Heritage Bankshares, Inc. Announces Second Quarter and Six Months 2008 Earnings and Declares Dividend

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Announces First Quarter 2008 Earnings and Declares Dividend

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Declares Dividend

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Announces Results for Fourth Quarter and Full Year 2007

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Declares Dividend

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Announces Third Quarter and Nine Months 2007 Earnings

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Announces Second Quarter and Six Months 2007 Earnings

Hide Press Release

Download Press Release

Back to Top

Wall Street Journal Correction

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Declares Dividend

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Announces Increase in First Quarter 2007 Earnings

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Declares Dividend

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Announces Results for Fourth Quarter and Full Year 2006

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Declares Dividend

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Announces Results for Third Quarter and First Nine Months of 2006

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Declares Dividend

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Announces Results for Fourth Quarter and Full Year 2005

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Announces Private Placement

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Declares Dividend

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Completes Restatement, Files 2004 10-KSB

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Updates Timetable for Completion of Certain Reports

Hide Press Release

Download Press Release

Back to Top

Heritage Bankshares, Inc. Updates Timetable for Review of Financial Statements, Completion of Annual and Quarterly Reports

Hide Press Release

Norfolk, Va.: April 3, 2006 – Heritage Bankshares, Inc. (“Heritage”) (Pinksheets: HBKS) today provided an updated timetable for the review of its financial results and completion of certain annual and quarterly reports.

As previously announced, due to the discovery of certain accounting errors, Heritage is in the process of restating its annual financial statements for the years ended December 31, 2003 and December 31, 2002, as well as its unaudited financial statements for 2004. As a result, Heritage has not yet filed its Form 10 KSB for the fiscal year ended December 31, 2004 or its Forms 10 QSB for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005.

Heritage has made significant progress in the preparation of the filing of its annual report on Form 10-KSB for the year ended December 31, 2004. However, Heritage has spent substantially more time than previously anticipated reviewing 2005 financial results and researching additional items relating to 2005 and prior years. In addition, Heritage did not have available to it, during the first quarter of 2006, the amount of outside accounting resources that it had previously anticipated. Heritage now anticipates that it will complete and file with the Securities and Exchange Commission (“SEC”) its annual report on Form 10 KSB for the fiscal year ended December 31, 2004 by May 15, 2006. The report will include restated annual financial statements for 2003 and 2002.

Also as previously announced, Heritage is also working to complete the company’s quarterly reports for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005. Heritage has retained additional outside accounting resources that are assisting in the preparation of these quarterly reports. Heritage currently expects that it will complete and file with the SEC its Forms 10 QSB for the quarters noted above by June 15, 2006. The reports will include restated unaudited quarterly financial information for the corresponding quarters for 2004.

Finally, Heritage currently believes that it will complete and file with the SEC both its Form 10 KSB for the fiscal year ended December 31, 2005 and its Form 10 QSB for the quarter ended March 31, 2006 by June 30, 2006. Accordingly, Heritage now anticipates that it will be current in its filings with the SEC by the end of June 2006.

The timelines outlined above reflect Heritage management’s estimates and beliefs based on the status of its financial review and analysis to date. One or more of the timelines could change due to, among other things, adjustments to financial statements required in connection with the final preparation of the company’s applicable annual and quarterly reports. Heritage will provide updates to the extent any modifications to its estimated timelines become necessary.

Heritage is the parent company of Heritage Bank (www.heritagebankva.com). Heritage Bank has four full-service branches in the City of Norfolk, one full service branch in the City of Virginia Beach and one branch in the City of Chesapeake. Heritage Bank provides a full range of financial services including business, personal and mortgage loans, insurance, and annuities.

Forward Looking Statements

The press release contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage’s actual results, performance, achievements, and business strategy to differ materially from those anticipated. Forward looking statements often contain a word such as “expect,” believe,” “estimate” or “anticipate.” For example, our forward-looking statements include statements regarding expectations for on-going review of financial and accounting matters, estimated timelines for our SEC filings and our undertaking to update the estimated timelines as conditions warrant. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from those anticipated include: discovery of further accounting errors, general and local economic conditions, competition, capital requirements of the bank’s announced expansion plans, customer demand for Heritage’s banking products and services, and the risks and uncertainties described in Heritage’s Form 10 KSB filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Back to Top

Heritage Bankshares, Inc. Declares Dividend

Hide Press Release

Norfolk, Va.: February 22, 2006 – Heritage Bankshares, Inc. (“Heritage”) (Pinksheets: HBKS) announced that today its Board of Directors declared a $0.06 per share dividend on Heritage’s common stock. The dividend will be paid on March 17, 2006 to shareholders of record on March 6, 2006.

Heritage is the parent company of Heritage Bank (www.heritagebankva.com). Heritage Bank has four full-service branches in the City of Norfolk, one in the City of Virginia Beach, and one branch in the City of Chesapeake. Heritage Bank provides a full range of financial services including business, personal and mortgage loans, insurance, and annuities.

Forward Looking Statements

The press release contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage’s actual results, performance, achievements, and business strategy to differ materially from the anticipated results, performance, achievements or business strategy expressed or implied by such forward-looking statements. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from anticipated results, performance, achievements and business strategy include: general and local economic conditions, competition, capital requirements of the planned expansion, customer demand for Heritage’s banking products and services, and the risks and uncertainties described in Heritage’s most recent Form 10-KSB filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Back to Top

Heritage Bankshares, Inc. Updates Timetable for Review of Financial Statements, Completion of Annual and Quarterly Reports

Hide Press Release

Norfolk, Va.: February 15, 2006 – Heritage Bankshares, Inc. (“Heritage”) (Pinksheets: HBKS) today provided an updated timetable for the review of its financial results and completion of certain annual and quarterly reports.

As previously announced, due to the discovery of certain accounting errors, Heritage is in the process of restating its annual financial statements for the years ended December 31, 2003 and December 31, 2002, as well as its unaudited financial statements for 2004. As a result, Heritage has not yet filed its form 10 KSB for the fiscal year ended December 31, 2004 or its Forms 10 QSB for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005.

Since Heritage’s December 2005 announcement regarding the results of its accounting review, Heritage has continued to work on completing the above filings, which include corrections to numerous supporting tables for prior periods. Because of Heritage’s limited resources and the time required of Heritage’s accounting staff to complete the detail of these filings, to research and resolve any additional items that may come to light, and to maintain normal accounting department operations, Heritage now anticipates that it will complete and file with the Securities and Exchange Commission (“SEC”) its annual report on Form 10 KSB for the fiscal year ended December 31, 2004 by March 31, 2006. The report will include restated annual financial statements for 2003 and 2002.

Heritage will then work to complete the company’s quarterly reports for the quarters ended March 31, 2005, June 30, 2005 and September 30, 2005; Heritage currently expects that it will complete and file with the SEC its Forms 10 QSB for the quarters noted above by April 30, 2006. The reports will include restated unaudited quarterly financial information for the corresponding quarters for 2004.

