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

WINDSOR, Va., July 24, 2020 /PRNewswire/ -- Farmers Bankshares, Inc. (OTC-PINK: FBVA) reports unaudited earnings of $1.3 million, or $0.42 per share, for the second quarter of 2020.  These results are in line with the $1.3 million, or $0.42 per share, earned during the second quarter of 2019. 

Return on average assets on an annualized basis was 0.96% for the second quarter of 2020, a decrease from 1.15% for the second quarter of 2019.  Return on average equity during the second quarter of 2020 was 7.94% as compared to 10.38% for the second quarter of 2019.  Return on average tangible common equity (1) was 9.64% for the period ended June 30, 2020 and compared to 12.83% for the period ended June 30, 2019. 

Net loans have increased $25.9 million, or 9.92%, as compared to December 31, 2019.  The increase was primarily driven by loans associated with the Company's participation in the CARES Act's Paycheck Protection Program ("PPP").   The Bank serviced customers through the PPP with 257 loans totaling approximately $24.9 million processed through the end of the second quarter.   Deposit balances have increased by $42.1 million to $427.6 million as of June 30, 2020 from $385.5 million as of December 31, 2019.  Non-interest bearing deposits increased by $25.0 million and make up approximately 33.04% of total deposits.  Customer stimulus payments and PPP loan fundings both contributed to this increase in deposits.  Net interest income decreased 3.03% when comparing the second quarter of 2020 to the second quarter of 2019.   Net interest margin for the second quarter decreased to 3.47%, including PPP and 3.55% excluding PPP, when compared to the second quarter of 2019 of 3.85%.   This reduction is primarily due to the impact of significantly lower market interest rates since the second quarter of 2019 and the rate associated with loans originated through the PPP.       

"I am pleased with our financial results for the first half of 2020, especially given the current interest rate environment and challenging economic situation.   I am most proud of the way our entire team have shown a new level of commitment and support for our customers and communities while navigating these unparalleled times.  Being a community bank, we strive to be flexible to meet the changing needs of our customers and present conditions have proven we are able to do that.  We successfully opened our branch in the Pungo area of Virginia Beach during the second quarter and are very encouraged with the reception from that community." said Vernon M. Towler, President and Chief Executive Officer. 

Non-interest income through the second quarter of 2020 was approximately $4.3 million and was increased by 9.61% over the same period in the prior year due primarily to increased insurance revenues from Manry Rawls Insurance and our investment in Tidewater Home Funding.  Non-interest expense decreased by 2.61% during the second quarter 2020 compared to same period in 2019.  This decrease was partially due to deferred salary costs related to participation in the PPP and reduced marketing expenses after celebrating our 100^th anniversary in the prior year.  Provision for loan losses of $526 thousand was added during the second quarter, bringing year to date provisions to $651 thousand for 2020 compared to $0 for the same period in 2019.  Our allowance for loan losses was 2.11% of gross loans as of June 30, 2020, including loans originated through the PPP, and 2.30% of gross loans excluding loan originated through the PPP (1).  Of the $37.6 million in loans that were on a payment deferral plan as of the end of the first quarter of 2020, $36.6 million have returned to a normal payment schedule as of June 30, 2020. 

"We remain committed to managing our balance sheet in a manner that enables us to meet our long-term strategic goals while providing shareholders a competitive rate of return.  A large deposit repriced, to lower current market rates, during the second quarter and helped to stabilize net interest margin when compared to the first quarter of 2020.  While our credit metrics remain very healthy and have shown little deterioration, we did increase loan loss reserves during the second quarter to account for the high level of economic uncertainty.  Consistent returns from our insurance subsidiary and favorable results from our mortgage partnership also contributed positively to second quarter earnings. Liquidity and capital levels remain strong and position us well for future opportunities." stated Kristy DeJarnette, Chief Financial Officer.

Farmers Bank, founded in 1919, is headquartered in Windsor, VA, and is a community bank which operates eight 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.

SOURCE Farmers Bankshares, Inc.

Related Links

http://www.farmersbankva.com

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED