Income slips 15% for Heritage Bankshares

NORFOLK

Heritage Bankshares Inc. said its third-quarter net income fell 15 percent from the same period last year because of a large one-time gain that bolstered its earnings a year ago.

The Norfolk-based parent of Heritage Bank reported net income of $548,000 for the July-through-September period, down from $648,000 a year ago.

Excluding a $278,000 gain in the year-earlier quarter from the sale of securities, Heritage's pretax income of $847,000 for the latest quarter was 18 percent higher than its pretax income of $716,000 one year earlier, said Michael S. Ives, its president and CEO, in a statement.

Its earnings per diluted share fell 41 percent, to 13 cents in the recent quarter, from 22 cents in last year's third quarter because Heritage redeemed the remaining $7.8 million of preferred stock it had issued to the U.S. Treasury Department for capital from the federal Troubled Asset Relief Program.

Heritage's principal source of earnings, its net interest income was flat at $2.7 million. Income from fees and other non-interest sources fell 62 percent to $197,000 because such income for last year's third quarter included the $278,000 one-time gain on the sale of securities.

Heritage said its nonperforming assets at the end of September jumped to $1.75 million from $60,000 one year earlier partly because of a property taken during the recent quarter through foreclosure.

Its share price closed at $11.57, down 43 cents.

Tom Shean, (757) 446-2379, tom.shean@pilotonline.com