expand beyond two branches "until that can be done within the context of profitable operations. You have all seen other banks in Roanoke closing branches, and there are attractive opportunities available, but we will continue to operate with the two offices for the foreseeable future."
Byrd said 25 percent of the first quarter loss was due to provision of $54,000 as an additional reserve for loan losses. The total reserve, he said, is $191,000 or1 percent of the total loan portfolio.
The provision was made, Byrd said, even though "not a single loan customer has been 30 days past due on a loan payment. That's quite an accomplishment for any bank."
Since the end of last year, Byrd said, assets increased 25 percent to nearly $31 million. Deposits were up 38 percent to $22.3 million and loans increased 39 percent to $19.2 million.
Shareholders had equity in the bank of $7.8 million even after the losses.
LENGTH: Short : 41 linesby CNB