Finally, Heritage currently believes that it will complete and file with the SEC both its Form 10 KSB for the fiscal year ended December 31, 2005 and its Form 10 QSB for the quarter ended March 31, 2006 by May 31, 2006. Accordingly, Heritage anticipates that it will be current in its filings with the SEC by the end of May 2006.

The timelines outlined above reflect Heritage management’s estimates and beliefs based on the status of its financial review and analysis to date. One or more of the timelines could change due to, among other things, adjustments to financial statements required in connection with the final preparation of the company’s applicable annual and quarterly reports. Heritage will provide prompt updates to the extent any modifications to its estimated timelines become necessary.

Heritage is the parent company of Heritage Bank (www.heritagebankva.com). Heritage Bank has four full-service branches in the City of Norfolk, one full service branch in the City of Virginia Beach and one branch in the City of Chesapeake. Heritage Bank provides a full range of financial services including business, personal and mortgage loans, insurance, and annuities.

Forward Looking Statements

The press release contains statements that constitute “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage’s actual results, performance, achievements, and business strategy to differ materially from those anticipated. Forward looking statements often contain a word such as “expect,” believe,” “estimate” or “anticipate.” For example, our forward-looking statements include statements regarding expectations for on-going review of financial and accounting matters, estimated timelines for our SEC filings and our undertaking to update the estimated timelines as conditions warrant. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from those anticipated include: discovery of further accounting errors, general and local economic conditions, competition, capital requirements of the bank’s announced expansion plans, customer demand for Heritage’s banking products and services, and the risks and uncertainties described in Heritage’s Form 10 KSB filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Back to Top

Heritage Bankshares, Inc. Announces Accounting Review Results

Hide Press Release

NORFOLK, Va., Dec. 9 /PRNewswire-FirstCall/ -- Heritage Bankshares, Inc. (Pinksheets: HBKS - News; Heritage), today provided the results of its previously announced review of its financial statements for the period 2000 through 2004. Management believes that accounting errors for periods prior to January 1, 2002 were immaterial to the company's financial condition and results of operations. Heritage expects to reflect such errors as a cumulative adjustment to Stockholders' Equity as of January 1, 2002, which will decrease by $91,000 or (0.85%) from $10.658 million to $10.567 million. The results of Heritage's financial review reflect that net income for 2002 has increased by $86,662, or approximately 6.4%; net income for 2003 has decreased by $26,781, or approximately 1.5%; and net income for 2004 has decreased by $732,214, or approximately 30.5%. The following is a discussion of the financial analysis which Heritage management has undertaken in order to reach its conclusions. Heritage intends to finalize its work and file its annual report on Form 10- KSB for the year ended December 31, 2004 with the Securities and Exchange Commission as soon as possible. The report will include restated annual financial statements for 2002 and 2003 together with annual financial statements for 2004.

Background

As previously announced, in February of 2005, Heritage appointed a new President & Chief Executive Officer following the death of its former President & CEO in November of 2004; Heritage's Chief Financial Officer subsequently resigned and Heritage appointed a new CFO. Shortly thereafter, the new management team began a review of various items in Heritage's financial statements and accounting records in connection with the preparation of Heritage's annual report and Form 10-KSB for 2004. Management discovered accounting errors in Heritage's previously reported financial statements for 2004 relating to the treatment of stock options under Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25), and the calculation of diluted earnings per share, and concluded and announced that the financial statements for 2004 should no longer be relied upon and would need to be restated.

In light of the errors discovered, Heritage management undertook additional review of Heritage's financial statements for periods 2000 through 2004. As previously announced, completing this review was a more difficult task than management originally anticipated, in particular because of Heritage's misapplication of Statement of Financial Accounting Standards No. 91, "Accounting for Non-Refundable Fees and Costs Associated with Originating or Acquiring Loans and Indirect Costs of Leases" (FAS 91).

As previously announced, management concluded on November 3, 2005 that due to certain accounting errors Heritage's financial statements for the years ended December 31, 2003 and December 31, 2002 should be restated and no longer be relied upon. On November 7, 2005, the Audit Committee of the Board of Directors discussed this matter and concurred with management's conclusion.

In the course of its review, management also found additional errors relating to various matters, the impact of which are described below.

FAS 91 - Deferral of Loan Fees and Origination Costs

FAS 91 generally requires that loan fees and direct loan origination costs be deferred and recognized as an adjustment to the loan's yield. Amortization of the net fee and cost is calculated using either the level-yield or straight-line method, depending on the type of loan. Heritage's misapplication of FAS 91 involved both the calculation of direct origination costs, as well as applying the correct amortization method.

Current management re-estimated the unamortized net fee and cost for loans at the end of each fiscal year, beginning at December 31, 1999. The result of the FAS 91 re-estimation analysis reflected a cumulative adjustment to net deferred loan costs, as well as an adjustment to pre-tax income. In addition, the analysis reflected a significant reduction in salaries and benefit costs (deferred direct loan origination costs for each respective year), generally offset by a reduction in interest income (yield adjustment) on loans.

Deferred Compensation Plan

Heritage currently maintains a deferred compensation plan for certain directors and its former Chief Executive Officer. The plan provides for a defined monthly benefit for each participant in accordance with the terms of each individual's participation agreement. Heritage has also purchased life insurance to fund a portion of the deferred compensation liability.

Management discovered errors in accounting for the deferred compensation plans and associated life insurance resulting from a misapplication of generally accepted accounting principles (GAAP), which require that the employer's obligation be accrued according to the terms of the individual contracts over the required service period to the date the participants are fully eligible to receive the benefits. Under such principles, at the full eligibility date, the deferred compensation liability should equal the then present value of the estimated benefit payments to be made under the individual contract. Heritage's misapplication of these calculations required by GAAP resulted in an understatement of the required liability.

GAAP also requires that life insurance purchased to fund any portion of the deferred compensation liability to be accounted for separately, that is, not offset against or otherwise integrated into the accounting for the deferred compensation liabilities. In 2002, life insurance proceeds were incorrectly credited to the deferred compensation liability, thereby partially covering a shortfall that existed in that liability. In addition, an increase in the cash surrender value of the life insurance contracts during 2001 was not recorded until 2002, thus requiring an additional accounting correction.

Stock Options

As previously reported, Heritage misapplied APB 25 in accounting for the exercise of stock options. When options were exercised, the tax benefit from the option exercises was incorrectly reflected as an income tax expense reduction and, therefore, an increase in Heritage's net income. However, under APB 25, the tax benefit should not have been included in Heritage's income statement but instead should have been recorded solely as an increase in additional paid-in capital. As a result, Heritage's income tax expense for each year was understated by the amount of the tax benefit and, therefore, the earnings were overstated by a commensurate amount.

Also as previously announced, Heritage had not properly accounted for the effect of tax benefits in the calculation of outstanding dilutive common stock options. Earnings per share have been recalculated to correct this error.

