Reports Record Earnings for 2019
WINDSOR, VA, February 7, 2020 – Farmers Bankshares, Inc. (OTC-PINK: FBVA) reports unaudited earnings of $921,118, or $0.30 per share for the fourth quarter of 2019, compared to $1,464,312, or $0.48 per share, earned during the fourth quarter of 2018. The Company posted record earnings for the year, which amounted to $5,096,105 or $1.65 per share, which is a 6.47% increase from the $4,875,252 or $1.59 per share, reported for 2018.
Return on average assets of 1.10% for 2019 has improved from the 2018 results of 1.07%. Return on average equity as of December 31, 2019 was 9.49% as compared to 10.31% for the same period of the prior year. Return on average tangible common equity (1) was 11.27% as of December 31, 2019 and compared to 12.51% as of December 31, 2018.
Vernon M. Towler, President and Chief Executive Officer, stated, “I am pleased to report we ended our 100th year with strong financial results. We received several large loan payoffs in the fourth quarter that occurred in the normal course of business. This influx of cash and our growth in average non-interest bearing deposits has allowed us to remain disciplined with deposit rates. It also gave us the ability to repay $10 million in Federal Home Loan bank borrowings that were maturing with rates higher than current market rates. Like many financial institutions, margin compression will be a focus in 2020, however we remain optimistic as we enter the Virginia Beach market. We have purchased a permanent location in the southern end of Virginia Beach and received regulatory approval to open a temporary location by the beginning of the second quarter of 2020. We believe this market has an unmet need and we are excited to expand our brand of community banking to these consumers and businesses.”
Net loans in the fourth quarter of 2019 decreased by $8.5 million or 3.14% as compared to December 31, 2018. Deposit balances have remained stable, beginning and ending the year at approximately $386.6 million. Non-interest bearing deposits increased by $660 thousand or 0.57% from December 31, 2018 and make up approximately 30.14% of total deposits.
Net interest income was positively impacted by the rise in interest rates during the first half of 2019 and increased 3.26% when compared to annualized results of 2018. Non-interest income, exclusive of securities gains, totaled $7.4 million in 2019 and increased by 20.77% over the same period in the prior year. The growth in non-interest income is largely due to additional insurance commissions from an acquisition completed in January 2019. Non-interest expense increased by approximately $1.6 million or 1.06% through the fourth quarter of 2019 compared to same period in 2018. This increase was driven primarily by employee expenses related to the same insurance acquisition, marketing expenses in the fourth quarter related to the recognition of our one-hundredth anniversary and our investment in infrastructure and talent associated with our growth into the Virginia Beach market. Overall, our investment in Manry Rawls Insurance added $612 thousand dollars to the Company’s net income, which is increased over last year’s total of $440 thousand.
Capital ratios at the Bank level remain strong and well above regulatory requirements for “Well Capitalized” financial institutions.
Richard “Dick” J. Holland, Jr., Chairman, stated, “I am proud of the financial results achieved during 2019, our 100th year. The success Farmers Bank has enjoyed over the years is a testament to the loyalty and support of our customers, shareholders and dedicated staff. At the end of 2019, as previously announced, I retired as Chief Executive Officer. Vernon Towler, the bank’s President since 2012, assumed the role of CEO January 1st. I have worked closely with Vernon over the last 13 years and have great confidence in his ability and commitment to grow and lead the bank while adhering to the values that have guided the organization since its founding. I look forward to continuing as Chairman of the Board and working to support Vernon and his team as they lead Farmers Bank into the next 100 years.”
- Non-GAAP financial measure. This calculation excludes goodwill and intangibles.
Farmers Bank, founded in 1919, is headquartered in Windsor, VA, and is a community bank which operates seven branches and services areas throughout Tidewater Virginia. Additional information is available at the company’s website, www.farmersbankva.com.
The common stock of Farmers Bankshares, Inc. trades as an Over-the-Counter Bulletin Board stock under the symbol FBVA. Any stockbroker can assist with purchase of the company’s stock, as well as with sales of holdings.