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EXHIBIT 99.1

Southern National Bancorp of Virginia Inc. Reports Earnings of $1.3 Million for the Second Quarter and $2.4 Million for the First Half of 2011

MCLEAN, Va., July 28, 2011 (GLOBE NEWSWIRE) -- Southern National Bancorp of Virginia Inc. (Nasdaq:SONA), the holding company for Sonabank, announced today that net income for the quarter ended June 30, 2011 was $1.3 million and $2.4 million for the first half of 2011. That compares to $1.0 million and $2.1 million for the three and six months ended June 30, 2010.

Net Interest Income

Net interest income was $6.2 million in the quarter ended June 30, 2011 down slightly from $6.4 million during the same period last year. The accretion of the discount on Greater Atlantic Bank's loans contributed $437 thousand to second quarter 2011 net interest income compared to $635 thousand during the second quarter of 2010. Sonabank's net interest margin was 4.73% in the second quarter of 2011 compared to 4.70% during the comparable quarter last year and 4.77% during the first quarter of 2011.

Net interest income was $12.4 million during the six months ended June 30, 2011, compared to $12.7 million during the comparable period in the prior year. Average loans during the first six months of 2011 were $461.6 million compared to $460.5 million during the same period last year. The Greater Atlantic Bank loan discount accretion contributed $1.0 million during the first half of 2011, compared to $1.3 million during the same period in 2010.

Noninterest Income

During the second quarter of 2011 Sonabank had noninterest income of $1.0 million compared to noninterest income of $535 thousand during the second quarter of 2010. The increase was largely attributable to an $800 thousand insurance benefit resulting from the death of an officer covered by bank-owned life insurance.

Noninterest income increased to $1.4 million in the first six months of 2011 from $1.1 million in the first six months of 2010. Again, the most important factor in the increase was the death benefit described above. This was partially offset by a decrease of $191 thousand in fees on letters of credit related to a short-term letter of credit which expired in June 2010. Also, during the first six months of 2011, there were net losses on other real estate owned ("OREO") of $147 thousand compared to gains of $39 thousand during the six months ended June 30, 2010. There were other than temporary impairment ("OTTI") charges of $70 thousand during the first six months of 2011, compared to $10 thousand for the same period last year.

Noninterest Expense

Noninterest expenses were $3.5 million and $6.9 million during the second quarter and the first half of 2011, respectively, compared to $4.0 million and $8.0 million during the same periods in 2010. During the three and six months ended June 30, 2011, there was accretion of the FDIC indemnification asset of $192 thousand and $351 thousand, respectively. During the second quarter and first six months of 2010 the accretion was more than offset by charges to the FDIC indemnification asset due to impaired covered loans that paid off.

Loan Portfolio

The composition of Sonabank's loan portfolio consisted of the following at June 30, 2011 and December 31, 2010:

  Covered 
Loans
Non-covered
Loans
Total
Loans
 Covered
Loans
Non-covered
Loans
Total
Loans
  June 30, 2011 December 31, 2010
 Mortgage loans on real estate:             
 Commercial real estate -- owner-occupied   $ 4,703  $ 94,137  $ 98,840  $ 5,246  $ 81,487  $ 86,733
 Commercial real estate -- non-owner-occupied   10,412  87,323  97,735  13,898  76,068  89,966
 Secured by farmland   --   3,503  3,503  --   3,522  3,522
 Construction and land loans   849  33,599  34,448  1,098  39,480  40,578
 Residential 1-4 family   27,615  54,562  82,177  29,935  58,900  88,835
 Multi- family residential   553  22,227  22,780  563  19,177  19,740
 Home equity lines of credit   37,954  9,308  47,262  40,287  10,532  50,819
 Total real estate loans   82,086  304,659  386,745  91,027  289,166  380,193
             
 Commercial loans   713  88,251  88,964  998  76,644  77,642
 Consumer loans   136  1,997  2,133  146  2,010  2,156
 Gross loans   82,935  394,907  477,842  92,171  367,820  459,991
             
 Less unearned income on loans   --   (855)  (855)  --   (554)  (554)
 Loans, net of unearned income   $ 82,935  $ 394,052  $ 476,987  $ 92,171  $ 367,266  $ 459,437
             

Total loans were $477.0 million at June 30, 2011 up from $459.4 million at December 31, 2010. The change was the net of an increase of $26.8 million in the non-covered portfolio partially offset by a $9.2 million decline in the covered portfolio resulting from payoffs and liquidations.

