Increased earnings reported

Published 6:00 am Wednesday, November 3, 2021

Benchmark Bankshares, Inc. (BMBN), the Kenbridge-based holding company for Benchmark Community Bank, announced unaudited earnings of $3,343,121 for the third quarter of 2021, representing a 19.5% increase over the $2,796,595 earned during the third quarter of 2020. Earnings per share increased from $0.63 to $0.74, an increase of 17.8% for the quarter. Net income through the first nine months of the year amounted to $8,839,538, an 18.8% increase from the $7,441,474 earned through the first nine months of 2020, while earnings per share increased by 17.6%, climbing from $1.66 to $1.95.

Notable Items:

• Net interest income grew from $22.6 million to $24.6 million, an increase of 8.7%, when comparing the first nine months of 2021 to the same period last year.

• Noninterest income increased from $5.6 million to $6.4 million as the bank’s residential mortgage demand and financial services business remained strong.

• The Paycheck Protection Program, which continued in 2021, has generated approximately $1.9 million in fee income year-to-date compared to fee income of $848 thousand at this point last year.

• The bank does not currently hold any foreclosed property, compared to a balance of $1.6 million one year ago. Management has incurred $212,165 in expenses related to foreclosed property year-to-date, compared to $148,107 incurred through the first nine months of last year. In addition, non-accrual loans amounted to $573,740 as of Sept. 30, 2021, compared to $657,056 one year ago.

• Net charge-offs for the first nine months of the year amounted to $18,745, down from $158,457 charged off in the first nine months of 2020.

• A total of $330,384 was provisioned to the loan loss reserve during the first nine months of 2021, compared to a provision of $471,596 during the same period last year. The

allowance for loan losses as a percentage of net loans was 0.90% on Sept. 30, 2021 compared to 0.87% last September.

• Interest expense on borrowings, used to support the company’s stock repurchase program, amounted to $145,341 year-to-date compared to a cost of $204,927 last year.

• FDIC insurance premiums increased from $103,462 to $313,396 as the bank’s deposit base has increased from $722.6 million to $897.5 over the past 12 months.

• A total of 30,728 common shares have been repurchased year-to-date at an average price of $19.10 per share. A total of 63,567 shares were repurchased at an average price of $16.15 during the first nine months of 2020. Total shares outstanding as of Sept., 2021 amounted to 4,520,865.

As of Sept. 30, 2021, total assets were $991.5 million, an increase of $184.5 million, or 22.8%, over the Sept. 30, 2020 balance of $807.0 million. Over the past 12 months loans held for investment have increased by $8.9 million, or 1.4%. Despite strong loan demand, the rapid payoff of PPP loans continues to reduce the bank’s loan portfolio. Total deposits have increased by $174.9 million, or 24.2% since last September. Shareholders’ equity, net of unrealized gains on investment securities, was $82.3 million on Sept. 30, 2021, an increase of $9.4 million, or 12.8%, over the Sept. 30, 2020 balance of $72.9 million. All capital ratios exceeded regulatory guidelines for a well-capitalized financial institution under the Basel III regulatory requirements as of Sept. 30, 2021.

Key Financial Ratios:

• Return on average equity (ROAE) increased from 13.85% to 14.67% and return on average assets (ROAA) decreased from 1.31% to 1.23% year to date.

• Yield on loans decreased from 5.36% to 5.31%. While the current low interest rate environment continues to put downward pressure on new loan rates, fee income from the PPP loan program helped bolster overall loan yield.

• The bank’s cost of funds decreased from 0.50% to 0.29% due to falling deposit rates and a $50.5 million increase in non-interest-bearing deposits over the past 12 months.

• Net interest margin of 3.63% is down from 4.29% one year ago due to the bank’s large cash position of $209.6 million as of Sept. 30, 2021.

• Current book value of the company has increased from $16.66 to $18.48 over the past 12 months.

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 seventeen banking offices throughout central Southside Virginia and northern North Carolina. Additional information is available at the company’s website, www.BCBonline.com.