Central Virginia Bankshares, Inc. (Nasdaq: CVBK) disclosed another significant improvement in third quarter 2009 core earnings when compared to the preceding second and first quarter's core earnings. The Central Virginia”s third quarter 2009 core after tax earnings were $571,368 compared to $395,060 in the second quarter and $248,732 in the first quarter 2009 and $942,656 in the third quarter of the prior year. Third quarter securities gains and losses net to a loss of $224,975, a non-cash other than temporary impairment "OTTI" write-down of four securities totaling $2,231,331. The net after tax effect of these items resulted in the Company's reporting a net loss of $1,050,669 for the third quarter 2009 compared to a net loss of $16,893,841 in the third quarter of 2008. At quarter end 2009, total shareholders' equity was $34.0 million, versus $12.8 million in the prior year. The book value of a share of common stock was $13.02 compared to $4.93 at third quarter 2008.
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R. Larry Lyons, President and CEO of Central Virginia Bankshares, Inc., commented: "We are living through an unprecedented period with the stress of the economic recession affecting everyone and financial institutions are no exception. It is unfortunate that we must report a loss, however we believe the future periods will show a continued improvement in our core earnings, which have more than doubled since the first quarter of this year. The core bank is profitable and is recovering from the effects of the FNMA and FHLMC write-off in the third and fourth quarters of last year. Despite having to report a loss, there were several positive factors in the third quarter. Compared to the second and first quarters of 2009, our core earnings show solid improvement; our net interest income and margin have both increased, and our non-interest expense has declined... If we disregard the after tax effect of the OTTI and securities losses, the Company would have had third quarter, net income of approximately $571,368 and net income available to common shareholders of $410,780." Mr. Lyons, commented: "...over our 36 year history, the past twelve months, by far, have been the most unprecedented economic conditions our Company has experienced and endured. Despite this, I remain encouraged by our third consecutive quarter of increasing core earnings. Our earnings continue to be adversely effected by OTTI, ("Other Than Temporary Impairment") on several of our securities due to the extraordinary stress the national economic environment has had on the banking industry, in addition to the need to increase our reserve for possible loan losses, which currently exceeds 1.61 percent of loans.
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