Other Adjustments

Adjustments were also necessary to correct accounting errors related to the following items:

• A 2004 charge, as previously announced, related to the impairment of certain loans under a lending relationship with one borrower.
• In the early 1990s, Heritage acquired, through foreclosure, four properties which were subsequently rented. Although initially recording depreciation expense for these properties, Heritage discontinued recordation of that expense several years later. Accordingly, since the properties were held for investment, accounting corrections to adjust for the discontinued depreciation were necessary.
• Employer 401(k) matching contributions were not recorded properly during the year incurred.
• A 2004 impairment charge related to certain long-lived assets.
• Income tax expense adjustments to correct errors in 2002 and 2003.

Heritage also made additional adjustments to correct other miscellaneous accounting errors.

Summary of Adjustments

The tables below present the estimated adjustments to net income with respect to the years ended December 31, 2002, 2003 and 2004, and the balance sheet at December 31, 2002, 2003 and 2004.

    
    
    HERITAGE BANKSHARES, INC.
    CONSOLIDATED STATEMENTS OF INCOME
    Year Ended December 31
    
    
    As Reported  Effects of   Restated
    2002     Adjustments    2002
    
    Interest and fees on loans
    FAS 91 Yield Adjustment                          $(405,596)
    Loan fees - reclassification to
    noninterest income                                (83,021)
    Miscellaneous                                        2,039
    Total                                $6,418,644   (486,578) $5,932,066
    
    Interest on investment securities
    Available for sale -
    reclassification to AFS                                98
    Held to maturity                                         -
    Total                                   819,735         98     819,833
    
    Interest on federal funds sold             135,251          -     135,251
    Interest on deposit accounts                                -           -
    
    Total interest income                    7,373,630   (486,480)  6,887,150
    
    Interest expense
    Interest on deposits                  2,525,852          -   2,525,852
    Interest on short-term borrowings        55,685          -      55,685
    Total interest expense                2,581,537          -   2,581,537
    
    Net interest income                      4,792,093   (486,480)  4,305,613
    
    Provision for loan losses                   99,000          -      99,000
    
    Net interest income after provision for
    loan losses                             4,693,093   (486,480)  4,206,613
    
    Noninterest income
    Services charges                        295,217          -     295,217
    Other noninterest income
    Life insurance proceeds                         142,000
    Loan fees - reclassification from
    interest on loans                               83,021
    Cash Surrender Value - Life
    insurance                                      (46,504)
    Dividends on equities                               (98)
    Miscellaneous                                         -
    Total - other noninterest income     551,957    178,419     730,376
    Total noninterest income                847,174    178,419   1,025,593
    
    
    Noninterest expense
    Salaries and employee benefits
    FAS 91 Deferred Costs                          (391,909)
    Deferred compensation plans                     (38,023)
    401(k) plan expense adjustments                  36,108
    Miscellaneous                                    13,901
    Total salaries and employee benefits  1,932,129   (379,923)  1,552,206
    
    Other noninterest expense
    Depreciation expense - Investment
    property                                        21,485
    Loss on impairment - ATMs                             -
    Miscellaneous                                   (22,984)
    Total - other noninterest expense       657,362     (1,499)    655,863
    
    Automated services                         297,413          -     297,413
    
    Occupancy expenses                         239,177          -     239,177
    
    Furniture and equipment expense
    Miscellaneous                                       24,096
    Total furniture and equipment
    expense                                199,443     24,096     223,539
    
    Taxes and licenses                         126,355          -     126,355
    
    Stationery and supplies                     73,245          -      73,245
    
    Total noninterest expense                3,525,124   (357,326)  3,167,798
    
    Income before income taxes               2,015,143     49,265   2,064,408
    
    Income tax expense
    APB 25, Stock Options                               22,594
    Tax effect of adjustments                           32,561
    Correction of other tax provision
    errors                                            (92,552)
    Total income tax                        650,440    (37,397)    613,043
    
    Net income                              $1,364,703    $86,662  $1,451,365
    
    Earnings per share: (1)
    
    Basic                                     $0.87      $0.06       $0.93
    
    Diluted                                   $0.82      $0.07       $0.89
    
    Weighted average basic shares (1)        1,562,358       (567)  1,561,791
    
    Weighted average diluted shares  (1)     1,656,418    (29,638)  1,626,780
    
    
    
    As Reported  Effects of   Restated
    2003     Adjustments    2003
    
    Interest and fees on loans
    FAS 91 Yield Adjustment                          $(419,040)
    Loan fees - reclassification to
    noninterest income                                (80,466)
    Miscellaneous                                       (1,333)
    Total                                $6,460,321   (500,839) $5,959,482
    
    Interest on investment securities
    Available for sale -
    reclassification to AFS                               286
    Held to maturity                                         -
    Total                                   692,134        286     692,420
    
    Interest on federal funds sold             112,263                112,263
    Interest on deposit accounts                 2,046                  2,046
    
    Total interest income                    7,266,764   (500,553)  6,766,211
    
    Interest expense
    Interest on deposits                  2,178,402              2,178,402
    Interest on short-term borrowings        39,444                 39,444
    Total interest expense                2,217,846          -   2,217,846
    
    Net interest income                      5,048,918   (500,553)  4,548,365
    
    Provision for loan losses                   40,000                 40,000
    
    Net interest income after provision for
    loan losses                             5,008,918   (500,553)  4,508,365
    
    Noninterest income
    Services charges                        302,688          -     302,688
    Other noninterest income
    Life insurance proceeds                               -
    Loan fees - reclassification from
    interest on loans                               80,466
    Cash Surrender Value - Life
    insurance                                            -
    Dividends on equities                              (286)
    Miscellaneous                                     4,418
    Total - other noninterest income   1,041,200     84,598   1,125,798
    Total noninterest income              1,343,888     84,598   1,428,486
    
    
    Noninterest expense
    Salaries and employee benefits
    FAS 91 Deferred Costs                          (485,720)
    Deferred compensation plans                       4,079
    401(k) plan expense adjustments                  11,108
    Miscellaneous                                     5,503
    Total salaries and employee benefits  2,102,315   (465,030)  1,637,285
    
    Other noninterest expense
    Depreciation expense - Investment
    property                                        21,485
    Loss on impairment - ATMs                             -
    Miscellaneous                                   (20,781)
    Total - other noninterest expense       749,306        704     750,010
    
    Automated services                         376,690          -     376,690
    
    Occupancy expenses                         246,192          -     246,192
    
    Furniture and equipment expense
    Miscellaneous                                       15,781
    Total furniture and equipment
    expense                                181,173     15,781     196,954
    
    Taxes and licenses                         144,543          -     144,543
    
    Stationery and supplies                     74,842          -      74,842
    
    Total noninterest expense                3,875,061   (448,545)  3,426,516
    
    Income before income taxes               2,477,745     32,590   2,510,335
    
    Income tax expense
    APB 25, Stock Options                               30,041
    Tax effect of adjustments                           11,080
    Correction of other tax provision
    errors                                             18,250
    Total income tax                        740,079     59,371     799,450
    
    Net income                              $1,737,666   $(26,781) $1,710,885
    
    Earnings per share: (1)
    
