Hampton Roads Bankshares Announces Fourth Quarter and Full Year Financial Results

Hampton Roads Bankshares Announces Fourth Quarter and Full Year Financial
Results

   *Net loss available to common shareholders in the fourth quarter of $5.6
            million, a 74% improvement over the fourth quarter of 2011

     *Loans outstanding increased $15.3 million during the fourth quarter

  *Provision for loan loss expense in the quarter declined to $870 thousand,
                  a 94% decline over the fourth quarter of 2011

     *Nonperforming assets declined $28.5 million in the quarter and $66.2
                    million, or nearly 34%, for the full year

VIRGINIA BEACH, Va., Jan. 30, 2013 (GLOBE NEWSWIRE) -- Hampton Roads
Bankshares, Inc. (the "Company") (Nasdaq:HMPR), the holding company of The
Bank of Hampton Roads and Shore Bank, today announced financial results for
the fourth quarter and full year of 2012. The Company reported a net loss
available to common shareholders of $5.6 million for the quarter, compared to
a net loss available to common shareholders of $21.4 million for the fourth
quarter of 2011 and a net loss available to common shareholders of $5.9
million in the third quarter of 2012. For the full year 2012, the Company
reported a net loss available to common shareholders of $25.1 million, a $73.5
million reduction from a net loss available to common shareholders of $98.6
million for 2011.

"2012 was an important year for us and I am proud of the progress we have
made," said Doug Glenn, President and Chief Executive Officer. "The trends
continue to move in a positive direction and our bankers are actively engaged
in meeting the needs of our local communities."

Net interest income for the fourth quarter of 2012 was $16.3 million, compared
to $17.5 million in the fourth quarter of 2011 and up from the $15.8 million
of net interest income in the third quarter of 2012.Net interest margin was
3.62% in the fourth quarter compared to 3.58% in the fourth quarter of last
year and 3.55% in the third quarter of 2012.Net interest income for the full
year 2012 was $65.0 million compared to $71.5 million in 2011 due to declines
in average interest earning assets year over year.However, net interest
margin improved from 3.23% in 2011 to 3.62% in 2012 because of the positive
impact to yields from a shift in the mix of earning assets and declines in
funding costs during the year.

Provision for loan loss expense for the fourth quarter was $0.9 million, down
sharply from the $14.1 million of provision for loan loss expense in the
fourth quarter of 2011 and also down from $2.5 million in the third quarter of
2012.Provision for loan loss expense for the full year 2012 was $15.0
million, down significantly from the $67.9 million of provision for loan loss
expense in 2011.In addition, the Company reported that its nonperforming
assets declined to $130.7 million at December 31, 2012, a decline of $28.5
million from September 30, 2012, marking the ninth straight quarterly decline
in nonperforming assets.Nonperforming assets declined $66.5 million, or
nearly 34%, during the full year 2012.Nonperforming assets represented 6.36%,
7.68% and 9.08% of total assets at December 31, 2012, September 30, 2012, and
December 31, 2011, respectively.

Noninterest income was $0.4 million during the fourth quarter of 2012 compared
to $(1.1) million in the fourth quarter of 2011 and $2.2 million during the
third quarter of 2012.Noninterest income continued to be impacted by losses
and impairments on foreclosed real estate, which totaled $8.3 million in the
fourth quarter of 2012.Mortgage revenue increased during the quarter to $6.1
million as origination volume continued to be positively impacted by the
continued low interest rate environment.Noninterest income for the full year
2012 was $7.7 million compared to $4.2 million in 2011, due primarily to the
increase in mortgage banking revenues.

Noninterest expense was $22.4 million during the fourth quarter, compared to
$23.4 million in the fourth quarter of 2011 and $20.4 million in the third
quarter of 2012.Higher salary and benefit expense in our mortgage operations
to meet higher loan demand and increases in costs associated with the ongoing
management and collection of the Company's portfolio of nonperforming assets
contributed to the increase from the third quarter.Noninterest expenses for
the full year were $81.4 million in 2012 compared to $103.7 million in 2011,
as the Company's operating expenses benefitted from lower FDIC assessments,
fewer branches, lower IT costs due to system conversions, and reductions in
personnel.

During the fourth quarter, the Company recognized $2.2 million of a tax
benefit from the final resolution of certain Internal Revenue Service
examination issues related to the amendment of previous tax returns.The
Company continues to maintain a valuation allowance against all of its net
deferred tax assets.

As of December 31, 2012, total assets were $2.05 billion, down slightly from
$2.07 billion at September 30, 2012.During the fourth quarter, loans
outstanding increased from $1.42 billion to $1.43 billion as a result of new
origination activity and the acquisition of a $40 million consumer loan
portfolio, offset by continued resolutions of problem loans.Total deposits
declined during the quarter to $1.62 billion from $1.63 billion at September
30, 2012 as the Company saw an increase in non-interest bearing deposits
offset by continued declines in time deposits. Total assets, loans and
deposits at December 31, 2011 were $2.2 billion, $1.5 billion and $1.8
billion, respectively.

