Hampton Roads Bankshares Announces Third Quarter Financial Results

Hampton Roads Bankshares Announces Third Quarter Financial Results

  *Third quarter net income available to common shareholders totaled $2.8
    million
  *Year-to-date earnings totaled $3.5 million, a $23.0 million increase over
    the comparable period in 2012
  *Average core deposits grew $21.2 million during the third quarter
  *Non-performing assets declined to 4.39% of total assets from 7.68% over
    past 12 months

VIRGINIA BEACH, Va., Nov. 7, 2013 (GLOBE NEWSWIRE) -- Hampton Roads
Bankshares, Inc. (the "Company") (Nasdaq:HMPR), the holding company for the
Bank of Hampton Roads and Shore Bank, today announced financial results for
the third quarter of 2013. Net income available to common shareholders was
$2.8 million for the three months ended September 30, 2013, compared to $0.1
million for the second quarter of 2013 and a net loss available to common
shareholders of $5.9 million for the third quarter of 2012. On a year-to-date
basis, net income available to common shareholders totaled $3.5 million in
2013, compared to a net loss available to common shareholders of $19.5 million
for the comparable period in 2012.

"I am pleased with the Company's performance in the third quarter," said
Douglas Glenn, President and Chief Executive Officer. "We are focused on
ensuring that our business model meets the needs of our customers in an
evolving banking environment and on continuing to position our Company for
future growth through the implementation of our One Bank Strategy. This
quarter represents yet another building block in our long-term foundation."

Net Interest Income

Net interest income for the three and nine months ended September 30, 2013 was
$15.8 million and $47.8 million, respectively, a decrease of $37 thousand and
$910 thousand, respectively, for the same periods ended September 30, 2012.
The decrease in net interest income for the nine months ended September 30,
2013 was due to decreases in average interest-earning assets and the yields
received on these assets, partially offset by an increase in net interest
margin which benefited from a lower cost of funding due to re-pricing of
deposits and a change in the composition of interest bearing liabilities. Net
interest margin, as calculated using our new method that now includes the
impact of nonaccrual loans, increased to 3.42% and 3.44% for the three and
nine months ended September 30, 2013, respectively from 3.35% and 3.38% for
the three and nine months ended September 30, 2012.

Credit Quality

The Company's ratio of non-performing assets to total assets decreased to
4.39% at September 30, 2013 from 4.81% at June 30, 2013. On a year over year
basis, the ratio of non-performing assets to total assets declined by 43%.
Total past due loans which continue to accrue interest decreased to $4.8
million, or 0.35% of total loans outstanding, at September 30, 2013 from $6.2
million, or 0.44% of total loans outstanding, at June 30, 2013.

As a result of the Company's quarterly analysis of the adequacy of the
allowance for loan losses, the Company did not record a provision for loan
losses in the third quarter of 2013, compared to a provision of $2.5 million
for the comparable period in 2012 and $1.0 million for the second quarter of
2013. Provision for loan losses totaled $1.0 million for the nine months ended
September 30, 2013 compared to $14.1 million for the comparable period in
2012. During the third quarter of 2013, the Company recovered $1.9 million
from loans that had previously been charged-off, which increased the allowance
for loan losses at September 30, 2013.

Noninterest Income

Noninterest income for the three and nine months ended September 30, 2013 was
$7.9 million and $20.9 million, respectively, a 259% and 186% increase over
the comparative periods in 2012. This was largely due to a decline in losses
on other real estate owned and repossessed assets. Mortgage revenue decreased
during the third quarter of 2013 compared to the same period in 2012 due to
declines in both origination volume and margin. For the nine months ended
September 30, 2013 mortgage revenue remained comparable to the corresponding
period in 2012.

Income from bank-owned life insurance increased $1.8 million to $2.2 million
and $3.0 million for the three and nine month periods ended September 30,
2013, respectively, compared to $399 thousand and $1.3 million for the
comparative periods in 2012, largely due to a $1.8 million life insurance
benefit recognized during the third quarter of 2013.

Noninterest Expense

Noninterest expense was $20.8 million and $62.4 million for the three and nine
months ended September 30, 2013, respectively, which was an increase of $396
thousand and $3.3 million over the comparable periods in 2012. The 2013 year
to date increase is primarily due to higher expenses related to salary and
employee benefits and occupancy, partially offset by a decrease in problem
loan and repossessed asset costs.