    Basic                                     $1.10     $(0.01)      $1.09
    
    Diluted                                   $1.02      $0.01       $1.03
    
    Weighted average basic shares (1)        1,576,258       (597)  1,575,661
    
    Weighted average diluted shares  (1)     1,698,864    (41,226)  1,657,638
    
    
    
    As Reported  Effects of   Restated
    2004 (2)   Adjustments    2004
    
    Interest and fees on loans
    FAS 91 Yield Adjustment                          $(332,561)
    Loan fees - reclassification to
    noninterest income                                (83,971)
    Miscellaneous                                       (4,370)
    Total                                $7,441,632   (420,902) $7,020,730
    
    Interest on investment securities
    Available for sale -
    reclassification to AFS                             1,174
    Held to maturity                                         -
    Total                                   586,677      1,174     587,851
    
    Interest on federal funds sold              47,905                 47,905
    Interest on deposit accounts                 2,665                  2,665
    
    Total interest income                    8,078,879   (419,728)  7,659,151
    
    Interest expense
    Interest on deposits                  2,119,106              2,119,106
    Interest on short-term borrowings        35,898                 35,898
    Total interest expense                2,155,004          -   2,155,004
    
    Net interest income                      5,923,875   (419,728)  5,504,147
    
    Provision for loan losses                  100,000    353,000     453,000
    
    Net interest income after provision for
    loan losses                             5,823,875   (772,728)  5,051,147
    
    Noninterest income
    Services charges                        300,477          -     300,477
    Other noninterest income
    Life insurance proceeds                               -
    Loan fees - reclassification from
    interest on loans                               83,971
    Cash Surrender Value - Life
    insurance                                            -
    Dividends on equities                            (1,174)
    Miscellaneous                                     5,919
    Total - other noninterest income   1,012,517     88,716   1,101,233
    Total noninterest income              1,312,994     88,716   1,401,710
    
    
    Noninterest expense
    Salaries and employee benefits
    FAS 91 Deferred Costs                          (263,861)
    Deferred compensation plans                      11,240
    401(k) plan expense adjustments                 (48,382)
    Miscellaneous                                   (12,181)
    Total salaries and employee benefits  2,149,055   (313,184)  1,835,871
    
    Other noninterest expense
    Depreciation expense - Investment
    property                                        21,485
    Loss on impairment - ATMs                        45,857
    Miscellaneous                                   (13,563)
    Total - other noninterest expense     1,178,130     53,779   1,231,909
    
    Automated services                         438,856     (9,056)    429,800
    
    Occupancy expenses                         249,642          -     249,642
    
    Furniture and equipment expense
    Miscellaneous                                        8,226
    Total furniture and equipment
    expense                                197,189      8,226     205,415
    
    Taxes and licenses                         150,468          -     150,468
    
    Stationery and supplies                     71,765          -      71,765
    
    Total noninterest expense                4,435,105   (260,235)  4,174,870
    
    Income before income taxes               2,701,764   (423,777)  2,277,987
    
    Income tax expense
    APB 25, Stock Options                              452,521
    Tax effect of adjustments                         (144,084)
    Correction of other tax provision
    errors                                                  -
    Total income tax                        300,858    308,437     609,295
    
    Net income                              $2,400,906  $(732,214) $1,668,692
    
    Earnings per share: (1)
    
    Basic                                     $1.42     $(0.43)      $0.99
    
    Diluted                                   $1.37     $(0.41)      $0.96
    
    Weighted average basic shares (1)        1,689,295     (6,658)  1,682,637
    
    Weighted average diluted shares  (1)     1,754,085    (17,415)  1,736,670
    
    
    (1) Adjusted for 2 for 1 stock split
    
    (2) Certain noninterest expenses as presented in Heritage's press release
    for the year 2004 have been reclassified to conform with prior years'
    presentation
    
    
    
    HERITAGE BANKSHARES, INC.
    CONSOLIDATED BALANCE SHEETS
    December 31,
    
    
    As Reported     Effects of     Restated
    2002         Adjustments      2002
    
    ASSETS
    Cash and due from banks      $8,878,558      $(217,864)    $8,660,694
    Federal funds sold           13,423,376         217,864    13,641,240
    Securities available
    for sale                    14,257,498          24,221    14,281,719
    Securities held to maturity   1,641,357         (7,455)     1,633,902
    Loans, net                   81,465,850         143,055    81,608,905
    Loans held for sale           3,361,680               -     3,361,680
    Accrued interest receivable     477,100           3,716       480,816
    Other real estate owned         433,340       (433,340)             -
    Premises and equipment, net   2,391,222          24,791     2,416,013
    Other assets                  1,799,351         260,042     2,059,393
    
    Total Assets               $128,129,332         $15,030  $128,144,362
    
    LIABILITIES AND STOCKHOLDERS'
    EQUITY
    Deposits
    Noninterest bearing
    deposits                   $21,623,273         $15,349   $21,638,622
    Interest-bearing deposits    89,000,702               -    89,000,702
    110,623,975          15,349   110,639,324
    Securities sold under
    agreements to repurchase     4,467,660               -     4,467,660
    Short-term borrowings            65,349        (15,349)        50,000
    Accrued interest payable        248,356               -       248,356
    Other liabilities               961,279        (11,440)       949,839
    Total liabilities           116,366,619        (11,440)   116,355,179
    
    Stockholders' equity
    Common stock, $5 par value
    - authorized
    3,000,000 shares              3,922,625       3,922,625     7,845,250
    Additional paid-in capital    (302,461)          99,677     (202,784)
    Retained earnings             7,878,163     (4,003,598)     3,874,565
    Accumulated other
    comprehensive income (loss)    264,386           7,766       272,152
    Total stockholders'
    equity (1)                  11,762,713          26,470    11,789,183
    
    Total Liabilities and
    Stockholders' Equity      $128,129,332         $15,030  $128,144,362
    
    Outstanding shares (2)        1,569,050                     1,569,050
    Book value per share (2)          $7.50           $0.01         $7.51
    
    
    
    As Reported     Effects of     Restated
    2003         Adjustments      2003
    
    ASSETS
    Cash and due from banks      $8,929,926      $(193,484)    $8,736,442
    Federal funds sold           10,600,345         193,484    10,793,829
    Securities available
    for sale                    18,572,979         28,680     18,601,659
    Securities held to
    maturity                     1,691,802        (17,455)     1,674,347
    Loans, net                  100,352,375         209,735   100,562,110
    Loans held for sale             171,475               -       171,475
    Accrued interest receivable     571,655           2,383       574,038
    Other real estate owned               -               -             -
    Premises and equipment, net   2,289,328          15,553     2,304,881
    Other assets                  1,789,389       (181,105)     1,608,284
    
    Total Assets               $144,969,274         $57,791  $145,027,065
    
    
    LIABILITIES AND STOCKHOLDERS'
    EQUITY
    Deposits
    Noninterest bearing
    deposits                   $29,525,495          $7,477   $29,532,972
    Interest-bearing deposits    95,221,901               -    95,221,901
    124,747,396           7,477   124,754,873
    Securities sold under
    agreements to repurchase     5,959,341               -     5,959,341
    Short-term borrowings            57,477         (7,477)        50,000
    Accrued interest payable        201,942               -       201,942
    Other liabilities               694,008          31,719       725,727
    Total liabilities           131,660,164          31,719   131,691,883
    
