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

Jul 27, 2015, 10:23 ET from Farmers Bankshares, Inc.

WINDSOR, Va., July 27, 2015 /PRNewswire/ -- Farmers Bankshares, Inc. reports unaudited earnings of $904,114, or $1.48 per share for the second quarter of 2015.  These results are an increase of approximately 10% from the $818,511, or $1.34 per share, earned during the second quarter of 2014.  Net income through the first six months of the year amounted to $1,715,410 or $2.81 per share, up 9.69% from the $1,604,526 or $2.64 per share, reported through the first six months of 2014. 

Richard J. Holland, Jr., Chairman and Chief Executive Officer, stated, "By continuing to focus strategically we have been able to sustain our positive trend in earnings growth and shareholder return.  We are very pleased with this quarter's results, specifically non-interest income, as we begin to reap the benefits of the attention that has been placed on this area."

Return on average assets on an annualized basis of 0.82% for the first half of 2015 increased slightly over the first six months of 2014's results of 0.77%.  Return on average equity during the six months of 2015 was 8.80% as compared to 9.11% for the first half of the prior year. 

Net interest income increased approximately 2.00% in the first six months of 2015 compared to first six months of 2014.  Loan demand continued to hold consistent, while loans slightly increased over the prior quarter, they still remained down $2 million over December 31, 2014.  Deposit balances decreased 4.37% or $14.6 million to $328 million during the second quarter of 2015 from $343 million as of December 31, 2014.  The majority of this decrease was due to the maturity of $10 million in brokered deposits in April 2015.  The repayment of these higher costing deposits will enhance net interest income through reduced interest expense for the remainder of the year.  Non-interest bearing deposits decreased approximately $4.6 million, mainly due to the cyclical nature of several municipal deposits, and still make up approximately 25% of total deposits.  Non-interest income, exclusive of securities transactions, increased 77.04% as compared to the second quarter of 2014.  Income related to the Bank's investment in Manry Rawls, LLC contributed $166 thousand of additional year to date income in 2015 over the same period in 2014.  Service charges increased $86 thousand or 53.72% for the first six months of 2015 when compared to the same period of 2014.  Non-interest expense increased 6.00% or $315 thousand during the second quarter 2015 compared to same period in 2014.  Salaries and benefits rose 12.5% and consulting expenses increased by 70%, or $54 thousand.  The major contributing factors in non-interest expense were the consulting costs associated with strategic opportunities and talent recruiting costs.

During the quarter, Farmers Bankshares, Inc. redeemed $400 thousand of capital notes at a price of par plus accrued and unpaid interest, bringing total redemptions year to date to $1.325 million. These transactions were to accommodate investor's liquidity needs and reduce our debt service obligations.  Even with this transaction, capital ratios at the Bank level remain strong and well above regulatory requirements for "Well Capitalized" financial institutions. 

"While loan growth has remained stagnant we have been able to meaningfully impact net income through other means.  The reduction in our brokered deposits will help our margin to improve and become more in line with peer.  Our devotion to improving non-interest income has proven successful and has helped to offset extraordinary non-interest expenses this year.  Although non-interest expenses have increased over the prior year, these outflows should position us for more efficient and effective operations in the future," stated Vernon M. Towler, President. 

The common stock of Farmers Bankshares, Inc. trades on the NASDAQ market as an Over-the-Counter Bulletin Board stock under the symbol FBVA. Any stockbroker can assist with purchases of the company's stock, as well as with sales of holdings.

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

 

Farmers Bankshares, Inc. 

Consolidated Balance Sheets

($ in thousands)






6/30/2015


12/31/2014

Assets

(Unaudited)



Total cash & due from banks

$        9,949


$      18,947

Federal funds sold

657


8,632

Total investments

144,676


136,634

Mortgage loans held for sale

648


986





Loans held for investment

245,435


247,507

Allowance for loan losses

(7,784)


(8,182)

Total net loans 

237,651


239,325





Premises and equipment, net

3,675


3,806

Other real estate owned 

613


1,499

Total other assets

13,450


16,962





Total assets

$411,319


$426,791





Liabilities & Stockholders' Equity




Deposits




Non-interest bearing 

$      81,460


$      86,085

Other transaction 

144,404


142,068

Certificates of deposit

102,188


114,656

Total deposits

328,052


342,809





Repurchase agreements

1,071


1,930

Capital notes

9,928


11,253

FHLB borrowings

30,000


30,000

Total other borrowings 

40,999


43,183





Total other liabilities

3,397


2,824





Total liabilities

372,448


388,816





Preferred stock 

-


-

Common stock 

382


383

Capital surplus

2,666


2,723

Retained earnings

33,296


31,849

Unrealized gain on securities

2,527


3,020

Total stockholders' equity

38,871


37,975





Total liabilities & stockholders' equity

$411,319


$426,791

 

 

Farmers Bankshares, Inc. 

Consolidated Income Statement

For the six Months Ended June 30, 






2015


2014

Interest income 

(Unaudited)

Interest on loans

$     5,970,344


$     5,846,259

Interest on mortgage loans held for sale

9,101


-

Interest on federal funds sold

20,619


25,444

Interest on investments

2,014,449


2,106,245

Total interest income

8,014,513


7,977,948





Interest expense




Interest on deposits

870,248


1,012,771

Interest on borrowings

350,040


296,964

Interest on capital notes

266,805


282,900

Total interest expense

1,487,093


1,592,635





Net interest income 

6,527,420


6,385,313

Provision for loan losses

-


-

Net interest income after provision 

6,527,420


6,385,313





Non-interest income




Service charges

244,673


159,166

Other fee income

16,020


11,937

Other income

847,173


432,742

Gain on sale of fixed assets

-


21,921

Gain on disposition of investments

53,784


288,848

Total non-interest income

1,161,650


914,614





Non-interest expense




Salaries & employee benefits

3,024,625


2,686,589

Occupancy & equipment

624,130


680,069

FDIC insurance

127,070


158,933

Data processing 

420,744


408,567

Other non-interest expense 

1,357,117


1,304,739

Total non-interest expense

5,553,686


5,238,897





Income before income taxes

2,135,384


2,061,030

Income tax expense

419,974


456,504





Net income

$1,715,410


$1,604,526

 

 

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SOURCE Farmers Bankshares, Inc.



RELATED LINKS

http://www.farmersbankva.com