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,” statedVernon 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.