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

WINDSOR, Va., April 25, 2017 /PRNewswire/ -- Farmers Bankshares, Inc. (OTC-PINK: FBVA) reports unaudited earnings of $1.3 million, or $0.42 per share for the first quarter of 2017.  These results are increased approximately 16% from the $943.7 thousand, or $0.31 per share, earned during the first quarter of 2016. 

Return on average assets on an annualized basis of 1.23% for the first quarter of 2017 is improved from the first quarter of 2016 of 0.90%.  Return on average equity during the first quarter of 2017 was 12.00% as compared to the prior year first quarter of 9.04%. 

Farmers Bankshares, Inc. redeemed the remaining $7.89 million of capital notes as of March 31, 2017.  Capital notes totaling $6 million, bearing an interest rate of 3.25% were issued on the same day and will mature in March of 2022.  These transactions will reduce the Company's debt service obligations applicable to the capital notes by approximately fifty percent annually. Capital ratios at the Bank level remain strong and well above regulatory requirements for "Well Capitalized" financial institutions. 

Richard J. Holland, Jr., Chairman and Chief Executive Officer, stated, "The repayment and issuance of capital notes will continue to lower our interest expense, while allowing capital levels to remain healthy and able to support future growth and expansion.  We began 2017 knowing that non-interest expenses would increase because of our investment in the new Chesapeake branch; however we are pleased with the team's progress and look forward to cultivating the relationships in this market."  

In February of 2017 the Company entered into an agreement to purchase a 15% ownership in Tidewater Home Funding, LLC, a licensed mortgage lender headquartered in Chesapeake, Virginia.  The Bank paid $473,850 for the Class B Membership Interest and $350,000 for the Class A Membership Interest.  The Class A Membership Interest bears interest at a rate of 6.00% annually. 

Loan demand held consistent, as net loans decreased slightly by $1.36 million as compared to December 31, 2016.  Deposit balances increased by $3.5 million to $347.4 million in the first quarter of 2017 from $343.9 million as of December 31, 2016.  Non-interest bearing deposits decreased approximately $3.1 million from December 31, 2016 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 4.58% in the first quarter of 2017 compared to first quarter of 2016, equally due to the decrease in funding costs and increase in average loans outstanding.  Non-interest income in the first quarter of 2017 was approximately $1.1 million and was increased by 104% over the same period in the prior year.  This increase included a pre-tax, non-recurring gain on the sale of other real estate owned of approximately $590 thousand.   Non-interest expense increased by approximately $210 thousand during the first quarter 2017 compared to same period in 2016, largely due to expenses related to our expansion into the Chesapeake market and costs associated with transitioning our mortgage operations to Tidewater Home Funding, LLC. 

"We have accomplished several initiatives during the first quarter of 2017 that will strengthen our franchise value and continue to help expand the Farmers Bank brand.  The investment in Tidewater Home Funding will streamline our mortgage process and still offer our customers a diversified group of mortgage products.  This partnership will further our ties with the Chesapeake and eastern Tidewater communities and offer additional non-interest income" stated Vernon M. Towler, President. 

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 on the NASDAQ market 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.

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/farmers-bankshares-inc-reports-first-quarter-and-year-to-date-earnings-300445256.html

SOURCE Farmers Bankshares, Inc.