ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Friday, April 18, 1997 TAG: 9704180051
SECTION: BUSINESS PAGE: A-14 EDITION: METRO
SOURCE: MAG POFF THE ROANOKE TIMES
The company turned a profit in 1996's fourth quarter, sooner than its original goal of July 1997.
Valley Bank of Roanoke was the first among the Southeast's financial institutions chartered in the last three years to reach assets over $30 million.
And bank President Ellis L. Gutshall told shareholders Thursday it was one of only two banks nationwide chartered in the last three years to meet that goal, reaching it last June.
During the quarter that ended in March, Gutshall said at the annual meeting at Holiday Inn-Tanglewood, Valley Bank's assets grew to $58.4 million, up nearly $7 million or 13 percent since the end of 1996.
In that same period, deposits totaled $50.1 million, up 15 percent, and loans rose $3.9 million, up 12 percent, to $37.4 million.
Valley Bank, which opened in May 1995, achieved its second profitable quarter in the first three months of 1997.
Gutshall said it reached that mark despite expenses of $40,000 related to opening its third office, in South Roanoke. He said bank officials believed the long-term benefits of that new office outweighed "the short-term pain of additional expenses." He said the bank expects to open a fourth branch within two years.
He said net earnings amounted to $27,000, or 3 cents a share, for the quarter, compared with last year's first-quarter loss of $212,000, equal to 22 cents a share.
"The threshold to begin increasing shareholder value has been crossed, and we are well on our way," Gutshall said. He said the company turned profitable in last year's fourth quarter, sooner than its original goal of July 1997.
He said income earned by loan interest was just under $1 million in the first quarter, up from $26,000 in the same period last year. Net interest income nearly doubled to $473,000.
As Roanoke's locally owned community bank, Gutshall said, the loan customer base is heavily weighted toward operators of small businesses, professionals and area executives.
At the end of last year, he said, commercial and industrial customers made up 32 percent of the loan portfolio, representing $10.6 million of the $37.4 million in loans. He said 90 percent of Valley Bank's loan portfolio is for the purpose of investment in the valley.
The bank's deposits also reflect its niche, Gutshall told the shareholders.
At the end of last year, business checking and money market accounts totaled almost $8 million, or about 19 percent of total deposits.
"Valley Bank has chosen to pursue small to medium-size business relationships that have credit needs of less than $1 million," he said. "We feel that, when it comes to small business, it takes one to know one and it takes one to grow one.
"We have been very successful in the small business market area, and we will continue to pursue that target niche."
He projected the bank's assets would reach $72 million to $75 million by the end of 1997 and the bank will be profitable for the year.
In the professional and executive markets, he said, relationship products, customized lines of credit and biweekly mortgages have proven to be immensely popular.
Board member Lawrence Hamlar retired, citing age restrictions that are part of the company's bylaws.
LENGTH: Medium: 68 linesby CNB