Occupancy expense increased $844 thousand and $1.6 million for the three and
nine months ended September 30, 2013, respectively, compared to the same
periods in 2012 due to accelerated amortization of leasehold improvements at a
closed branch and the accrual needed as a result of our decision to cease
using a portion of the leased space in Dominion Tower after moving the
Company's headquarters to Virginia Beach, Virginia.

Balance Sheet Trends

Total assets were $2.0 billion at September 30, 2013.Total assets decreased
by $68.7 million or 3% from $2.1 billion at December 31, 2012.The decrease in
assets was primarily associated with a $54.4 million or 65% decrease in loans
held for sale, which can vary each month based on the timing of loan closings
and subsequent loan sales to third party investors.

Gross loans decreased by $61.5 million or 4% during the nine months ended
September 30, 2013, primarily through reductions in non-performing loans (both
payoffs and charge-offs).The majority of the recent loan demand within our
markets has come from the real estate - commercial mortgage category.Due to
relatively soft loan demand in several loan categories, the majority of cash
received from normal principal amortization and loan payoffs was reinvested in
overnight funds sold and due from the Federal Reserve Bank, which increased
$25.6 million or 31% from December 31, 2012, and in investment securities
available for sale, which increased $19.1 million or 7% from December 31,
2012.

Deposits decreased $58.4 million or 4% from December 31, 2012 as a result of
decreases of $56.8 million in time deposits under $100 thousand and $72.2
million in time deposits over $100 thousand, partially offset by increases of
$14.5 million in noninterest-bearing demand deposits, $49.8 million in
interest-bearing demand deposits, and $6.4 million in interest-bearing savings
deposits.Decline in time deposits is a result of the Company's efforts to
improve both the average cost and mix of funds.Average core deposits, which
exclude brokered deposits and certificates of deposit greater than $100,000,
increased by $21.2 million during the third quarter of 2013 to $1.2 billion as
a result of successful marketing campaigns.

Capitalization

At September 30, 2013, the Company exceeded all of the regulatory capital
minimums and Bank of Hampton Roads and Shore Bank were both considered "well
capitalized" under all applicable regulatory capital standards.The Company's
total risk-based capital, Tier 1 and Tier 1 leverage ratios as of September
30, 2013, were 14.80%, 13.54% and 10.56%, respectively.

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
and strategies.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, 2012, Quarterly Report on Form 10-Q for the quarter ended
June 30, 2013, and 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
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 Virginia, eastern Maryland and southern Delaware through seven
banking offices, ATMs and 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.

Hampton Roads Bankshares, Inc.                                 
Financial Highlights                                           
(in thousands)                                                 
(unaudited)                          September 30, June 30, 2013 September 30,
                                     2013                        2012
Assets:                                                        
Cash and due from banks              $16,251     $16,783     $15,316
Interest-bearing deposits in other   662          648          694
banks
Overnight funds sold and due from    109,396      107,339      119,242
Federal Reserve Bank
Investment securities available for  295,626      278,386      293,335
sale, at fair value
Restricted equity securities, at     17,234       17,351       17,769
cost
                                                              
Loans held for sale                  29,633       51,369       60,360
                                                              
Loans                                1,370,728    1,400,250    1,416,933
Allowance for loan losses            (37,701)     (38,234)     (54,444)
Net loans                            1,333,027    1,362,016    1,362,489
Premises and equipment, net          69,634       69,925       78,975
Interest receivable                  4,862        5,003        5,589
Other real estate owned and
repossessed assets, net of valuation 39,196       32,906       44,061
allowance
Intangible assets, net               1,585        1,741        2,745
Bank-owned life insurance            56,216       54,006       52,840
Other assets                         12,098       11,465       18,018
Totals assets                        $1,985,420  $2,008,938  $2,071,433
Liabilities and Shareholders'                                  
Equity:
Deposits:                                                      
Noninterest-bearing demand           277,731      268,372      252,093
Interest-bearing:                                              
Demand                               569,608      575,615      527,214
Savings                              66,297       66,751       60,610
Time deposits:                                                 
Less than $100                       336,753      341,193      402,457
$100 or more                         309,010      324,466      388,569
Total deposits                       1,559,399    1,576,397    1,630,943
Federal Home Loan Bank borrowings    194,399      194,619      195,280
Other borrowings                     28,882       38,760       38,457
Interest payable                     5,670        5,493        4,590
Other liabilities                    12,075       11,988       11,757
Total liabilities                    1,800,425    1,827,257    1,881,027
Shareholders' equity:                                          
Common stock                         1,703        1,703        1,703
Capital surplus                      587,088      586,745      582,644
Retained deficit                     (405,415)    (408,219)    (403,342)
Accumulated other comprehensive      1,109        1,028        8,301
income, net of tax
Total shareholders' equity before    184,485      181,257      189,306
non-controlling interest
Non-controlling interest             510          424          1,100
Total shareholders' equity           184,995      181,681      190,406
Total liabilities and shareholders'  $1,985,420  $2,008,938  $2,071,433
equity
                                                              
