Bank of Virginia Announces Fourth Quarter and Year End Results for 2008

• Press Release
• Source: Bank of Virginia
• On 5:30 pm EDT, Friday March 13, 2009

MIDLOTHIAN, Va., March 13, 2009 (GLOBE NEWSWIRE) -- Bank of Virginia (NasdaqCM:BOVA - News) (http://www.bankofva.com) reported financial results for the fourth quarter and year ended 2008. The net loss for the fourth quarter of 2008 was $1.4 million and diluted loss per common share of $0.46. The primary reason for the loss was Management's decision to significantly increase allowance for loan losses in light of the continued deterioration of the economy. The net loss for the year-end was $1.3 million and diluted loss per common share of $0.43.

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Symbol	Price	Change
BOVA	3.00	0.00

{"s" : "bova","k" : "c10,l10,p20,t10","o" : "","j" : ""}

As stated above, one of the major factors of the Bank's net loss for the fourth quarter and the year was the increased provision for loan loss. The voluntary contribution to the loan loss reserve resulted in the largest quarterly provision for loan losses ever recorded by the Bank in the amount of $1.5 million. Because of the steady downward trend of our economy, the Bank's management team made a decision to increase its loan loss reserve in the fourth quarter. Frank Bell, President and Chief Executive Officer noted, ``We are not immune to the effects of a slowing economy as 2008 proved to be one of the most difficult and unpredictable years in the history of the financial services industry.

The economic recession is negatively impacting all those in the financial sector; however as a local community bank, we did not participate in the unsound lending practices that have troubled many financial institutions during the past year.``

The provision for loan losses in the fourth quarter was $1.5 million as compared to $106 thousand in the prior quarter and $98 thousand in the fourth quarter of 2007. This results in a loan loss reserve to total loans of $2.9 million, which as a ratio to total loans is 1.89%, an increase from the prior quarter's ratio of approximately 1%.

Another significant factor in the quarter was continued compression of the net interest margin. The net interest margin was 2.89% during the quarter, which is one basis points less than the prior quarter and 51 basis points less than the fourth quarter of 2007. This contraction is driven by the rapid decline in interest rates quickly affecting asset yields while market rates on deposits decreased at a slower pace.

Although the Company did report a loss for the quarter and the year, the balance sheet showed growth driven by its loan portfolio. At year-end 2008, total assets equaled $203.7 million, up $19.7 million from December 31, 2007. Net loans increased from $130.8 million in 2007 to $153.0 million in 2008, representing a 17% increase for the year. Deposit balances grew steadily in support of loan demand and were $171.0 million at December 31, 2008 in comparison to $154.9 million at December 31, 2007, a 10.4% increase.

Frank Bell, President and Chief Executive Officer, said, ``I am very pleased with the dedication and hard work of our officers and staff during these challenging times. Our Company is not involved in the sub-prime market, so we are not directly experiencing any of the negative returns associated with that business. Our loan portfolio continues to perform well and the Bank continues to be ''well capitalized,`` the highest regulatory capital level.

In January 2009, Bank of Virginia marked its five-year anniversary of operations. Also noteworthy, on February 19, 2009, Bank of Virginia officially broke ground on a 3000-square-foot branch office in Chesterfield County, Virginia, which will be a relocation of an existing retail storefront branch. The expected date of opening is late Summer 2009. Management feels positive that with the existing shareholder and customer base that surrounds the office, it will prove to be a positive addition to Bank of Virginia. Mr. Bell said, ``I hope that the community will see our new full service branch as a demonstration of stability and our commitment to the community.''

Bank of Virginia operates five branch offices in Chesterfield County and Henrico County in Virginia. Bank of Virginia common stock is traded on the NASDAQ stock market under the quotation symbol ``BOVA.'' Additional investor-related information can be found on the Internet at http://www.bankofva.com.

