Not immune: VNB corporate profit falls 42 percent




The total profit downturn, from $4.03 million to $2.34 million, Rust says, stemmed primarily from lower "performance fees" at VNBTrust, the wholly-owned subsidiary providing investment advice to institutions and wealthy individuals, which enjoyed a stellar 2010.

"It's pretty hard to put record earnings back to back," says Rust. "Last year was record earnings, and this year was solid earnings."

One thing the bank lost late year was four members of its board when chairman Mark Giles led an exodus over what the bank termed a dispute over the board's "composition." Two remaining board members, Hunter Craig and Wick McNeely, have pledged their shares and, separately, in a controversial quest to obtain taxpayer money to fund an ill-fated land speculation of their own, sued the state. (Replaced on the bank board by William Dittmar, Giles retained his separate seat as chair of VNBTrust.)

In another component of the new report, the bank increased the amount of what bankers call OREO, Other Real Estate Owned, which jumped from $329,000 at the end of 2010 to $4.2 million at the end of 2011. Rust says the bank has plans to put those foreclosed properties on the market and calls both the bank's charge-off rate of .18 percent and its loan loss provision of 1.28 percent "very healthy."

Amid some private shareholder grumbling that the bank spends too much on overhead, Rust notes that such expenses fell over half a million dollars last year, even as cash donations to non-profits reached $323,000.

"We haven't backed off our charitable giving," says Rust. "It's the right thing to do."

Read more on: Virginia National Bank

1 comment

If foreclosed properties (OREO) jumped 13 times (130%!!), that would mean a huge jump in real estate loans gone bad. Loans are bank activities, not trust activities. So why is VNB-Trust, which happens to be headed by Mr. Giles who quit the bank's board over an argument with the present management, blamed for the 42% decline in profits? How can a bank suffer a 130 % increase in foreclosures and enjoy a 3% increase in profits from its banking (lending,deposits and fees) activities? Well, let's see: 3% x $1.94Million = $58.2K. Hmmm... Interesting number for an "increase" in bank profits. About the cost of a rookie loan officer for a year, or an experienced, commercial loan officer for half a year. Did Mr. Rust let anybody go in that salary range? Like maybe the poor, hapless loan officer or officers, who brought those bad loans to the Board for their approval? Is that where the profit increase came from? Is it really an increase in profits or a decrease in expenses? Wierd vibes coming out of that bank. Makes us question their spin.