WARRENTON, Va., July 28 /PRNewswire-FirstCall/ -- Fauquier Bankshares, Inc. (Nasdaq: FBSS) today reported net income of $1,010,000, or $0.28 per diluted share for the quarter ended June 30, 2010 as compared with $724,000, or $0.20 per diluted share for the same quarter in 2009, representing a increase of 39.6%. The $287,000 increase in net income for the quarter was primarily attributable to several items, the most significant being the increase in net interest income of $409,000 and $215,000 decrease in FDIC expense. These were partially offset by the increase in salary and benefits and occupancy expense, due primarily to the addition of new branches in Bristow and Haymarket.
For the six months ended June 30, 2010, net income was $1,814,000, or $0.50 per diluted share, compared with $1,647,000, or $0.46 per diluted share for the first six months of 2009, an increase of 10.1%. The increase in net income for the first six months of 2010 compared to the first six months of 2009 was primarily related to the same factors that caused the increase in quarterly income.
Randy K. Ferrell, president and chief executive officer, said, "We are happy to report the most profitable quarter since December 2007. It is also important to note that our net interest income for the most recent six months increased almost $1 million or about 10 percent compared to the same period last year. The growth in net interest income is a direct result of our ability to generate new loans in our communities," Ferrell said, "and grow our deposits in both new and existing accounts. Our new branches have made major contributions to our nearly 20% annual deposit growth."
Loans, net of reserve, totaling $462.7 million at June 30, 2010, increased 2.3% when compared with June 30, 2009. Deposits, totaling $492.8 million at June 30, 2010, increased 19.4% when compared with June 30, 2009. At June 30, 2010 transaction accounts (Demand and NOW) totaled $175.5 million compared with $132.9 million at June 30, 2009, an increase of 32.08%.
The net interest margin for the second quarter of 2010 was 4.10% compared with 4.23% for the same quarter in 2009. Return on average assets (ROAA) was 0.69% and return on average equity (ROAE) was 9.28% for the second quarter of 2010, an increase from 0.55% and 7.02%, respectively, from the second quarter of 2009. For the six-month period ended June 30, 2010, Fauquier Bankshares' return on average assets was 0.64% and return on average equity was 8.22%, compared with 0.64% and 7.94%, respectively, for the six month period ended June 30, 2009.
Ferrell said, "While we take a somewhat cautious view in addressing the uncertain conditions of our economy, we continue to look for sound loan opportunities. Loan demand has moderated, but we are confident that as the economy improves, loan demand will increase and we will continue to serve our borrowing customers as needed."
The provision for loan losses was $750,000 for the first six months of 2010 compared with $560,000 for the first six months of 2009. Loan charge offs, net of recoveries, totaled $835,000 or 0.18% of total average loans for the first six months of 2010, compared with $249,000 or 0.06% of total average loans for the first six months of 2009. Total allowance for loan losses was $5.4 million or 1.15% of total loans at June 30, 2010 compared with $5.5 million or 1.16% of loans at March 31, 2010 and $5.1 million or 1.11% of loans at June 30, 2009.
The Bank's non-performing assets totaled $6.5 million or 1.12% of period end total assets at June 30, 2010, as compared with $7.3 million or 1.29% of period end total assets at March 31, 2010, and $3.2 million or 0.61% of period end total assets at June 30, 2009. Included in non-performing assets at June 30, 2010 were $2.5 million of non-performing loans, $2.4 million of other real estate owned and $1.6 million of non-performing corporate bond investments.
"We are pleased with the improvement made in our nonperforming assets this quarter and year-to-date. We will remain diligent, though, in identifying any potential concerns as early as possible. Most asset classes generally have continued to improve since year-end," Ferrell said.
Assets under Wealth Management Services, totaling $292.7 million in market value at June 30, 2010, increased of 4.8% from $279.3 million in market value at June 30, 2009, due to the increase in valuations of investments under management as well as new customer relationships.
Fauquier Bankshares and The Fauquier Bank had combined assets of $586.4 million and total shareholders' equity of $43.9 million at June 30, 2010. Fauquier Bankshares' regulatory capital ratios continue to be deemed "Well Capitalized," the highest category assigned by the Federal Reserve Bank of Richmond. At June 30, 2010, the Company's leverage ratio, an important indicator of financial health, was 8.42%, compared with 9.14% one year earlier. The Company's tier 1 and total risk-based ratios were 11.26% and 12.49%, respectively, at June 30, 2010, compared with 10.89% and 12.04% at June 30, 2009. The minimum capital ratios to be considered "Well Capitalized" by the Federal Reserve are 5.00% for the leverage ratio, 6.00% for the tier 1 risk-based ratio, and 10.00% for the total risk-based ratio.