    Stockholders' equity
    Common stock, $5 par value
    - authorized
    3,000,000 shares              3,959,500       3,959,500     7,919,000
    Additional paid-in capital    (260,005)          92,843     (167,162)
    Retained earnings             9,474,344     (4,030,379)     5,443,965
    Accumulated other
    comprehensive income (loss)    135,271           4,108       139,379
    Total stockholders'
    equity (1)                  13,309,110          26,072    13,335,182
    
    Total Liabilities and
    Stockholders' Equity      $144,969,274         $57,791  $145,027,065
    
    Outstanding shares (2)        1,583,800                     1,583,800
    Book value per share (2)          $8.40           $0.02         $8.42
    
    
    
    As Reported     Effects of     Restated
    2004         Adjustments      2004
    
    ASSETS
    Cash and due from banks      $6,759,478      $(288,788)    $6,470,690
    Federal funds sold            1,117,880         288,788     1,406,668
    Securities available
    for sale                    14,177,896         106,618    14,284,514
    Securities held to maturity   1,626,489        (80,475)     1,546,014
    Loans, net                  123,757,168       (211,965)   123,545,203
    Loans held for sale           1,515,700               -     1,515,700
    Accrued interest receivable     578,625         (1,987)       576,638
    Other real estate owned               -         182,037       182,037
    Premises and equipment, net   2,559,201        (33,402)     2,525,799
    Other assets                  1,943,546       (376,192)     1,567,354
    
    Total Assets               $154,035,983      $(415,366)  $153,620,617
    
    LIABILITIES AND STOCKHOLDERS'
    EQUITY
    Deposits
    Noninterest bearing
    deposits                   $26,075,405       $(16,711)   $26,058,694
    Interest-bearing deposits   107,052,436               -   107,052,436
    133,127,841        (16,711)   133,111,130
    Securities sold under
    agreements to repurchase     2,030,021               -     2,030,021
    Short-term borrowings         1,774,289          16,711     1,791,000
    Accrued interest payable        231,905               -       231,905
    Other liabilities             1,089,486       (171,591)       917,895
    Total liabilities           138,253,542       (171,591)   138,081,951
    
    Stockholders' equity
    Common stock, $5 par value
    - authorized
    3,000,000 shares              8,535,910               -     8,535,910
    Additional paid-in capital       18,197         245,909       264,106
    Retained earnings             7,254,268       (503,638)     6,750,630
    Accumulated other
    comprehensive income (loss)   (25,934)          13,954      (11,980)
    Total stockholders'
    equity (1)                  15,782,441       (243,775)    15,538,666
    
    Total Liabilities and
    Stockholders' Equity      $154,035,983      $(415,366)  $153,620,617
    
    Outstanding shares (2)        1,707,182                     1,707,182
    Book value per share (2)          $9.24         $(0.14)         $9.10
    
    
    (1) Stockholders' equity at January 1, 2002 was reduced by $90,552 for the
    cumulative effect, net of income taxes, for prior years' accounting
    errors
    
    (2) Adjusted for 2 for 1 stock split
    
    

The "as reported" figures for 2004 were reported in Heritage's Form 8-K filed on January 31, 2005; the "as reported" figures for 2002 and 2003 were reported in Heritage's Forms 10-KSB for the applicable fiscal year. The financial information contained in the above tables may be adjusted in connection with Heritage's final preparation of the financial statements that will be included in its Form 10-KSB for 2004; Heritage currently does not expect that any such adjustments would be material.

Heritage is the parent company of Heritage Bank (http://www.heritagebankva.com). Heritage Bank has four full-service branches in the City of Norfolk, one full-service branch in the City of Virginia Beach, and one branch in the City of Chesapeake. Heritage Bank provides a full range of financial services including business, personal and mortgage loans, insurance, and annuities.

Forward Looking Statements

The press release contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage's actual results, performance, achievements, and business strategy to differ materially from those anticipated. Forward looking statements often contain a word such as "expect," "believe," "estimate" or "anticipate." For example, our forward-looking statements include statements regarding our expectations for on-going review of accounting matters, the expected or estimated results of that review, and our current analysis of the results of that review. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from those anticipated include: discovery of further accounting errors, general and local economic conditions, competition, capital requirements of the bank's announced expansion plans, customer demand for Heritage's banking products and services, and the risks and uncertainties described in Heritage's Form 10-KSB filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Back to Top

Heritage Bankshares, Inc. Announces Preliminary Results for Third Quarter, 2005, Additional Branch Expansion, and Updates Timetable for Review of Financial Statements

Hide Press Release

NORFOLK, Va., Nov. 2 Heritage Bankshares, Inc. ("Heritage") (Pink Sheets: HBKS - News) announced today certain unaudited, preliminary financial results for the third quarter of 2005. Net income, after tax, for the quarter ended September 30, 2005 was $170,000, or $0.10 per basic share. Net interest income for the third quarter was $1.6 million. No additional provision for loan loss was recorded for the quarter ended September 30, 2005. Noninterest expense for the quarter was $1.7 million, which included compensation expense of $731,000. Results for the third quarter were affected by the following items: a pretax gain of $118,000 on the sale of one former REO (Real Estate Owned) property, offset by $79,000 of pretax legal expenses related to various securities and general banking matters and pretax expense of $72,000 largely related to contract accounting services.

Net income, after tax, for the nine months ended September 30, 2005 was $1,009,000, or $0.59 per basic share. Net interest income for the nine months ended September 30, 2005 was $5.0 million. Provision for loan losses was $30,000 for the nine month period. Noninterest expense for the nine months ended September 30, 2005 was $4.6 million, which included compensation expense of $2.1 million. Pretax expenses of $209,000 related primarily to contract accounting services, together with $195,000 in various legal expenses, largely offset a $427,000 gain on the sale of REO during the first nine months of 2005. At September 30, 2005 Heritage had 1,712,000 shares outstanding.

In addition, Heritage announced that total assets at September 30, 2005 grew to $205 million, an increase of $51 million from $154 million in assets at December 31, 2004. Net loans held for investment at September 30, 2005 were unchanged from $125 million at December 31, 2004. There was no REO at September 30, 2005. Total deposits at September 30, 2005 were $173 million, compared to total deposits of $133 million at December 31, 2004, an increase of $40 million; furthermore, noninterest bearing deposits have increased by $18 million in the first nine months of 2005, from $26 million at December 31, 2004 to $44 million at September 30, 2005. Total transaction deposits have also increased in the first nine months of 2005, growing by $33 million in the period, from $67 million at December 31, 2004 to $100 million at September 30, 2005.

Michael S. Ives, President and Chief Executive Officer of the Company, commented, "For the past nine months, we have been working at a frenetic pace on four major initiatives: our comprehensive technology improvement program; our branch expansion program; our banking team development program; and our accounting review."