                                                              
Non-performing Assets at Period-End:                           
Nonaccrual loans including           $47,604     $63,739     $115,093
nonaccrual impaired loans
Loans 90 days past due and still     320          --           --
accruing interest
Other real estate owned and          39,196       32,906       44,061
repossessed assets
Total non-performing assets          $87,120     $96,645     $159,154
                                                              
Composition of Loan Portfolio at                               
Period-End:
Commercial                           $218,504    $239,293    $247,125
Construction                         171,683      183,513      233,194
Real-estate commercial               569,325      560,235      532,884
Real-estate residential              356,998      355,568      379,558
Installment                         55,759       62,680       24,302
Deferred loan fees and related costs (1,541)      (1,039)      (130)
Total loans                          $1,370,728  $1,400,250  $1,416,933

                                                                
                                                                
Hampton Roads                                                    
Bankshares, Inc.
Financial                                                        
Highlights
(in thousands,
except share and Three Months Ended                    Nine Months Ended
per share data)
(unaudited)      September    June 30,     September    September    September
                 30, 2013     2013         30, 2012     30, 2013     30, 2012
Interest Income:                                                 
Loans, including $17,122    $17,687    $17,904    $52,482    $56,026
fees
Investment       1,831       1,839       1,986       5,485       5,992
securities
Overnight funds
sold and due     70          63          43          175         189
from FRB
Interest-bearing
deposits in      1           --          --          1           1
other banks
Total interest   19,024      19,589      19,933      58,143      62,208
income
Interest                                                         
Expense:
Deposits:                                                        
Demand           523         558         549         1,590       1,499
Savings          9           9           19          28          61
Time deposits:                                                   
Less than $100   851         921         1,168       2,772       4,145
$100 or more     837         935         1,187       2,780       4,210
Interest on     2,220       2,423       2,923       7,170       9,915
deposits
Federal Home
Loan Bank        477         479         562         1,442       1,728
borrowings
Other borrowings 527         592         611         1,706       1,830
Total interest   3,224       3,494       4,096       10,318      13,473
expense
Net interest     15,800      16,095      15,837      47,825      48,735
income
Provision for    --          1,000       2,476       1,000       14,124
loan losses
Net interest
income after     15,800      15,095      13,361      46,825      34,611
provision for
loan losses
Noninterest                                                      
Income:
Mortgage banking 3,139       4,250       5,186       13,353      12,299
revenue
Service charges
on deposit       1,264       1,300       1,276       3,781       3,883
accounts
Income from
bank-owned life  2,210       434         399         3,017       1,261
insurance
Gain (loss) on
sale of premises 243         7           --          123         (47)
and equipment
Impairment of
premises and     --          --          --          (2,825)     --
equipment
Losses on other
real estate
owned and        (378)       (774)       (6,445)     (2,056)     (14,357)
repossessed
assets
Gain on sale of
investment
securities       --          763         218         763         479
available for
sale
Visa check card  649         662         624         1,907       1,782
income
Other            775         942         942         2,851       2,001
Total
noninterest      7,902       7,584       2,200       20,914      7,301
income
Noninterest                                                      
Expense:
Salaries and
employee         9,946       10,951      10,117      31,853      28,973
benefits
Occupancy        2,772       2,517       1,928       7,091       5,483
FDIC insurance   927         878         1,129       2,823       3,530
Professional and 1,693       1,639       1,514       4,225       4,852
consultant fees
Data processing  1,097       1,129       970         3,023       2,986
Problem loan and
repossessed      723         530         1,245       1,733       2,761
asset costs
Equipment        386         491         667         1,341       2,101
Other            3,246       4,058       2,824       10,326      8,386
Total
noninterest      20,790      22,193      20,394      62,415      59,072
expense
Income (loss)
before provision 2,912       486         (4,833)     5,324       (17,160)
for income taxes
Provision for    22          135         --          157         --
income taxes
Net income       2,890       351         (4,833)     5,167       (17,160)
(loss)
Net income
attributable to  86          262         1,088       1,642       2,333
non-controlling
interest
Net income
(loss)
attributable to  $2,804     $89        $(5,921)   $3,525     $(19,493)
Hampton Roads
Bankshares, Inc.
                                                                