The Fauquier Bank is an independent, locally-owned, community bank offering a full range of financial services, including internet banking, commercial, retail, insurance, wealth management, and financial planning services through ten banking offices throughout Fauquier and Prince William counties in Virginia. Fauquier Bankshares' stock price closed at $15.50 per share on July 27, 2010. Additional information, including a more extensive investor presentation, is available at www.fauquierbank.com or by calling (800) 638-3798.
This news release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Company's management uses these "non-GAAP" measures in their analysis of the Corporation's performance. The Company's management believes that these non-GAAP financial measures provide a greater understanding of ongoing operations and enhance comparability of results with prior periods as well as demonstrating the effects of significant gains and charges in the current period. The Company believes that a meaningful analysis of its financial performance requires an understanding of the factors underlying that performance. The Company's management believes that investors may use these non-GAAP financial measures to analyze financial performance without the impact of unusual items that may obscure trends in the Company's underlying performance. Where incorporated into our disclosures, these non-GAAP measures will be clearly identified as such. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
This news release may contain "forward-looking statements" as defined by federal securities laws. These statements address issues that involve risks, uncertainties, estimates and assumptions made by management, and actual results could differ materially from the results contemplated by these forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to, changes in: interest rates and the shape of the interest rate yield curve, general economic conditions, legislative/regulatory policies, monetary and fiscal policies of the U.S. Government, including policies of the U.S. Treasury, the FDIC and the Board of Governors of the Federal Reserve System, the quality or composition of the loan and/or investment portfolios, demand for loan products, deposit flows, competition, demand for financial services in our market area, our plans to expand our branch network and increase our market share, and accounting principles, policies and guidelines. Other risk factors are detailed from time to time in our Securities and Exchange Commission filings. Readers should consider these risks and uncertainties in evaluating our forward-looking statements and should not place undue reliance on such statements. We undertake no obligation to update these statements following the date of this news release.
FAUQUIER BANKSHARES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
For the Quarter Ended,
----------------------
(Dollars in
thousands, Dec. Sept. Jun.
except per Jun. 30, Mar. 31, 31, 30, 30,
share data) 2010 2010 2009 2009 2009
--------- --------- ----- ------ -----
EARNINGS
STATEMENT
DATA:
Interest
income $7,105 $7,068 $7,273 $7,136 $6,858
Interest
expense 1,550 1,568 1,591 1,624 1,712
----- ----- ----- ----- -----
Net interest
income 5,555 5,500 5,682 5,512 5,146
Provision
for loan
losses 375 375 790 360 360
--- --- --- --- ---
Net interest
income
after
provision
for loan
losses 5,180 5,125 4,892 5,152 4,786
Noninterest
income 1,471 1,339 1,382 1,394 1,400
Securities
gains
(losses) - (387) (360) (246) (166)
Noninterest
expense 5,285 5,029 4,881 5,021 5,024
----- ----- ----- ----- -----
Income
before
income
taxes 1,366 1,048 1,034 1,279 996
Income taxes 355 244 219 323 272
--- --- --- --- ---
Net income $1,011 $804 $815 $956 $724
====== ==== ==== ==== ====
PER SHARE
DATA:
Net income
per share,
basic $0.28 $0.22 $0.23 $0.26 $0.20
Net income
per share,
diluted $0.28 $0.22 $0.23 $0.26 $0.20
Cash
dividends $0.20 $0.20 $0.20 $0.20 $0.20
Average
basic
shares
outstanding 3,631,411 3,602,776 3,597,909 3,597,602 3,596,537
Average
diluted
shares
outstanding 3,648,354 3,620,931 3,608,680 3,610,160 3,606,529
Book value
at period
end $12.07 $11.97 $11.86 $11.84 $11.51
BALANCE
SHEET DATA:
Total assets $586,357 $570,595 $568,482 $548,384 $530,834
Loans, net 462,730 467,430 462,784 455,391 452,132
Investment
securities 45,346 40,748 40,467 38,275 36,385
Deposits 492,826 467,796 465,987 435,567 412,601
Transaction
accounts
(Demand
and NOW
Accounts) 175,539 165,643 151,864 145,644 132,902
Shareholders'
equity 43,874 43,342 42,639 42,601 41,389
PERFORMANCE
RATIOS:
Net interest
margin(1) 4.10% 4.27% 4.33% 4.35% 4.23%
Return on
average
assets 0.69% 0.58% 0.58% 0.70% 0.55%
Return on
average
equity 9.28% 7.48% 7.55% 8.87% 7.02%
Efficiency
ratio(2) 74.03% 76.59% 71.54% 74.48% 77.78%
FAUQUIER BANKSHARES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
For the Quarter Ended,
----------------------
(Dollars in thousands, Jun. Mar. Dec. Sept. Jun.
