Benchmark Bankshares Inc., the Kenbridge-based holding company for Benchmark Community Bank, announced unaudited results for 2019.
Net income for the year amounted to $9,452,659, a 3.46% increase over net income of $9,136,406 earned in 2018. Earnings per share for the year amounted to $1.98 per share, up from $1.79 per share last year, while return on equity increased from 13.01% to 13.35% and return on average assets declined from 1.49% to 1.36%. Total assets ended the year at $711.9 million, an increase of $68.0 million, or 10.6%, for the year. This compares to $48.7 million, or 8.2%, in asset growth during 2018.
The bank earned $2,556,660, or $0.56 per share, during the fourth quarter of 2019 compared to $2,630,830, or $0.51 per share, for the fourth quarter of 2018. A loan loss provision of $209,662 was made during the fourth quarter, compared to a provision of $226,760 during the fourth quarter last year. Write downs and other expenses related to foreclosed property amounted to $253,539 this year compared to $19,943 for the same period last year.
Total loans at year-end amounted to $573.8 million, a $40.1 million increase over the past twelve months. This growth has been driven by increased loan demand throughout the bank’s market area. The bank’s mortgage and home construction lending business also had another outstanding year as low interest rates continued to drive both refinancing and new home purchases.
Total deposits of $632.9 million at year-end were up $64.1 million from last year. Based on June 2019 deposit numbers from the FDIC, the bank continues to be the largest depository institution in the seven Virginia counties in which it operates, maintaining a market share of approximately 24% of total deposits. The bank has continued to focus on checking account growth while pursuing a less aggressive strategy for time deposits. During the year, non-interest checking accounts increased by $9.8 million, interest-bearing checking accounts increased by $15.7 million, savings and money market accounts were up $25.0 million, and time deposits grew by $13.6 million.
The Federal Reserve lowered interest rates three times during the year, after raising rates four times during 2018. The prime rate declined from 5.50% to 4.75% during the year. Interest expense on deposits for 2019 amounted to $3.8 million, up 5.6% from the $2.4 million realized during 2018. The bank’s total yield on loans, at 5.58%, was up slightly from 5.42% last year, while the cost of funds rose from 0.45% to 0.65%. Overall, net interest margin declined from 4.72% to 4.49% as the bank held a larger-than-normal amount of federal funds during the year due to increased deposit growth.
Nonaccrual loans of $866 thousand were up slightly from $745 thousand one year ago, while other real estate owned declined from $2.0 million to $1.9 million as management was able to sell or write down foreclosed properties that had been on the books for several years. The bank incurred net charge-offs of $690 thousand, up from $428 thousand charged off during 2018. The bank also incurred $581 thousand in write downs and other expenses related to foreclosed properties, down from the $769 thousand in expenses incurred last year. Although asset quality remains strong and past due loans have remained low, the bank provisioned a total of $754 thousand to the loan loss reserve during the year, compared to a total provision of $932 thousand provision during 2018. As of Dec. 31, 2019, the reserve for loan losses totaled $5.3 million, or 0.92% of total loans. This compares to a reserve of $5.2 million, or 0.98% of total loans one year ago.
During the year, a total of 518,482 shares of common stock were repurchased, facilitating overall liquidity for the Company’s outstanding shares. Although the total cost of these shares exceeded $10.4 million, approximately $5.6 million of the cost was funded with a line of credit, helping to preserve overall capital at the bank level. The bank incurred interest expense of $196 thousand during the year to fund these repurchases.
“We are pleased to report that the bank had another successful year in 2019,” said President/CEO Jay Stafford. “Earnings remain strong as indicated by the increased earnings per share and dividend payout, while we have been able to increase the deposits needed to fund steady loan growth in the newer North Carolina markets to bolster future earnings.”
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, VA. It is the company’s sole subsidiary which operates sixteen banking offices throughout central Southside Virginia and northern North Carolina. Additional information is available at the company’s website, www.BCBonline.com.