At December 31, 2012, the Company exceeded all of the regulatory capital
minimums and Bank of Hampton Roads and Shore Bank were both considered "well
capitalized" under the risk-based capital standards.

Caution About Forward-Looking Statements

Certain statements made in this press release may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995.Forward-looking statements are statements that include projections,
predictions, expectations, or beliefs about events or results or otherwise are
not statements of historical facts, including statements about future
trends.Although the Company believes that its expectations with respect to
such forward-looking statements are based upon reasonable assumptions within
the bounds of its existing knowledge of its business and operations, there can
be no assurance that actual results, performance or achievements of the
Company will not differ materially from those expressed or implied by such
forward-looking statements.Factors that could cause actual events or results
to differ significantly from those described in the forward-looking statements
include, but are not limited to those described in the cautionary language
included under the headings "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2011,
Quarterly Report on Form 10-Q for the quarter ended September 30, 2012and
other filings made with the SEC.

About Hampton Roads Bankshares

Hampton Roads Bankshares, Inc. is a bank holding company headquartered in
Virginia Beach, Virginia.The Company's primary subsidiaries are The Bank of
Hampton Roads, which opened for business in 1987, and Shore Bank, which opened
in 1961 (collectively, the "Banks"). The Banks engage in general community
and commercial banking business, targeting the needs of individuals and small
to medium-sized businesses. Currently, The Bank of Hampton Roads operates 33
banking offices in Virginia and North Carolina doing business as Bank of
Hampton Roads and Gateway Bank & Trust Co. Shore Bank serves the Eastern
Shore of Maryland and Virginia through seven banking offices and two loan
production offices in West Ocean City, Maryland and Rehoboth Beach, Delaware.
Through various affiliates, the Banks also offer mortgage banking services and
investment products.Shares of the Company's common stock are traded on the
NASDAQ Global Select Market under the symbol "HMPR."Additional information
about the Company and its subsidiaries can be found at
www.hamptonroadsbanksharesinc.com.

Use of Non-GAAP Financial Measures

This earnings press release contains GAAP financial measures and non-GAAP
financial measures where management believes it to be helpful in understanding
our results of operations or financial position.Where non-GAAP financial
measures are used, the comparable GAAP financial measure, as well as the
reconciliation to the comparable GAAP financial measure, can be found in the
Form 8-K filed related to this release.The Form 8-K can be found on the SEC's
EDGAR website at www.sec.gov or our website at
www.hamptonroadsbanksharesinc.com.

                                                               
                                                               
                                                               
Hampton Roads Bankshares, Inc.                                  
Financial Highlights                                            
Unaudited                                                       
(in thousands, except per share data)                           
                                                               
                                                               
Operating Results                       Q4 2012      Q3 2012      Q4 2011
                                                               
Interest income                         $20,093    $19,933    $22,875
Interest expense                        3,804       4,096       5,420
Net interest income                     16,289       15,837       17,455
Provision for loan losses               870         2,476       14,117
Noninterest income                      366         2,200       (1,127)
Noninterest expense                     22,356      20,394      23,393
Income tax benefit                      (2,182)     --          --
Net loss                                (4,389)     (4,833)     (21,182)
Noncontrolling Interest                 1,210       1,088       230
Net loss attributable to Hampton Roads  $(5,599)   $(5,921)   $(21,412)
Bankshares, Inc.
                                                               
                                                               
Per Share Data                                                  
                                                               
Loss per share:                                                 
Basic                                   $(0.03)    $(0.05)    $(0.62)
Diluted                                 (0.03)      (0.05)      (0.62)
Common dividends declared               --         --         --
Book value per common share             1.08        1.10        3.29
Book value per common share - tangible  1.07        1.09        3.18
                                                               
                                                               
Balance Sheet at Period-End                                     
                                                               
Total assets                            $2,054,092 $2,071,433 $2,166,860
Gross loans                             1,432,275   1,416,933   1,504,733
Allowance for loan losses               48,382      54,444      74,947
Total investment securities             294,521     311,104     304,527
Intangible assets                       2,410       2,745       3,751
Total deposits                          1,617,774   1,630,943   1,798,034
Total borrowings                        236,062     236,183     236,558
Shareholders' equity                    184,723     187,960     113,668
Shareholders' equity - tangible         182,313     185,215     109,917
Common shareholders' equity             184,723     187,960     113,668
Common shareholders' equity - tangible  182,313     185,215     109,917
                                                               
                                                               
Daily Averages                                                  
                                                               
Total assets                            $2,057,454 $2,054,380 $2,270,707
Gross loans                             1,399,480   1,422,909   1,577,877
Total investment securities             314,924     322,306     306,454
Intangible assets                       2,560       2,907       3,955
Total deposits                          1,615,975   1,651,972   1,880,808
Total borrowings                        236,112     236,238     236,541
Shareholders' equity                    187,592     149,019     131,991
Shareholders' equity - tangible         185,032     146,112     128,036
Common shareholders' equity             187,592     149,019     131,991
Common shareholders' equity - tangible  185,032     146,112     128,036
Interest-earning assets                 1,787,472   1,770,564   1,934,073
Interest-bearing liabilities            1,601,172   1,639,320   1,878,916
                                                               