Net charge-offs during the second quarter of 2011 were $1.9 million as credit quality continued to be a challenge for our loan portfolio. The largest component of the charge-off was related to a loan on an estate in Charlottesville on which the guarantor experienced financial difficulties in his business. We've placed this loan on non-accrual and also recognized a charge-off to its current assessed value. The remaining charge-offs were divided among 11 other loans, reflecting deep seated problems in our economy.

The allowance for loan losses was 1.54% of non-covered loans on June 30, 2011 compared to 1.52% as of December 31, 2010. Sonabank has an internal loan review and a loan committee, both of which provide on-going monitoring to identify and address issues with problem loans. The loan loss provision is determined after consideration of all known relevant internal and external factors affecting loan collectability to maintain the allowance for loan and lease losses at a level necessary to absorb inherent and estimated credit losses.  The provision for loan losses was $2.25 million for the quarter ended June 30, 2011 compared to $1.45 million for the second quarter of 2010. 

Securities Portfolio

Investment securities, available for sale and held to maturity, were $50.8 million at June 30, 2011 and $56.0 million at December 31, 2010.

At June 30, 2011 Southern National Bancorp owned pooled trust preferred securities as follows:

    Ratings                
    When Purchased Current Ratings          
Security Tranche Level Moody's Fitch Moody's Fitch Par Value Book Value Estimated
Fair
Value
Current
Defaults and
Deferrals 
 Previously Recognized
Cumulative Other
Comprehensive Loss (1) 
 
            (in thousands)      
ALESCO VII A1B Senior Aaa AAA Baa3 BB  $ 7,174  $ 6,420  $ 4,189  $ 209,056  $ 310  
MMCF II B Senior Sub A3 AA- Baa2 BB  493  455  477  34,000  38  
MMCF III B Senior Sub A3 A- Ba1 CC  652  637  408  37,000  14  
             8,319  7,512  5,074    $ 362  
                       
Other Than Temporarily Impaired:                   Cumulative
Other Comprehensive
Loss (2)
Cumulative
OTTI Related to
Credit Loss (2) 
TPREF FUNDING II Mezzanine A1 A- Caa3 C  1,500  496  496  131,100  693  $ 311
TRAP 2007-XII C1 Mezzanine A3 A C C  2,066  127  352  155,705  1,360  579
TRAP 2007-XIII D Mezzanine NR A- NR C  2,032  --   38  231,250  --   2,032
MMC FUNDING XVIII Mezzanine A3 A- Ca C  1,050  132  132  111,682  444  474
ALESCO V C1 Mezzanine A2 A Ca C  2,083  461  537  117,942  961  661
ALESCO XV C1 Mezzanine A3 A- C C  3,112  29  159  266,100  524  2,559
ALESCO XVI C Mezzanine A3 A- Ca C  2,072  115  440  149,900  777  1,180
             13,915  1,360  2,154    $ 4,759  $ 7,796
                       
Total            $ 22,234  $ 8,872  $ 7,228      
                       
                       
(1) Pre-tax, and represents unrealized losses at date of transfer from available-for-sale to held-to-maturity, net of accretion
(2) Pre-tax                      

Each of these securities has been evaluated for other than temporary impairment. In performing a detailed cash flow analysis of each security, Sonabank works with independent third parties to estimate expected cash flows and assist with the evaluation of other than temporary impairment. The cash flow analyses performed included the following assumptions:

  • We assume that .5% of the remaining performing collateral will default or defer per annum.
  • We assume recoveries ranging from 25% to 47% with a two year lag on all defaults and deferrals.
  • We assume no prepayments for 10 years and then 1% per annum for the remaining life of the security. 
  • Additionally banks with assets over $15 billion will no longer be allowed to count down streamed trust preferred proceeds as Tier 1 capital (although it will still be counted as Tier 2 capital). That will incent the large banks to prepay their trust preferred securities if they can or if it is economically desirable. As a consequence we have projected in all of our pools that 25% of the collateral issued by banks with assets over $15 billion will prepay in 2013.
  • Our securities have been modeled using the above assumptions by independent third parties using the forward LIBOR curve to discount projected cash flows to present values.

These assumptions resulted in OTTI charges related to credit on two of the trust preferred securities in the amount of $38 thousand during the quarter ended June 30, 2011, compared to no OTTI charges related to credit on the trust preferred securities for the quarter ended June 30, 2010. Events within these two structures which attributed to a decline in our expectations of cash flows included an issuer that had previously deferred interest payments, had resumed payments, then deferred again, and there was a large redemption during the second quarter of 2011 which negatively affected our subordinate tranche because the senior tranche received the payment. 

