Community bank earnings rise

Despite the uneven economic recovery, Washington area community banks, some more than others, recorded substantial growth in profits for the second quarter.

A decline in loan loss provisions bolstered income for most local players, including Washington Savings Bank of Bowie, Reston-based Access National Bank and McLean-based Capital One.

Sandy Spring Bank, which took in $8.3 million in net income, reported provisions of $1.2 million in the last quarter, compared to $6.1 million a year ago. The Olney-based bank, like many of its peers, has steadily reduced its troubled assets, which declined from $109.3 million in the second quarter of 2010 to $76.5 million this time around.

Loan growth played a significant role in the earnings of a number of other community banks, especially Bethesda-based EagleBank. It ended the quarter with a loan book of $1.95 billion, compared to $1.5 billion in 2010. The bank, with $2.3 billion in assets, posted $4.9 million in net income, or 24 cents per share, up 56 percent from a year ago.

Virginia Heritage Bank of Fairfax, with $521 million in assets, pulled in $1.2 million in net income in last quarter, compared to $624,000 a year earlier. Similar to EagleBank, it has been lending at a steady clip, growing its loan book to $395 million, an increase of $51 million from the same period a year earlier.

Notably, both Virginia Heritage and EagleBank recently received awards from the Small Business Lending Fund at a 1 percent dividend because of their healthy lending activity. Most community banks, however, continue to bemoan the dearth of loan demand from quality applicants.

Danielle Douglas covers the banking industry for The Washington Post.
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