Farmers Bankshares, Inc. Reports First Quarter and Year-to-Date Earnings

WINDSOR, Va., April 20, 2016 /PRNewswire/ -- Farmers Bankshares, Inc. reports unaudited earnings of $943,680, or $0.31 per share for the first quarter of 2016.  These results are increased approximately 16% from the $811,296, or $0.27 per share, earned during the first quarter of 2015. 

Richard J. Holland, Jr., Chairman and Chief Executive Officer, stated, "We are optimistic about the Bank's performance in 2016.  We developed a pace in 2015 which we hope to sustain.  Our strategic initiatives will help to enhance shareholder value while continuing to serve our customers and contribute, in a meaningful way to our surrounding communities."

Return on average assets on an annualized basis of 0.90% for the first quarter of 2016 is improved from the first quarter of 2015 of 0.76%.  Return on average equity during the first quarter of 2016 was 9.04% as compared to the prior year first quarter of 8.42%. 

Loan demand held consistent, as net loans increased by $580 thousand as compared to December 31, 2015.  Deposit balances decreased $1.1 million or less than 1% to $335 million in the first quarter of 2016 from $336 million as of December 31, 2015.  Non-interest bearing deposits decreased 2.89% over December 31, 2015 but still make up approximately 28% of total deposits. The slight decrease in deposits is largely due to the cyclical nature of several large municipal deposits.  Net interest income increased 7.94% in the first quarter of 2016 compared to first quarter of 2015, largely due to the decrease in funding costs.  Non-interest income, exclusive of securities transactions, decreased 9% from first quarter 2015, as a result of a decrease in income from the Bank's investment in Manry Rawls, LLC.  Service charges increased $42 thousand or 34.88% when compared to the first quarter of 2015.  Non-interest expense remained consistent, only increasing by $26 thousand during the first quarter 2016 compared to same period in 2015. 

In March 2016, Farmers Bankshares, Inc. redeemed $475 thousand of capital notes at a price of 102%, plus accrued and unpaid interest.  This transaction was to accommodate investor's liquidity needs and reduce our debt service obligations.  Management and the Board plan to execute a mandatory redemption of approximately $1.5 million of the remaining capital notes during the second quarter of 2016, pending regulatory approval.   Capital ratios at the Bank level remain strong and well above regulatory requirements for "Well Capitalized" financial institutions. 

"We are extremely excited about our focus for 2016.  We expect to have our loan production office open in the Greenbrier section of Chesapeake during the second quarter.  The lender we have positioned to serve that area is well-known and passionate about offering Farmers Bank's products and services to businesses and consumers in Chesapeake.  We believe the recent consolidations of local banks will open the door for traditional community banking in this part of Hampton Roads.  Further, we believe customers can benefit from the personal attention we are able to offer" stated Vernon M. Towler, President. 

Farmers Bank, founded in 1919, is headquartered in Windsor, VA, and is a community bank which operates six branches and services areas throughout Tidewater Virginia.  Additional information is available at the company's website, www.farmersbankva.com.

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SOURCE Farmers Bankshares, Inc.

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http://www.farmersbankva.com