We also own $1.0 million of SARM 2005-22 1A2. This residential collateralized mortgage obligation was originally rated AAA by Standard and Poors. After a series of downgrades this security has been other than temporarily impaired in past reporting periods. For the second quarter of 2011 and based on our review of the trustee report, shock analysis and current information regarding delinquencies, nonperforming loans and credit support it has been determined that no OTTI charge for credit was required for the quarter ended June 30, 2011. The assumptions used in the analysis included a 4.7% prepayment speed, 14% default rate, a 50% loss severity and an accounting yield of 2.55%. We recorded OTTI charges for credit on this security of $3 thousand in the second quarter of 2010.  

Deposits

Total deposits were $434.0 million at June 30, 2011 compared to $431.0 million at December 31, 2010. Certificates of deposit increased $32.2 million during the first six months of 2011. This was partially offset by a decrease in money market accounts of $27.9 million during the six months ended June 30, 2011. We had paid rates in excess of market on large money market accounts for former Greater Atlantic Bank customers to retain them during 2010, and as of the beginning of 2011, we reduced those rates. Brokered certificates of deposit have decreased from $27.0 million at December 31, 2010, to $22.0 million as of June 30, 2011. Noninterest-bearing deposits were $33.9 million at June 30, 2011 and $34.5 million at December 31, 2010.

Stockholders' Equity

Total stockholders' equity increased from $99.1 million as of December 31, 2010 to $101.8 million at June 30, 2011 as a result of the retention of earnings. Our Tier 1 Risk Based Capital Ratios were 20.41% and 19.66% for Southern National Bancorp of Virginia, Inc.and Sonabank, respectively, as of June 30, 2011.

Southern National Bancorp is a financial holding company with assets of $601.4 million at June 30, 2011. Sonabank provides a range of financial services to individuals and small and medium sized businesses. Sonabank has 13 branches in Virginia, located in Fairfax County (Reston, McLean and Fairfax), in Charlottesville, Warrenton (2), Middleburg, Leesburg (2), South Riding, Front Royal, New Market and Clifton Forge, and one branch in Rockville, Maryland.

Three weeks ago we announced that we had executed a definitive agreement to purchase a branch owned by Bank of Hampton Roads (previously Gateway Bank) in Midlothian, Virginia. That purchase is expected to close in the fourth quarter of 2011.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that relate to future events or the future performance of Southern National Bancorp of Virginia, Inc. Forward-looking statements are not guarantees of performance or results. These forward-looking statements are based on the current beliefs and expectations of the respective management of Southern National Bancorp of Virginia, Inc. and Sonabank and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond their respective control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. Actual results may differ materially from the anticipated results discussed or implied in these forward-looking statements because of numerous possible uncertainties. Words like "may," "plan," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "will," and similar expressions, should be considered as identifying forward-looking statements, although other phrasing may be used. Such forward-looking statements involve risks and uncertainties and may not be realized due to a variety of factors. Additional factors that could cause actual results to differ materially from those expressed in the forward-looking statements are discussed in the reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q) filed by Southern National Bancorp of Virginia, Inc. You should consider such factors and not place undue reliance on such forward-looking statements. No obligation is undertaken by Southern National Bancorp of Virginia, Inc. to update such forward-looking statements to reflect events or circumstances occurring after the issuance of this press release.

Southern National Bancorp of Virginia, Inc.
McLean, Virginia
     
Condensed Consolidated Balance Sheets
(Unaudited)
(in thousands)    
     
  June 30,
2011
December 31,
2010
Assets    
Cash and cash equivalents  $ 3,686  $ 9,745
Investment securities-available for sale  10,751  11,068
Investment securities-held to maturity  40,021  44,895
Stock in Federal Reserve Bank and Federal Home Loan Bank  5,972  6,350
Loans receivable, net of unearned income  476,987  459,437
Allowance for loan losses  (6,063)  (5,599)
Net loans  470,924  453,838
Intangible assets  11,168  11,628
Bank premises and equipment, net  4,691  4,659
Bank-owned life insurance  14,310  14,568
FDIC indemnification asset  18,088  18,536
Other real estate owned  9,613  4,577
Other assets  12,163  10,960
Total assets  $ 601,387  $ 590,824
     
Liabilities and stockholders' equity    
Noninterest-bearing deposits  $ 33,917  $ 34,529
Interest-bearing deposits  400,074  396,445
Securities sold under agreements to repurchase and other short-term borrowings  19,968  23,908
Federal Home Loan Bank advances  43,500  35,000
Other liabilities  2,128  1,828
Total liabilities  499,587  491,710
Stockholders' equity  101,800  99,114
Total liabilities and stockholders' equity  $ 601,387  $ 590,824
 
