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Section 1: 8-K (8-K)

fbss-8k_20180331.htm

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 25, 2018

 

Fauquier Bankshares, Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Virginia

000-25805

54-1288193

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

10 Courthouse Square,

Warrenton, Virginia

 

20186

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (540) 347-2700

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 

 


Item 2.02 Results of Operations and Financial Condition.

On April 25, 2018, Fauquier Bankshares, Inc. issued a press release reporting its first quarter 2018 financial results. A copy of the press release is attached as Exhibit 99.1 to this current report on Form 8-K.

The information in this Form 8-K, and the exhibit hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

Number

 

Description

99.1

 

Fauquier Bankshares Press Release First Quarter 2018 Results, dated April 25, 2018

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

Fauquier Bankshares, Inc.

 

 

 

 

Date: April 25, 2018

 

By:

/s/ Christine E. Headly

 

 

 

Christine E. Headly

 

 

 

Executive Vice President and Chief Financial Officer

 

 

 

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Section 2: EX-99.1 (EX-99.1)

fbss-ex991_6.htm

Exhibit 99.1

PRESS RELEASE

CONTACT CHRIS HEADLY

(540) 349-0218 or

[email protected]

 

FAUQUIER BANKSHARES, INC. ANNOUNCES First QUARTER 2018 RESULTS

 

 

Year-over-year net income increased 65.4% to $1.3 million for the first quarter from $768,000 for the first quarter of 2017;  

 

 

Net loans remained stable at $497.7 million for the first quarter compared with the fourth quarter of 2017 and increased $46.5 million or 10.3% when compared with the first quarter of 2017;

 

 

Net interest margin remained relatively unchanged for the first quarter at 3.74%, down 1 basis point, compared to 3.75% for the prior quarter and up 22 basis points from 3.52% for the first quarter of 2017;

 

 

Return (loss) on average assets of 0.77% for the first quarter compared with (0.33)% and 0.50% for the prior quarter and first quarter of 2017, respectively;

 

 

Return (loss) on average equity of 9.16% for the first quarter compared with (3.77)% and 5.68% for the prior quarter and first quarter of 2017, respectively;

 

 

Noninterest expenses were $5.5 million for the first quarter, compared with $5.3 million for the prior quarter and $5.4 million for the first quarter of 2017; and

 

 

Regulatory capital remains strong with ratios exceeding the well capitalized thresholds in all categories.  

 

 

WARRENTON, VA., April 25, 2018 - Fauquier Bankshares, Inc. (the Company) (NASDAQ: FBSS), parent company of The Fauquier Bank, reported net income of $1.3 million, or $0.34 per diluted share for the quarter ended March 31, 2018, compared with a net loss of $544,000, or $(0.14) per diluted share for the prior quarter and $768,000 or $0.20 per diluted share for the first quarter of 2017.  

 

For the quarter ended March 31, 2018, the Company’s return on average equity (ROE) and return on average assets (ROA) were 9.16% and 0.77%, respectively, compared with a loss on average equity of (3.77)% and a loss on average assets of (0.33)% for the prior quarter and return of 5.68% and 0.50%, respectively, for the first quarter of 2017.  The loss on average equity and average assets for the prior quarter was the direct result of an adjustment related to the enactment of the Tax Cuts and Jobs Act.  

 

Marc Bogan, President and CEO said, “We made significant progress during the first quarter as we continue to strive towards achieving our strategic initiatives of growing the balance sheet, increasing profitability through net interest income and other fee income, and increasing our efficiencies by managing expenses.  With this progress, we are gaining traction on becoming a high performing community bank.”

 

Total assets were $682.0 million on March 31, 2018 compared with $644.6 million and $630.0 million on December 31, 2017 and March 31, 2017, respectively.  Net loans were $497.7 million on March 31, 2018, relatively unchanged from December 31, 2017 and increased $46.5 million from $451.2 million on March 31, 2017.  Total deposits were $577.2 million on March 31, 2018 compared with $551.1 million on March 31, 2017.  Low cost transaction deposits (demand and interest checking accounts) were $351.5 million on March 31, 2018 compared with $344.3 million on March 31, 2017.

 

Net interest margin was 3.74% for the first quarter of 2018 compared with 3.75% for the prior quarter and 3.52% for the first quarter of 2017.  Net interest income was $5.7 million for the first quarter of 2018 compared with $5.6 million for the prior quarter and $4.9 million for the first quarter of 2017.    

 

Nonperforming assets were $10.9 million on March 31, 2018, compared with $10.4 million on December 31, 2017 and $11.5 million on March 31, 2017.  Included in nonperforming assets for the quarter were $9.5 million of nonperforming loans and $1.4 million of other real estate owned.