                                                               
Financial Ratios                                                
                                                               
Return on average assets                -1.08%       -1.15%       -3.74%
Return on average common equity         -11.87%      -15.81%      -64.36%
Return on average common equity -       -12.04%      -16.12%      -66.35%
tangible
Net interest margin                     3.62%        3.55%        3.58%
Efficiency ratio                        135.43%      114.45%      143.86%
Tangible common equity to tangible      8.89%        8.95%        5.08%
assets
                                                               
                                                               
Allowance for Loan Losses                                       
                                                               
Beginning balance                       $54,444    $62,907    $83,036
Provision for losses                    870         2,476       14,117
Charge-offs                             (9,619)     (13,281)    (24,690)
Recoveries                              2,687       2,342       2,484
Ending balance                          $48,382    $54,444    $74,947
                                                               
                                                               
Nonperforming Assets at Period-End                              
                                                               
Nonaccrual loans including nonaccrual   $97,411    $115,093   $133,161
impaired loans
Loans 90 days past due and still        1,024       --          84
accruing interest
Repossessed assets                      32,215      44,061      63,613
Total nonperforming assets              $130,650   $159,154   $196,858
                                                               
                                                               
Asset Quality Ratios                                            
                                                               
Annualized net (chargeoffs) recoveries  -1.97%       -3.06%       -5.58%
to average loans
Nonperforming loans to total loans      6.87%        8.12%        8.86%
Nonperforming assets to total assets    6.36%        7.68%        9.08%
Allowance for loan losses to total      3.38%        3.84%        4.98%
loans
                                                               
                                                               
Composition of Loan Portfolio at                                
Period-End
                                                               
Commercial                              $267,080   $247,125   $256,058
Construction                            206,391     233,194     284,984
Real-estate commercial                  530,042     532,884     522,052
Real-estate residential                 372,591     379,558     414,957
Installment                             56,302      24,302      26,525
Deferred loan fees and related costs    (131)       (130)       157
Total loans                             $1,432,275 $1,416,933 $1,504,733

                                                           
                                                           
                                                           
Hampton Roads Bankshares, Inc.                              
Financial Highlights                                        
Unaudited                                                   
(in thousands, except per share data)                       
                                                           
                                          Twelve months ended
Operating Results                          December 31, 2012 December 31, 2011
                                                           
Interest income                            $82,302         $100,791
Interest expense                           17,278           29,324
Net interest income                        65,024            71,467
Provision for loan losses                  14,994           67,850
Noninterest income                         7,667            4,210
Noninterest expense                        81,427           103,676
Income tax expense (benefit)               (2,182)          2,153
Net loss                                   (21,548)         (98,002)
Noncontrolling interest                    3,543            612
Net loss attributable to Hampton Roads     $(25,091)       $(98,614)
Bankshares, Inc.
                                                           
                                                           
Per Share Data                                              
                                                           
Loss per share:                                             
Basic                                      $(0.29)         $(2.90)
Diluted                                    (0.29)           (2.90)
Common dividends declared                  --              --
Book value per common share                1.08             3.29
Book value per common share - tangible     1.07             3.18
                                                           
Daily Averages                                              
                                                           
Total assets                               $2,090,167      $2,557,877
Gross loans                                1,438,508        1,731,851
Total investment securities                317,866          337,239
Intangible assets                          3,065            8,137
Total deposits                             1,695,673        2,128,648
Total borrowings                           236,306          249,156
Shareholders' equity                       139,862          157,408
Shareholders' equity - tangible            136,797          149,271
Common shareholders' equity                139,862          157,408
Common shareholders' equity - tangible     136,797          149,271
Interest-earning assets                    1,798,660        2,209,541
Interest-bearing liabilities               1,693,584        2,145,338
                                                           
Financial Ratios                                            
                                                           
Return on average assets                   -1.20%            -3.86%
Return on average common equity            -17.94%           -62.65%
Return on average common equity - tangible -18.34%           -66.06%
Net interest margin                        3.62%             3.23%
Efficiency ratio                           112.99%           142.13%
Tangible common equity to tangible assets  8.89%             5.08%
                                                           
                                                           
Allowance for Loan Losses                                   
                                                           
Beginning balance                          $74,947         $157,253
Provision for losses                       14,994           67,850
Charge-offs                                (50,552)         (156,590)
Recoveries                                 8,993            6,434
Ending balance                             $48,382         $74,947
                                                           
                                                           
Asset Quality Ratios                                        
                                                           
Annualized net (chargeoffs) recoveries to  -2.89%            -8.67%
average loans
Nonperforming loans to total loans         6.87%             8.86%
Nonperforming assets to total assets       6.36%             9.08%
Allowance for loan losses to total loans   3.38%             4.98%

CONTACT: Stephen P. Theobald
         Executive Vice President, Chief Financial Officer
         (757) 217-1000
 
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