Fauquier Bankshares Announces Year End and Fourth Quarter 2016 Results

WARRENTON, Va., Feb. 8, 2017 /PRNewswire/ -- Fauquier Bankshares, Inc. (NASDAQ: FBSS), parent company of The Fauquier Bank ("TFB") reported net income of $3.67 million for the year ended December 31, 2016 compared with a net loss of $612,000 for the year ended December 31, 2015. Basic and diluted earnings per share for the year ended December 31, 2016 were $0.98, compared with basic and diluted loss per share of $0.16 for 2015. For the fourth quarter of 2016, net income was $808,000 compared with a net loss of $3.75 million for the fourth quarter of 2015. Basic and diluted earnings per share for the fourth quarter of 2016 were $0.22 compared with basic and diluted loss per share of $1.00 for the fourth quarter of 2015.

Marc Bogan, President and CEO, said, "In the fourth quarter and throughout 2016, we have made significant progress towards our goal of improving financial performance at our company. While the 2016 financials clearly show dramatic improvement in the comparative year over year results, our belief is we still have a long way to go to achieve our short-term objective of being a high performing community bank, and a top performer relative to our peers. We are encouraged by the advances we have experienced over the past year, and we continue to see marked improvement in our specific operating results, as well as potential improvements in the overall operating environment for community banks."  

Total assets were $624.4 million at December 31, 2016 compared with $601.4 million at December 31, 2015. Net loans increased $15.9 million or 3.59% to $458.6 million at December 31, 2016 from $442.7 million on December 31, 2015. Total deposits were $546.2 million at December 31, 2016 compared with $524.3 million at December 31, 2015. Low cost transaction deposits (demand and interest checking accounts) grew $28.6 million or 8.93% to $348.8 million at December 31, 2016 from $320.2 million at December 31, 2015, now representing 63.87% of total deposits.

Return on average assets (ROAA) was 0.60% and return on average equity (ROAE) was 6.82% for the year ended December 31, 2016, compared with -0.10% and -1.09%, respectively, for 2015. For the fourth quarter of 2016, Fauquier Bankshares' return on average assets was 0.51% and return on average equity was 5.91%, compared with -2.46% and -26.90%, respectively, for the fourth quarter of 2015.

Net interest margin was 3.50% for the year ended December 31, 2016, compared with 3.62% in 2015. Net interest income remained the same at $19.73 million for the year ended December 31, 2016 when compared the same period in 2015. Net interest margin was 3.50% in the fourth quarter of 2016, compared with 3.59% for the same period in 2015. Net interest income for the fourth quarter of 2016 increased slightly to $5.08 million when compared with $5.00 million for the same period in 2015.

Nonperforming assets were $4.88 million or 0.78% of total assets at December 31, 2016, compared with $3.21 million or 0.53% as of December 31, 2015. The increase was primarily due to the addition of two loans during the fourth quarter of 2016, both of which we expect to dispose of in the first half of 2017. Included in nonperforming assets on December 31, 2016 were $3.52 million of nonperforming loans and $1.36 million of other real estate owned. The ratio of nonperforming loans to total loans at period's end was 0.76% at December 31, 2016, compared with 0.41% at December 31, 2015.

Net loan recoveries were $840,000 or 0.18% of average loans for the year ended December 31, 2016 compared with net loan charge-offs of $9.20 million or 2.04% of average loans for the same period in 2015. For the fourth quarter of 2016, net loan recoveries were $108,000 or 0.02% of average loans compared with net loan charge-offs of $8.38 million or 1.84% of average loans for the same period in 2015. Allowance for loan losses was $4.53 million or 0.98% of total loans on December 31, 2016 compared with $4.19 million or 0.94% of total loans on December 31, 2015. The allowance for loan losses coverage ratio was 1.28 times nonperforming loans on December 31, 2016 compared with 2.27 times for the same period in 2015.

Noninterest income decreased $1.11 million or 17.32% to $5.30 million for the year ended December 31, 2016 compared with $6.41 million for the same period in 2015 and decreased $280,000 or 17.95% to $1.28 million during the fourth quarter of 2016 compared with $1.56 million for the same period in 2015. The decrease resulted from a decline in Wealth Management Services division revenue and a decrease in service charges on deposit accounts. Noninterest expense for the year ended December 31, 2016 increased $740,000 or 3.67% to $20.93 million compared with $20.19 million for the same period in 2015. Noninterest expense for the fourth quarter of 2016 increased $750,000 or 16.27% to $5.36 million compared with $4.61 million for the same period in 2015.

Shareholders' equity increased to $54.5 million at December 31, 2016 compared with $52.6 million at December 31, 2015. The book value of Fauquier Bankshares' stock was $14.51 per common share as of December 31, 2016. Fauquier Bankshares' stock price closed at $16.37 per share on February 7, 2017.

At December 31, 2016, the Bank's common equity tier 1 capital ratio and tier 1 risk-based capital ratio were 12.22%. The Bank's total risk-based ratio and leverage ratio were 13.17% and 9.23%, respectively, at December 31, 2016. The Bank exceeds all fully phased-in capital requirements of Basel III, effective January 1, 2019, at December 31, 2016.

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 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 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.

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SOURCE Fauquier Bankshares, Inc.