 

Net loan recoveries were $7,000 for the first quarter of 2018 compared with net loan recoveries of $541,000 for the prior quarter and net loan charge-offs of $97,000 for the first quarter of 2017.  The allowance for loan losses was $5.4 million or 1.07% of total loans on March 31, 2018 compared with $5.1 million or 1.01% of total loans on December 31, 2017 and $4.4 million or 0.98% of total loans on March 31, 2017.

 

Noninterest income was $1.5 million in the first quarter 2018, compared with $1.4 million for the prior quarter and $1.4 million for the first quarter of 2017.  Noninterest expense for the first quarter of 2018 was $5.5 million compared with $5.3 million for the prior quarter and $5.4 million for the first quarter of 2017.

 


Shareholders’ equity was $56.7 million on March 31, 2018 compared with $55.3 million on March 31, 2017.  Book value per common share was $15.01 and $14.66 as of March 31, 2018 and 2017, respectively.    

 

The Company’s strategic goals were designed to grow the Company, increase profitability and to drive shareholder value.  With this in mind, our key strategic objectives and our current outlook are:

 

We continue to maintain a strong net interest margin and have done so since the fourth quarter of 2016.  Our focus is on loan and deposit pricing to ensure a well maintained and healthy margin.    

 

Commercial and consumer loan growth continues to show improvement with several new loan products, all while maintaining strong asset quality.  While these new offerings bring added benefits to the Company and our clients, we continue to have credit standards that do not compromise our credit quality.  

 

The origination and sales of secondary market loans continues to provide an additional source of noninterest income, along with our Wealth Management services and fee income tied to our retail products.  

 

Noninterest expenses have stabilized, however we recognize room for improvement.  Our management team continues to evaluate process efficiencies to continue to reduce operating costs.

Fauquier Bankshares, through its operating subsidiary, The Fauquier Bank, is an independent, locally-owned, community bank offering a full range of financial services, including internet banking, mobile banking with mobile deposit, commercial, retail, insurance, wealth management, and financial planning services through eleven banking offices throughout Fauquier and Prince William counties in Virginia. Additional information is available at www.tfb.bank or by calling Investor Relations at (800) 638-3798.

 

This press 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. 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.

 

SELECTED FINANCIAL DATA

 

 

At or For the Quarter Ended,

 

(Dollars in thousands, except per share data)

 

March 31,

2018

 

 

December 31,

2017

 

 

September 30,

2017

 

 

June 30,

2017

 

 

March 31,

2017

 

EARNINGS STATEMENT DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

6,370

 

 

$

6,191

 

 

$

6,001

 

 

$

5,713

 

 

$

5,415

 

Interest expense

 

 

652

 

 

 

556

 

 

 

515

 

 

 

509

 

 

 

469

 

Net interest income

 

 

5,718

 

 

 

5,635

 

 

 

5,486

 

 

 

5,204

 

 

 

4,946

 

Provision for loan losses

 

 

300

 

 

 

125

 

 

 

110

 

 

 

235

 

 

 

50

 

Net interest income after

provision for loan losses

 

 

5,418

 

 

 

5,510

 

 

 

5,376

 

 

 

4,969

 

 

 

4,896

 

Noninterest income

 

 

1,463

 

 

 

1,378

 

 

 

1,285

 

 

 

1,393

 

 

 

1,412

 

Noninterest expense

 

 

5,481

 

 

 

5,286

 

 

 

4,993

 

 

 

5,150

 

 

 

5,415

 

Income before income taxes

 

 

1,400

 

 

 

1,602

 

 

 

1,668

 

 

 

1,212

 

 

 

893

 

Income taxes

 

 

130

 

 

 

2,146

 

 

 

387

 

 

 

222

 

 

 

125

 

Net income

 

$

1,270

 

 

$

(544

)

 

$

1,281

 

 

$

990

 

 

$

768

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share, basic

 

$

0.34

 

 

$

(0.14

)

 

$

0.34

 

 

$

0.26

 

 

$

0.20

 

Net income (loss) per share, diluted

 

$

0.34

 

 

$

(0.14

)

 

$

0.34

 

 

$

0.26

 

 

$

0.20

 

Cash dividends

 

$

0.12

 

 

$

0.12

 

 

$

0.12

 

 

$

0.12

 

 

$

0.12

 

Weighted average shares outstanding, basic

 

 

3,768,197

 

 

 

3,762,677

 

 

 

3,765,359

 

 

 

3,769,201

 

 

 

3,761,501

 

Weighted average shares outstanding, diluted

 

 

3,777,114

 

 

 

3,772,700

 

 

 

3,773,813

 

 

 

3,778,532

 

 

 

3,768,676

 

Book value

 

$

15.01

 

 

$

14.92

 