Ives continued, "We have made tremendous strides in our banking technology during the past year. We have networked all of our financial centers for the first time and have automated many of our retail banking and loan origination processes. We have recently installed a comprehensive small business banking program that allows our customers to undertake a wide variety of banking transactions in a secure environment while they are sitting at their desks in their offices. This new program makes Heritage competitive with the large regional banks that offer similar services to their small business customers."

Ives reported further, "Heritage has also met with great success in our branch expansion program. In October, Heritage opened its first financial center in Virginia Beach at the Little Neck Towers. In addition, Heritage has purchased a site for another financial center at 1756 Laskin Road in the Hilltop section of Virginia Beach. Heritage has a third site under option on Lynnhaven Parkway, also in Virginia Beach. Meanwhile, in Norfolk, Heritage has executed a lease to move its Financial District Office into the Trader Publishing Building on Trader Square upon its completion of construction. The Trader Publishing Building will be the newest high-rise office building in the Financial District, and we are pleased to have the opportunity to have our offices in this prominent location at the intersection of Granby Street and City Hall Avenue."

Ives further reported, "Throughout the year, we have been recruiting additional lending and retail banking personnel capable of providing the highest level of banking services to our small business customers. Heritage now has managers at five of our financial centers with sales experience with major regional banks. We have continued to strengthen our lending and credit administration teams with the addition of three more lending officers during October. Also, we have formed Advisory Boards of Directors for Norfolk and Virginia Beach and have implemented an Advisory Board Incentive Campaign using a successful model developed by members of our team for another community bank."

Ives continued, "Progress of this type does not come without cost. These initiatives have caused substantial increases in our overall expenses. We view these increases in our expenses as essential to growing Heritage more rapidly than previously and in a safe and sound manner."

Ives concluded, "Existing and prospective customers are responding quite positively to our new initiatives. We have grown our deposits by approximately $40 million, or 30%, since the beginning of the year, even while replacing approximately $9.5 million of governmental deposits held by Heritage at December 31, 2004 with core deposits this year."

As previously announced, Heritage is in the process of restating its unaudited quarterly financial statements for the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004, as well as revising financial information for the quarter and year ended December 31, 2004 included in Heritage's Form 8-K filed on January 31, 2005, for reasons related to the treatment of outstanding stock options and certain stock options exercised in 2004. As a result of its discovery of the need to restate those financial statements and its continuing review of financial statements for years prior to 2004, Heritage has not yet filed its Annual Report on Form 10-KSB for the year ended December 31, 2004 or its Form 10-QSB for the quarters ended March 31 and June 30, 2005, and anticipates filing with the Securities and Exchange Commission a Form 12b-25 reporting that it will not be able to complete and file its Quarterly Report on Form 10-QSB for the current quarter within the prescribed time period. Furthermore, due to the continuing review of its financial statements and results for previous periods, the preliminary, unaudited financial information contained in this release may be adjusted.

Also as previously reported, a significant issue in Heritage's continuing review of its financial statements for prior periods involves the application of SFAS 91, "Accounting for Non-Refundable Fees and Costs Associated with Originating or Acquiring Loans and Indirect Costs of Leases." Heritage has made great progress with regard to its SFAS 91 analysis and has completed its SFAS 91 review for the years 2000 and 2001. Heritage anticipates that it will complete its SFAS 91 analysis for subsequent years, and its review of miscellaneous tax provisions for all applicable years, within two weeks. After the completion of its review, Heritage will announce the results promptly and then proceed to prepare and file the appropriate reports with the Securities and Exchange Commission.

Heritage is the parent company of Heritage Bank (http://www.heritagebankva.com). Heritage Bank has four full-service branches in the City of Norfolk, one full-service branch in the City of Virginia Beach, and one branch in the City of Chesapeake. Heritage Bank provides a full range of financial services including business, personal and mortgage loans, insurance, and annuities.

Forward Looking Statements

The press release contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements address future events, developments or results and typically use words such as believe, anticipate, expect, intend, plan, forecast, outlook, or estimate. For example, our forward-looking statements include statements regarding our expectations for technology improvements, branch expansion, management development, expenses and customer deposits as well as our on-going review of accounting matters. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage's actual results, performance, achievements, and business strategy to differ materially from the anticipated results, performance, achievements or business strategy expressed or implied by such forward-looking statements. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from anticipated results, performance, achievements and business strategy include: general and local economic conditions, competition, capital requirements of the planned expansion, customer demand for Heritage's banking products and services, and the risks and uncertainties described in Heritage's most recent Form 10-KSB filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Back to Top

Heritage discovered accounting errors in its financial statements reported for 2004

Hide Press Release

NORFOLK, Va., Sept. 2 -- As previously announced, earlier this year Heritage discovered accounting errors in its financial statements reported for 2004, relating to the treatment of stock options under APB 25 and the calculation of diluted earnings per share. Heritage then concluded and announced that the financial statements for 2004 should no longer be relied upon and would need to be restated.

Heritage continues to review various items in its previous financial statements and will not restate its financial statements or file its SEC reports until after that review is complete.

Heritage's continued review of its financial and accounting records for 2004, as well as for prior periods, has revealed a number of errors, some of which raised complex issues and have involved substantial time to resolve. One of those errors, at this time unresolved, involves the application of SFAS 91, "Accounting for Non-Refundable Fees and Costs Associated with Originating or Acquiring Loans and Indirect Costs of Leases." Due to the complications involved in applying SFAS 91 to Heritage's accounting records, Heritage has not yet completed its analysis and, as a result, has not determined the impact on the company's financial statements when combined with the additional errors uncovered. Once the SFAS 91 analysis is complete, there could be additional material adjustments to the 2004 financial statements as well as previous financial statements. Management believes that Heritage's financial position remains strong and its business and operations will not be threatened by any adjustments that might be made.

Heritage is the parent company of Heritage Bank (http://www.heritagebankva.com). Heritage Bank has four full-service branches in the City of Norfolk and one branch in the City of Chesapeake. Heritage Bank provides a full range of financial services including business, personal and mortgage loans, insurance, and annuities.

Forward Looking Statements

The press release contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Our "forward looking statements" include the timing of the next update, the possible materiality of the adjustments, Heritage's financial position, and the effect of the adjustments on Heritage's business and operations. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage's actual results, performance, achievements, and business strategy to differ materially from the anticipated results, performance, achievements or business strategy expressed or implied by such forward-looking statements. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from anticipated results, performance, achievements and business strategy include: general and local economic conditions, competition, capital requirements of the planned expansion, customer demand for Heritage's banking products and services, and the risks and uncertainties described in Heritage's most recent Form 10-KSB filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Back to Top

Heritage Bankshares, Inc. Announces Preliminary Results for Second Quarter, 2005

Hide Press Release

NORFOLK, Va., Aug. 10 -- Heritage Bankshares, Inc. ("Heritage") (HBKS) announced today certain unaudited, preliminary financial results for the second quarter of 2005. Net income, after tax, for the quarter ended June 30, 2005 was $286,000. Net interest income for the second quarter was $1.6 million. No additional provision for loan loss was recorded for the quarter ended June 30, 2005. Noninterest expense for the quarter was $1.6 million, which included compensation expense of $787,000. Results for the second quarter were affected by the following items: a pretax gain of $151,000 on the sale of one former REO (Real Estate Owned) property, offset by $43,000 of pretax legal expenses related to various securities and general banking matters and pretax expense of $103,000 largely related to contract accounting services.