DISCLAIMER

This news release may include forward-looking statements. These forward-looking statements are based on current expectations that involve risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may differ materially. These risks include: changes in business or other market conditions; the timely development, production and acceptance of new products and services; the challenge of managing asset/liability levels; the management of credit risk and interest rate risk; the difficulty of keeping expense growth at modest levels while increasing revenues; and other risks detailed from time to time in the Bank's periodic filings with the Board of Governors of the Federal Reserve System, including the Bank's annual report on Form 10-K as filed with the Board of Governors of the Federal Reserve. Pursuant to the Private Securities Litigation Reform Act of 1995, the Bank does not undertake to update forward-looking statements contained within this news release.

 BANK OF VIRGINIA
 Statements of Operations

                      Three Months Ended         Twelve Months Ended
                    ------------------------  ------------------------
                          December 31,              December 31,
                        2008        2007         2008         2007
                    -----------  -----------  -----------  -----------

 Interest
 Income:
 Interest and fees
  on loans          $ 2,596,383  $ 2,617,830  $10,220,810  $ 9,526,583
 Investment
  securities            505,034      461,257    2,141,546    1,494,000
 Interest on
  federal funds
  sold and
  deposits with
  banks                     826       88,821       65,115      359,886
                    -----------  -----------  -----------  -----------
   Total interest
    income            3,102,243    3,167,908   12,427,471   11,380,469
                    -----------  -----------  -----------  -----------


 Interest
 Expense:
 Interest on
  deposits            1,525,788    1,610,466    6,432,811    5,868,301
 Interest on fed
  funds purchased
  and FHLB
  borrowings            137,565      113,594      533,058      320,661
                    -----------  -----------  -----------  -----------
   Total interest
    expense           1,663,353    1,724,060    6,965,869    6,188,962
                    -----------  -----------  -----------  -----------
   Net interest
    income            1,438,890    1,443,848    5,461,602    5,191,507
 Provision for
  loan losses         1,515,500       98,365    1,764,325      345,534
                    -----------  -----------  -----------  -----------
   Net interest
    income after
    provision for
    loan losses         (76,610)   1,345,483    3,697,277    4,845,973
                    -----------  -----------  -----------  -----------


 Non-interest
 Income:
 Service charges on
  deposit accounts       38,405       37,603      206,456      121,619
   Net gain on
    available for
    sale securities      37,628       11,316      186,697       11,776
   Other fee income      40,551       25,413      140,318       86,057
                    -----------  -----------  -----------  -----------
       Total
        non-interest
        income          116,584       74,332      533,471      219,452
                    -----------  -----------  -----------  -----------


 Non-interest
 Expense:
 Salaries and
  employee benefits     769,468      743,955    3,110,236    2,709,305
 Occupancy expense      105,902       78,698      410,422      319,740
 Equipment expense       81,908       52,298      318,098      208,382
 Data processing        148,946       97,890      457,809      351,517
 Marketing expense        9,214       40,870      171,093      144,876
 Legal and
  professional fees      86,812       38,962      239,444      146,791
 Other operating
  expenses              237,092      273,199      838,241      678,318
                    -----------  -----------  -----------  -----------
   Total
    non-interest
    expense           1,439,342    1,325,872    5,545,343    4,558,929
                    -----------  -----------  -----------  -----------

   Net (Loss)
    income          $(1,399,368) $    93,943  $(1,314,595) $   506,496
                    ===========  ===========  ===========  ===========

 (Loss) Income per
  share, basic and
  diluted           $    (0.46)  $      0.03  $    (0.43) $      0.17
                    ===========  ===========  ===========  ===========
 Weighted Average
  Shares
  Outstanding:

   Basic              3,031,866    3,031,866    3,031,866    3,031,866
                    ===========  ===========  ===========  ===========

   Diluted            3,031,866    3,031,866    3,031,866    3,031,866
                    ===========  ===========  ===========  ===========
 At period end:

   Book value
    per share              5.38         5.94


   Market value
    per share              3.40         6.00

 BANK OF VIRGINIA
 Balance Sheets
                                          December 31,    December 31,
                                              2008            2007
                                            Audited         Audited
                                         -------------   -------------
 Assets
 Cash and due from banks                 $   2,608,500   $   4,183,359
 Federal funds sold and interest-bearing
  balances with banks                           42,194       4,771,376
                                         -------------   -------------
                                             2,650,694       8,954,735

 Securities available for sale, at
  fair market value                         41,008,725      37,641,272
 Loans, net of allowance for loan losses
  of $2,942,988 in 2008 and
  $1,276,726 in 2007                       152,962,046     130,805,447
 Premises and equipment, net                 5,688,585       5,532,009
 Accrued interest receivable                   864,630         857,853
 Other assets                                  537,239         217,311
                                         -------------   -------------

       Total assets                      $ 203,711,919   $ 184,008,627
                                         =============   =============

 Liabilities
 Deposits:
 Noninterest-bearing                     $  12,483,762   $  13,020,632
 Savings and interest-bearing demand        18,770,259      17,122,793
 Time, $100,000 and over                    55,939,332      46,155,151
 Other time                                 83,818,330      78,586,170
                                         -------------   -------------
       Total deposits                      171,011,683     154,884,746
 Accrued expenses and other liabilities      1,208,215       1,119,459
 FHLB borrowings and other indebtedness     15,176,000      10,000,000
                                         -------------   -------------
       Total liabilities                   187,395,898     166,004,205
                                         -------------   -------------

 Stockholders' Equity
 Preferred stock, $5 par value,
  5,000,000 shares authorized,
  none issued                                       --              --
 Common stock, $2.50 par value,
  40,000,000 shares authorized,
  3,031,866 shares issued and
  outstanding in 2008 and 2007,
  respectively                               7,579,665       7,579,665
 Additional paid-in capital                 14,705,508      14,693,218
 Retained deficit                          (5,913,941)     (4,599,347)
 Accumulated other comprehensive
  (loss) income                               (55,211)         330,886
                                         -------------   -------------
       Total stockholders' equity           16,316,021      18,004,422
                                         -------------   -------------

       Total liabilities and
        stockholders' equity             $ 203,711,919   $ 184,008,627
                                         =============   =============

 As of and for the Quarter Ended

                  Dec. 31,   Sept. 30,  June 30,  March 31,   Dec. 31,
                   2008       2008       2008       2008       2007
                 ---------  ---------  ---------  ---------  ---------

 Asset Quality
  Analysis:

 Allowance for
  loan losses:

 Beginning
  balance        1,525,551  1,419,977  1,389,977  1,276,726  1,178,361

   Provision     1,515,500    105,574     30,000    113,251     98,365

   Charge-offs    (98,063)         --         --         --         --

   Recoveries           --         --         --         --         --
                 ---------  ---------  ---------  ---------  ---------
    Net
     charge-
     offs         (98,063)         --         --         --         --
                 ---------  ---------  ---------  ---------  ---------

      Ending
       Balance   2,942,988  1,525,551  1,419,977  1,389,977  1,276,726
                 =========  =========  =========  =========  =========


 Nonperforming
  Assets:
 Nonaccrual
  loans            244,273         --         --         --         --

 Foreclosed
  real estate      308,019         --         --         --         --

 Repossessions          --         --         --         --         --

 Loans 90 days
  or more past
  due and
  still
  accruing         696,000         --         --         --         --
                 ---------  ---------  ---------  ---------  ---------

     Non-
      performing
       assets    1,248,292         --         --         --         --
                 =========  =========  =========  =========  =========

 Allowance for
  loan losses
  as a percent
  of loans           1.89%      1.00%      0.98%      0.97%      0.97%

          Bank of Virginia
          Kenneth P. Mulkey, Senior Vice-President & Chief 
           Financial Officer
          (804) 763-1333