SOURCE: Transcommunity Financial Corporation

August 24, 2005 14:42 ET

TransCommunity Announces Results of Operations; Completes Offering of Common Stock

RICHMOND, VA -- (MARKET WIRE) -- August 24, 2005 -- TransCommunity Financial Corporation (OTC BB: TCYF), parent holding company for Bank of Powhatan, Bank of Goochland and Bank of Louisa, announced three and six month financial results for the period ending June 30, 2005. For the quarter ended June 30, 2005, the company reported a net loss of $601,798, or ($0.26) per share, an improvement from a net loss of $720,268, or ($0.35) per share, for the same period in 2004. For the six month period ended June 30, 2005, the company reported a net loss of $1,075,065, or ($0.47) per share, compared to a loss of $1,636,419, or ($0.79) per share, for the same period in 2004.

William C. Wiley, chairman and chief executive officer, stated that TransCommunity's improved operating results for the first half of 2005 resulted from continued growth and improved performance at each of TransCommunity's subsidiary banks and other operating entities. During the six month period ended June 30, 2005, average earning assets grew 34% to $137.1 million compared to the same period in 2004.

Net interest income for the second quarter of 2005 was $1,692,383, up $597,877 or 54.6% from the same period during 2004. TransCommunity's net interest margin for the six month period ended June 30, 2005 was 4.71%, compared with 3.98% for the first half of 2004, due to several factors including an increase of 113 basis points in the yield on average earning assets, while the cost of interest bearing deposits and liabilities increased by only 38 basis points. This increase in average earning assets combined with the improvement in net interest margin is responsible for the 54.6% growth in net interest income reported for the second quarter.

At June 30, 2005, TransCommunity reported total assets of $156.9 million; total loans net of the allowance for loan losses of $108.8 million; total deposits of $140 million and stockholders' equity of $14.5 million.

"We are pleased with TransCommunity's improved performance during the first half of 2005," Wiley said. "We believe that the demonstrated ability of our banks to achieve higher-than-average net interest margins is a validation of our strategy of growing our company principally through the establishment of separately chartered banks, rather than by branching. We anticipate that the reduction in consolidated operating losses demonstrated during the first half of 2005 will continue throughout the remainder of the year as we continue to focus on achieving operating profitability."

During July, 2005, TransCommunity also completed a public offering of 2,300,000 shares of its common stock to a limited number of institutional investors underwritten by Sandler O'Neill & Partners, L.P. Wiley commented that a portion of the net proceeds of $17.2 million of this offering before expenses will be used to provide initial capital for the proposed Bank of Rockbridge, a fourth subsidiary bank that TransCommunity plans to open in Lexington, Virginia. Shares of TransCommunity Financial Corporation trade on the Over the Counter Bulletin Board (OTC BB) under the symbol: TCYF.

TransCommunity Financial Corporation cautions readers that certain statements contained in this news release regarding its future operations and business prospects are forward-looking statements based on management's current knowledge and assumptions about future events and involve risks and uncertainties that could cause actual results to differ materially from anticipated results. For more details on factors that could affect expectations, see the company's Annual Report on Form 10-KSB for the period ended December 31, 2004, as amended, and other filings with the Securities and Exchange Commission.

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