Net income, after tax, for the six months ended June 30, 2005 was $839,000, or $0.49 per basic share. Net interest income for the six months ended June 30, 2005 was $3.3 million. Provision for loan losses was $30,000 for the six month period. Noninterest expense for the six months ended June 30, 2005 was $2.8 million, which included compensation expense of $1.3 million. Pretax expenses of $137,000 related primarily to contract accounting services, together with $116,000 in various legal expenses, largely offset a $309,000 gain on the sale of REO during the first six months of 2005. At June 30, 2005 Heritage had 1,707,850 shares outstanding.

In addition, Heritage announced that total assets at June 30, 2005 grew to $183 million, an increase of $29 million from $154 million in assets at December 31, 2004. Net loans held for investment at June 30, 2005 decreased by $4 million to $121 million, compared to $125 million at December 31, 2004. REO was $126,000 at June 30, 2005. Total deposits at June 30, 2005 were $152 million, compared to total deposits of $133 million at December 31, 2004, an increase of $19 million; furthermore, noninterest bearing deposits have increased by $4 million in the first six months of 2005, from $26 million at December 31, 2004 to $30 million at June 30, 2005. Total transaction deposits have also increased in the first six months of 2005, growing by $9 million in the period, from $67 million at December 31, 2004 to $76 million at June 30, 2005.

Michael S. Ives, President and Chief Executive Officer of Heritage, commented, "In many ways, Heritage is like a new bank. In order to expand quickly, we are incurring substantial expenses to recruit highly experienced personnel, to install the latest commercial banking technology, and to commence our branch expansion into Virginia Beach. We expect to continue these expansion activities for the remainder of this year and throughout 2006. These initiatives will enable us to offer superior commercial banking services and thereby serve a greater range of small business and professional and executive customers than Heritage had served previously."

Ives continued, "Our core deposit growth is an early indicator of the likely success of our initiatives. We are well on our way to achieving our initial expansion objectives."

As previously announced, Heritage is in the process of restating its unaudited quarterly financial statements for the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004, as well as revising financial information for the quarter and year ended December 31, 2004 included in Heritage's Form 8-K filed on January 31, 2005, for reasons related to the treatment of outstanding stock options and certain stock options exercised in 2004. As a result of its discovery of the need to restate those financial statements and its continuing review of financial statements for years prior to 2004, Heritage has not yet filed its Annual Report on Form 10-KSB for the year ended December 31, 2004 or its Form 10-QSB for the quarter ended March 31, 2005, and anticipates filing with the Securities and Exchange Commission a Form 12b-25 reporting that it will not be able to complete and file its Quarterly Report on Form 10-QSB for the current quarter within the prescribed time period. Furthermore, due to the continuing review of its financial statements and results for previous periods, the preliminary, unaudited financial information contained in this release may be adjusted.

Heritage anticipates completing the review of its financial statements by the end of the third quarter of this year.

Heritage is the parent company of Heritage Bank (http://www.heritagebankva.com). Heritage Bank has four full-service branches in the City of Norfolk and one branch in the City of Chesapeake. Heritage Bank provides a full range of financial services including business, personal and mortgage loans, insurance, and annuities.

Forward Looking Statements

The press release contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage's actual results, performance, achievements, and business strategy to differ materially from the anticipated results, performance, achievements or business strategy expressed or implied by such forward-looking statements. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from anticipated results, performance, achievements and business strategy include: general and local economic conditions, competition, capital requirements of the planned expansion, customer demand for Heritage's banking products and services, and the risks and uncertainties described in Heritage's most recent Form 10-KSB filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise

Back to Top

Heritage Bankshares, Inc. announced today that on July 27, 2005 its Board of Directors declared a $0.12 per share dividend on Heritage's common stock.

Hide Press Release

NORFOLK, Va., July 28 / -- Heritage Bankshares, Inc. ("Heritage") (OTC Bulletin Board: HBKS - News) announced today that on July 27, 2005 its Board of Directors declared a $0.12 per share dividend on Heritage's common stock. The dividend will be paid on August 26, 2005 to shareholders of record on August 12, 2005. Heritage's Board plans to continue to evaluate the declaration and payment of dividends after each calendar quarter.

In addition, Heritage anticipates that it will release preliminary results of operations for the second quarter of 2005 by August 15, 2005.

Heritage is the parent company of Heritage Bank (http://www.heritagebankva.com). Heritage Bank has four full-service branches in the City of Norfolk and one branch in the City of Chesapeake. Heritage Bank provides a full range of financial services including business, personal and mortgage loans, insurance, and annuities.

Forward Looking Statements

The press release contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage's actual results, performance, achievements, and business strategy to differ materially from the anticipated results, performance, achievements or business strategy expressed or implied by such forward-looking statements. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from anticipated results, performance, achievements and business strategy include: general and local economic conditions, competition, capital requirements of the planned expansion, customer demand for Heritage's banking products and services, and the risks and uncertainties described in Heritage's most recent Form 10-KSB filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Back to Top

Heritage Bankshares, Inc. Announces Intention to Open Branch Office in Virginia Beach, Addition to Loan Loss Allowance, and Continued Progress in Review of Financial Statements for 2004 and Prior Periods

Hide Press Release

Friday May 6, 5:17 pm ET - NORFOLK, Va., -- Heritage Bankshares, Inc. ("Heritage") (OTC Bulletin Board: HBKS - News) announced today that Heritage Bank, the sole bank subsidiary of Heritage (the "Bank"), has entered into a lease for office space in the Little Neck Towers Building to open its first branch in the City of Virginia Beach.

Michael S. Ives, President and Chief Executive Officer of Heritage and the Bank, commented that, "We are pleased to find such a convenient location in the heart of Virginia Beach to open our first full-service branch in that city. From this new location, we will be able to serve a diverse group of retail and commercial customers in Virginia Beach. This is an exciting step forward for us as we expand our business to parts of Hampton Roads not previously served by the Bank."

Heritage has also announced that, earlier this week, Bank management determined that certain loans under a lending relationship with one borrower are impaired, as defined under generally accepted accounting principles. Heritage estimates that the amount of the impairment is approximately $369,000 and intends to increase its loan loss reserve by $369,000 to reflect this impairment. Based on its review of the Bank's records, Heritage believes that this impairment occurred during the calendar year 2004 and intends to reflect the impairment charge in its 2004 financial statements. Subsequent increases or decreases in the valuation allowance related to this impaired loan may be made as circumstances warrant.