except per share 30, 31, 31, 30, 30,
data) 2010 2010 2009 2009 2009
----- ----- ----- ------ -----
ASSET QUALITY RATIOS:
Nonperforming loans $2,479 $3,420 $3,503 $4,332 $1,139
Other real estate
owned 2,412 2,029 2,480 2,029 2,029
Foreclosed property 11 61 54 68 51
Nonperforming
corporate bond
investments,
at fair value 1,636 1,828 1,126 634 -
----- ----- ----- --- ---
Total nonperforming
assets $6,538 $7,338 $7,163 $7,063 $3,219
====== ====== ====== ====== ======
Nonperforming loans to
total loans, period
end 0.53% 0.72% 0.75% 0.94% 0.25%
Nonperforming loans,
other real estate
owned
and other repossessed
assets as percentage
of total loans, other
real estate owned and
other repossessed
assets, period end 1.05% 1.16% 1.28% 1.39% 0.70%
Nonperforming assets
to period end total
assets 1.12% 1.29% 1.26% 1.29% 0.61%
Allowance for loan
losses $5,397 $5,470 $5,482 $5,221 $5,091
Allowance for loan
losses to period end
loans, net 1.15% 1.16% 1.17% 1.13% 1.11%
Allowance for loan
losses as percentage
of
nonperforming loans,
period end 217.71% 159.83% 156.49% 120.52% 446.97%
Allowance for loan
losses as percentage
of
nonperforming loans,
other real estate
owned and other
repossessed assets,
period end 110.10% 99.23% 90.81% 81.24% 158.15%
Net loan charge-offs
for the quarter $448 $387 $526 $230 $142
Net loan charge-offs
to average loans 0.10% 0.08% 0.11% 0.05% 0.03%
CAPITAL RATIOS:
Tier 1 leverage ratio 8.42% 8.66% 8.68% 9.00% 9.14%
Tier 1 risk-based
capital ratio 11.26% 10.91% 10.97% 10.80% 10.89%
Total risk-based
capital ratio 12.49% 12.12% 12.21% 11.97% 12.04%
Tangible equity to
total assets 7.44% 7.60% 7.50% 7.77% 7.80%
FAUQUIER BANKSHARES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
For the Six Month Period
Ended,
June 30,
2010 June 30, 2009
--------- -------------
EARNINGS STATEMENT DATA:
Interest income $14,173 $13,665
Interest expense 3,118 3,584
----- -----
Net interest income 11,055 10,081
Provision for loan
losses 750 560
--- ---
Net interest income
after
provision for loan
losses 10,305 9,521
Noninterest income 2,810 2,523
Securities gains
(losses) (387) (166)
Noninterest expense 10,314 9,618
------ -----
Income before income
taxes 2,414 2,260
Income taxes 600 613
--- ---
Net income $1,814 $1,647
====== ======
PER SHARE DATA:
Net income per share,
basic $0.50 $0.46
Net income per share,
diluted $0.50 $0.46
Cash dividends $0.40 $0.40
Average basic shares
outstanding 3,617,173 3,588,845
Average diluted shares
outstanding 3,634,722 3,596,196
PERFORMANCE RATIOS:
Net interest margin(1) 4.18% 4.17%
Return on average assets 0.64% 0.64%
Return on average equity 8.22% 7.94%
Efficiency ratio(2) 75.26% 76.34%
Net charge-offs $835 $249
Net charge-offs to
average loans 0.18% 0.06%
(1) Net interest margin is calculated as fully taxable equivalent net
interest income divided by average earning assets and represents the
Company's net yield on its earning assets.
(2) Efficiency ratio is computed by dividing non-interest expense by
the sum of fully taxable equivalent net interest income and non-
interest income.
SOURCE Fauquier Bankshares, Inc.