Condensed Consolidated Statements of Income
(Unaudited)
 (in thousands)        
         
  For the Quarters Ended
June 30,
For the Six Months Ended
June 30,
  2011 2010 2011 2010
         
Interest and dividend income  $ 7,743  $ 8,561  $ 15,472  $ 16,952
Interest expense  1,516  2,120  3,111  4,250
Net interest income  6,227  6,441  12,361  12,702
Provision for loan losses  2,250  1,450  3,590  2,750
Net interest income after provision for loan losses  3,977  4,991  8,771  9,952
Account maintenance and deposit service fees  218  235  418  476
Income from bank-owned life insurance  933  137  1,067  276
Gain (loss) on other real estate owned, net  (108)  19  (147)  39
Net impairment losses recognized in earnings  (38)  (4)  (70)  (10)
Other   44  148  89  293
Noninterest income   1,049  535  1,357  1,074
Employee compensation and benefits  1,705  1,523  3,308  3,164
Occupancy expenses  685  678  1,360  1,374
FDIC assessment  119  212  272  401
Change in FDIC indemnification asset  (192)  406  (351)  650
Other expenses  1,176  1,208  2,358  2,416
Noninterest expense  3,493  4,027  6,947  8,005
Income before income taxes  1,533  1,499  3,181  3,021
Income tax expense   222  474  750  955
Net income  $ 1,311  $ 1,025  $ 2,431  $ 2,066
 
Financial Highlights
(Unaudited)
(Dollars in thousands except per share data)        
         
  For the Quarters Ended
June 30,
For the Six Months Ended
June 30,
  2011 2010 2011 2010
         
Per Share Data :        
Earnings per share - Basic  $ 0.11  $ 0.09  $ 0.21  $ 0.18
Earnings per share - Diluted  $ 0.11  $ 0.09  $ 0.21  $ 0.18
Book value per share      $ 8.78  $ 8.57
Tangible book value per share      $ 7.82  $ 7.53
Weighted average shares outstanding - Basic  11,590,212  11,590,212  11,590,212  11,590,212
Weighted average shares outstanding - Diluted  11,591,216  11,594,418  11,592,525  11,593,706
Shares outstanding at end of period      11,590,212  11,590,212
         
Selected Performance Ratios and Other Data:        
Return on average assets 0.89% 0.67% 0.83% 0.68%
Return on average equity 5.19% 4.19% 4.87% 4.27%
Yield on earning assets 5.88% 6.25% 5.94% 6.22%
Cost of funds 1.33% 1.79% 1.38% 1.80%
Cost of funds including non-interest bearing deposits 1.24% 1.68% 1.29% 1.68%
Net interest margin 4.73% 4.70% 4.75% 4.66%
Efficiency ratio (1) 52.75% 57.85% 52.89% 58.23%
Net charge-offs (recoveries) to average loans 0.40% 0.31% 0.68% 0.54%
Amortization of intangibles  $ 230  $ 236  $ 460  $ 472
         
      As of
      June 30,
2011
December 31,
2010
         
Stockholders' equity to total assets     16.93% 16.78%
Tier 1 risk-based captial ratio     20.41% 20.52%
Intangible assets:        
Goodwill      $ 8,713  $ 8,713
Core deposit intangible      2,455  2,915
 Total      $ 11,168  $ 11,628
         
Non-covered loans and other real estate owned (2):        
Nonaccrual loans (3)      $ 7,619  $ 9,585
Loans past due 90 days and accruing interest      --   -- 
Other real estate owned      8,895  3,901
Total nonperforming assets       $ 16,514  $ 13,486
Allowance for loan losses to total non-covered loans     1.54% 1.52%
Nonperforming assets to total non-covered assets     3.19% 2.71%
Nonperforming assets excluding SBA guaranteed loans to total non-covered assets 2.81% 2.43%
Nonperforming assets excluding SBA guaranteed loans to total non-covered loans and OREO 3.61% 3.25%
         
(1) Excludes gains and write-downs on OREO, gains on sale of loans, gains/losses on sale of securities, impairment losses recognized in earnings and nonrecurring income on bank-owned life insurance.
(2) Applies only to non-covered Sonabank loans and other real estate owned.      
(3) Nonaccrual loans include SBA guaranteed amounts totaling $2.0 million and $1.4 million at June 30, 2011 and December 31, 2010, respectively.
CONTACT: R. Roderick Porter, President
         Phone: 202-464-1130 ext. 2406
         Fax: 202-464-1134
         Southern National Bancorp of Virginia Inc.
         NASDAQ Symbol SONA
         Website: www.sonabank.com