Mr. Ives commented, "This is an unfortunate situation involving a single borrower. We are not at this time aware of any other problem loans that would appear to require additional provisions for loan losses. The Bank has had a history over the years of outstanding asset quality with low delinquency rates and negligible charge offs. We expect our revised earnings for 2004 to be very respectable even after the additional provision for loan loss."

Heritage is in the process of restating its previously issued unaudited quarterly financial statements for the quarters ended March 31, 2004, June 30, 2004 and September 30, 2004, as well as revising the financial information for the quarter and year ended December 31, 2004 included in Heritage's Form 8-K filed on January 31, 2005, for reasons related to the treatment of outstanding stock options and certain stock options exercised in 2004 and other matters. Heritage continues to make significant progress in the review and analysis of its financial results, both on an historical and a current basis, and Heritage anticipates that it will conclude its review of the aforementioned financial statements and information within the next 60 days.

Heritage has also announced that Anne Vanderberry has joined Heritage as Vice President and Controller and Debbie B. Brightbill has joined Heritage as Assistant Controller. Mrs. Vanderberry brings 18 years of public corporation experience from her prior roles as Vice President of Finance & Administration of Lafarge Calcium Aluminates and Assistant Controller of Ecolochem. Mrs. Brightbill most recently served as Senior Accountant for Dollar Tree Stores and brings 13 years of bank experience to Heritage.

Heritage Bankshares, Inc. is the parent company of Heritage Bank (http://www.heritagebankva.com). Heritage Bank has four full-service branches in the city of Norfolk and one branch in the city of Chesapeake. The Bank offers 24 hour banking at all of the Norfolk locations. Heritage Bank provides a full range of financial services including business, personal and mortgage loans, insurance, and annuities.

Forward Looking Statements

The press release contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage's actual results, performance, achievements, and business strategy to differ materially from the anticipated results, performance, achievements or business strategy expressed or implied by such forward-looking statements. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from anticipated results, performance, achievements and business strategy include: general and local economic conditions, competition, capital requirements of the planned expansion, customer demand for Heritage's banking products and services, and the risks and uncertainties described in Heritage's Form 10-KSB filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Back to Top

Heritage Bankshares, Inc. Announces Restatement of Financial Statements to Correct Certain Accounting Errors, and Late Filing of Annual Report on Form 10-KSB

Hide Press Release

Norfolk, Virginia: March 29, 2005 - Heritage Bankshares, Inc. ("Heritage") (OTC Bulletin Board: HBKS), today announced that on March 28, 2005, management concluded, and Heritage's independent auditors PFK Witt Mares, PLC ("Witt Mares") agreed, that due to certain accounting errors Heritage's financial statements for the quarters ending March 31, 2004, June 30, 2004 and September 30, 2004, as well as the financial information for the quarter and year ended December 31, 2004 included in Heritage's Form 8-K filed on January 31, 2005, should no longer be relied upon.

As of today, Heritage intends to restate its previously issued financial statements for the above-mentioned quarters of fiscal year 2004 to correct the items described below:

• The principal error resulted from a misapplication of Accounting Principles Board Opinion No. 25 - Accounting for Stock Issued to Employees ("APB 25"). When certain employees of Heritage exercised stock options in 2004, the tax benefit resulting from the option exercises was incorrectly reflected as an income tax expense reduction and, therefore, an increase in Heritage's net income. However, under APB 25, the tax benefit should not have been included in Heritage's income statement but instead should have been recorded solely as an increase in additional paid-in capital in the stockholders' equity section of the balance sheet. As a result, the income tax expense on Heritage's income statement was understated by the amount of the tax benefit and, therefore, the earnings were overstated by a commensurate amount. Heritage believes that the tax benefit is approximately $450,000, and Heritage intends to restate its previously issued financial statements for such periods to correct the accounting treatment and resultant effect on Heritage's earnings, which will show a decrease in earnings per share.
• Heritage has also concluded that the effect of outstanding dilutive common stock options has not been properly accounted for in the calculation of diluted earnings per share. Under Statement of Financial Accounting Standards No. 128 - Earnings Per Share, the application of the treasury stock method requires that the effect of dilutive common stock options be calculated in recognition of the tax benefits that would be derived if such options were exercised. Heritage has not included the effect of such tax benefits and, as a result, the diluted earnings-per-share of the company may have been slightly understated. Heritage is in the process of recalculating diluted earnings per share.

Similar but minor errors for periods prior to 2004 have been discovered; however, at this time Heritage believes that the effect of such tax benefits are relatively small.

As soon as Heritage completes its analysis and Witt Mares completes its review procedures and audit work with respect to the Form 10-KSB, Heritage will file amendments to its quarterly reports on Form 10-Q for the above-referenced periods and will file its annual report on Form 10-KSB for the fiscal year ended December 31, 2004. Heritage has also announced that, as a result of its discovery of these errors and continuing review of its financial statements for 2004 and prior periods, it will not be able to complete the preparation of its Annual Report on Form 10-KSB for the year ended December 31, 2004 within the prescribed time period (the Form 10-KSB is due March 31, 2005); accordingly, later this week Heritage will file with the Securities and Exchange Commission a Form 12b-25 "Notification of Late Filing" with respect to its Form 10-KSB.

On February 7, 2005, the Board of Directors elected Michael S. Ives as Chief Executive Officer of Heritage. John O. Guthrie was elected as Chief Financial Officer on February 15, 2005. The new management team discovered the errors in the course of reviewing the financial and accounting records in connection with the preparation of Heritage's forthcoming annual report and Form 10-KSB, and confirmed with Witt Mares that errors had been made. Chairman of the Board of Directors, Peter M. Meredith, Jr., explained that "As experience with the tax effects of the exercise of stock options shows, the accounting and regulatory issues facing small companies, including community banks, are increasingly complex. Our operating results remain strong, and we have every confidence that Mike Ives' and John Guthrie's continuing re-examination of the company's records will ensure that our restated financial statements will fairly present the financial condition of the company."

Forward Looking Statements

The press release contains statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause Heritage's actual results, performance, achievements, and business strategy to differ materially from the anticipated results, performance, achievements or business strategy expressed or implied by such forward-looking statements. Factors that could cause such actual results, performance, achievements and business strategy to differ materially from anticipated results, performance, achievements and business strategy include: general and local economic conditions, competition, capital requirements of the planned expansion, customer demand for Heritage's banking products and services, and the risks and uncertainties described in Heritage's Form 10-KSB filed with the Securities and Exchange Commission. Heritage disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Back to Top

Safe Harbor Statement:

These press releases and certain information provided periodically in writing by the Company contains certain “forward-looking statements” as defined in the federal securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and include statements regarding intent, belief or current expectation of the Company, its directors and officers with respect to, among other things: the current and long-term value of the Company, and the company’s future performance. Investors and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statement.

Make the Switch!

Transfer all of your banking needs to Heritage Bank.
Click Here for Forms.

Online Banking

Manage Your Credit Card Account

Online@Heritage Tips

In the News

We've got great rates on Home Equity Lines of Credit. You can save money and your interest may even be tax deductible.
Read More...

Please click here for an Informational Video about FDIC Protection