 

$

15.20

 

 

$

14.93

 

 

$

14.66

 

BALANCE SHEET DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

682,024

 

 

$

644,613

 

 

$

631,717

 

 

$

646,265

 

 

$

630,032

 

Loans, net

 

 

497,691

 

 

 

497,705

 

 

 

485,326

 

 

 

463,309

 

 

 

451,166

 

Securities

 

 

72,521

 

 

 

73,699

 

 

 

68,682

 

 

 

65,539

 

 

 

58,212

 

Deposits

 

 

577,242

 

 

 

570,023

 

 

 

556,209

 

 

 

571,902

 

 

 

551,103

 

Transaction accounts

(demand & interest checking accounts)

 

 

351,485

 

 

 

361,246

 

 

 

348,005

 

 

 

359,725

 

 

 

344,324

 

Shareholders' equity

 

 

56,654

 

 

 

56,142

 

 

 

57,185

 

 

 

56,259

 

 

 

55,267

 

PERFORMANCE RATIOS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin(1)

 

 

3.74

%

 

 

3.75

%

 

 

3.75

%

 

 

3.60

%

 

 

3.52

%

Return (loss) on average assets

 

 

0.77

%

 

 

(0.33

)%

 

 

0.80

%

 

 

0.63

%

 

 

0.50

%

Return (loss) on average equity

 

 

9.16

%

 

 

(3.77

)%

 

 

8.96

%

 

 

7.10

%

 

 

5.68

%

Efficiency ratio(2)

 

 

77.24

%

 

 

74.35

%

 

 

72.62

%

 

 

76.81

%

 

 

83.95

%

Yield on earning assets

 

 

4.16

%

 

 

4.12

%

 

 

4.09

%

 

 

3.94

%

 

 

3.85

%

Cost of interest bearing liabilities

 

 

0.54

%

 

 

0.47

%

 

 

0.45

%

 

 

0.45

%

 

 

0.43

%

  

(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 noninterest expense by the sum of fully taxable equivalent net interest income and noninterest income, net of securities gains or losses.


FAUQUIER BANKSHARES, INC.

 

SELECTED FINANCIAL DATA

 

 

At or For the Quarter Ended,

 

(Dollars in thousands, except for ratios)

 

March 31,

2018

 

 

December 31,

2017

 

 

September 30,

2017

 

 

June 30,

2017

 

 

March 31,

2017

 

ASSET QUALITY RATIOS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

3,688

 

 

$

3,180

 

 

$

2,431

 

 

$

2,322

 

 

$

3,207

 

Restructured loans still accruing

 

 

3,744

 

 

 

4,182

 

 

 

4,361

 

 

 

4,506

 

 

 

4,541

 

Student loans greater than 90 past due

and still accruing

 

 

1,330

 

 

 

1,616

 

 

 

2,129

 

 

 

2,397

 

 

 

2,438

 

Loans greater than 90 days past due

and still accruing

 

 

772

 

 

 

49

 

 

 

565

 

 

 

104

 

 

 

1

 

Total nonperforming loans

 

 

9,534

 

 

 

9,027

 

 

 

9,486

 

 

 

9,329

 

 

 

10,187

 

Other real estate owned, net

 

 

1,356

 

 

 

1,356

 

 

 

1,356

 

 

 

1,356

 

 

 

1,356

 

Total nonperforming assets

 

$

10,890

 

 

$

10,383

 

 

$

10,842

 

 

$

10,685

 

 

$

11,543

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

$

5,400

 

 

$

5,094

 

 

$

4,428

 

 

$

4,279

 

 

$

4,447

 

Allowance for loan losses to total loans

 

 

1.07

%

 

 

1.01

%

 

 

0.90

%

 

 

0.92

%

 

 

0.98

%

Nonaccrual loans to total loans

 

 

0.73

%

 

 

0.63

%

 

 

0.50

%

 

 

0.50

%

 

 

0.70

%

Allowance for loan losses to

nonperforming loans

 

 

56.64

%

 

 

56.43

%

 

 

46.68

%

 

 

45.87

%

 

 

43.65

%

Nonperforming loans to total loans

 

 

1.90

%

 

 

1.80

%

 

 

1.94

%

 

 

2.00

%

 

 

2.24

%

Nonperforming assets to total assets

 

 

1.60

%

 

 

1.61

%

 

 

1.72

%

 

 

1.65

%

 

 

1.83

%

Net loan charge-offs (recoveries)

 

$

(7

)

 

$

(541

)

 

$

(39

)

 

$

434

 

 

$

97

 

Net loan charge-offs (recoveries)

to average loans

 

 

 

 

 

(0.11

)%

 

 

(0.01

)%

 

 

0.09

%

 

 

0.02

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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