Benchmark Bankshares, Inc. third quarter results
Benchmark Bankshares, Inc. (BMBN), the Kenbridge-based holding company for Benchmark Community Bank, announced earnings of $2,389,467 for the third quarter of 2019, representing a 6.5% increase over the $2,243,140 earned during the third quarter of 2018. Earnings per share increased from $0.42 to $0.48, an increase of 14.3% for the quarter. Net income through the first nine months of the year amounted to $6,895,999, a 6.0% increase from the $6,505,576 earned through the first nine months of 2018, while earnings per share increased by 12.1%, climbing from $1.27 to $1.42.
Return on average equity of 12.94% was up from 12.46% last year while return on average assets of 1.34% was down slightly from the 1.43% reported for the first nine months of last year. Both ratios remain strong and are very competitive within the banking industry.
Earnings per share growth has been bolstered by the company’s ongoing stock repurchase plan. Through this plan, the company has repurchased 436,854 shares of stock year-to-date, up from 119,763 shares repurchased last year at this time, with a total of 387,831 shares repurchased during June and July of this year.
Despite this increase in repurchase activity, overall capital remains strong with a consolidated capital to assets ratio of 9.88%, compared to 11.34% one year ago. The bank maintains a Tier 1 leverage ratio of 10.6% and a total risk-based capital ratio of 16.29%, compared to 11.41% and 16.56%, respectively, one year ago.
Loans are up $21.0 million, or 3.9%, over the past 12 months with a year-to-date increase of $17.4 million, or 3.3%. While this loan growth is moderate compared to last year, loan demand remains steady and has begun to increase later in the year. The bank’s yield on loans increased from 5.40% to 5.59%, increasing interest and fee income by $2.1 million through the first nine months of the year.
Total deposits of $621.0 million have increased by $52.2 million year-to-date and are up $75.7 million from one year ago, while cost of funds have increased from 0.43% to 0.62% over the past 12 months. As a result, interest expense has increased from $1.7 million to $2.9 million through the first nine months of the year. Overall, the bank’s net interest margin has declined from 4.71% to 4.50% when comparing the first nine months of 2019 to the same period last year. Much of this is attributable to the recent surge in deposit growth, which has caused the bank to hold additional funds in lower-yielding assets such as federal funds sold and bank time deposits.
The bank currently holds $2.4 million in foreclosed property, having written down $327,000 year-to-date to adjust the market value of properties the bank has owned for several years. Last year, the bank wrote down $748,000 during the first nine months of the year. In addition, the bank has recognized a gain of $76,000 year-to-date from the sale of foreclosed property, up from a loss of $209,000 through the first nine months last year.
Net charge-offs for the first nine months of the year amounted to $274,000 down slightly from $309,000 charged off in the first nine months of 2018, and non-accrual loans have increased from $1.0 million to $1.3 million. Overall asset quality remains very strong. During the first nine months of the year, a total of $545,000 has been provisioned to loan loss reserve, compared to $706,000 provisioned during the first nine months of 2018. The current loan loss reserve of $5.5 million represents 0.99% of total loans.
The common stock of Benchmark Bankshares, Inc. trades on the OTC Pink marketplace under the symbol BMBN. Any stockbroker can assist with purchases of the company’s stock, as well as with sales of holdings.
Benchmark Community Bank, founded in 1971, is headquartered in Kenbridge. It is the company’s sole subsidiary which operates 16 banking offices throughout central Southside Virginia and northern North Carolina. Additional information is available at the company’s website, www.BCBonline.com.