Hampton Roads in Virginia Reports Higher Profit on Lower Foreclosure Costs

Hampton Roads Bankshares (HMPR) in Virginia Beach, Va., made big gains in the third quarter because of lower costs tied to foreclosed properties and repossessed assets.

The $2 billion-asset company earned $2.8 million in the third quarter, compared to a $5.9 million loss a year earlier.

Noninterest income spiked more than doubled from a year earlier, to $7.9 million. The company attributed the increase to major declines in losses on other real estate owned and repossessions.

Net interest income was relatively flat from a year earlier, to $15.8 million, as a slight dip in revenue from loans and investment securities offset lower interest expenses. The company's net interest margin widened by 7 basis points from a year earlier, to 3.42%.

Noninterest expense rose 2% from a year earlier, to $20.8 million, because of higher expenses tied to salary and employee benefits and property costs.

Steadily improving credit quality let Hampton Roads avoid recording a loan-loss provision in the third quarter, compared to a $2.5 million provision a year earlier. The company also recovered $1.9 million from loans that it had previously been charged off.