Per Share:                                                       
Cash dividends   $--       $--       $--       $--       $--
declared
Basic Income     $0.02      $--       $(0.05)    $0.02      $(0.32)
(loss)
Diluted Income   $0.02      $--       $(0.05)    $0.02      $(0.32)
(loss)
Basic weighted
average shares   170,388,263 170,391,127 108,785,717 170,389,513 60,349,261
outstanding
Effect of
dilutive shares  2,067,958   1,247,524   --          2,025,830   --
and warrant
Diluted weighted
average shares   172,456,221 171,638,651 108,785,717 172,415,343 60,349,261
outstanding
                                                                
Daily Averages:                                                  
Total assets     $1,995,473 $2,027,560 $2,054,380 $2,017,966 $2,100,016
Gross loans
(excludes loans  1,375,985   1,415,524   1,416,959   1,406,063   1,450,475
held for sale)
Investments      299,411     298,100     322,306     300,470     318,853
Intangible       1,659       1,903       2,907       1,930       3,234
assets
Total deposits   1,569,781   1,590,107   1,651,972   1,584,826   1,722,432
Total borrowings 226,666     233,437     233,792     231,195     233,925
Shareholders'    180,994     187,406     150,882     185,030     124,715
equity *
Shareholders'
equity -         179,335     185,503     147,975     183,100     121,481
tangible *
Interest-earning 1,835,211   1,874,902   1,878,073   1,861,476   1,928,799
assets
Interest-bearing 1,525,821   1,574,222   1,636,874   1,563,151   1,722,166
liabilities
                                                                
Financial                                                        
Ratios:
Return on        0.56%        0.02%        -1.15%       0.23%        -1.24%
average assets
Return on        6.15%        0.19%        -15.61%      2.55%        -20.88%
average equity *
Return on
average equity - 6.20%        0.19%        -15.92%      2.57%        -21.43%
tangible *
Net interest     3.42%        3.44%        3.35%        3.44%        3.38%
margin
Efficiency ratio 87.71%       96.84%       114.45%      88.16%       106.33%
Tangible equity
to tangible      9.22%        8.94%        9.02%        9.22%        9.02%
assets *
                                                                
Allowance for                                                    
Loan Losses:
Beginning        $38,234    $43,709    $62,907    $48,382    $74,947
balance
Provision       --          1,000       2,476       1,000       14,124
Charge-offs      (2,443)     (8,501)     (13,281)    (16,966)    (40,933)
Recoveries       1,910       2,026       2,342       5,285       6,306
Ending balance   $37,701    $38,234    $54,444    $37,701    $54,444
                                                                
Asset Quality                                                    
Ratios:
Annualized net
chargeoffs to    -0.15%       -1.83%       -3.06%       -1.11%       -3.19%
average loans
Nonperforming
loans to total   3.50%        4.55%        8.12%        3.50%        8.12%
loans
Nonperforming
assets to total  4.39%        4.81%        7.68%        4.39%        7.68%
assets
Allowance for
loan losses to   2.75%        2.73%        3.84%        2.75%        3.84%
total loans
                                                                
* Equity amounts exclude non-controlling interest

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.

Non-GAAP Measurement                                           
September 30, 2013                                             
                                    As of         As of         As of
                                    September 30, June 30, 2013 September 30,
                                     2013                        2012
                                                              
Total assets                         $1,985,420  $2,008,938  $2,071,433
Less:intangible assets              1,585        1,741        2,745
Tangible assets                      $1,983,835  $2,007,197  $2,068,688
                                                              
Total shareholders' equity *         $184,485    $181,257    $189,306
Less:intangible assets              1,585        1,741        2,745
Common shareholders' equity -        $182,900    $179,516    $186,561
tangible *
                                                              
Tangible common equity to tangible   9.22%         8.94%         9.02%
assets *
                                                              
Total common shareholders' equity to 9.29%         9.02%         9.14%
total assets *
                                                              
* Equity amounts exclude non-controlling interest

CONTACT: Douglas J. Glenn
         President and Chief Executive Officer
         (757) 217-1000
 
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