Fauquier Bankshares, Inc. Announces Fourth Quarter 2019 Results

WARRENTON, Va., Jan. 21, 2020

For the quarter ended December 31, 2019, the Company's return on average equity (ROE) and return on average assets (ROA) were 9.35% and 0.85%, respectively, compared with 12.46% and 1.14% for the prior quarter, respectively, and 10.58% and 0.92%, for the fourth quarter of 2018, respectively.  For the twelve months ended December 31, 2019, ROE and ROA were 10.64% and 0.96%, respectively, compared with 10.64% and 0.92%, respectively, for the twelve months ended December 31, 2018.

Marc Bogan, President and CEO, said, "The Fauquier Bank achieved record earnings in 2019 as a result of strong revenue growth, solid expense management, and improved credit quality. Our goal continues to be enhancing the Bank's financial performance, and we are encouraged by the continued earnings improvement; however, we recognize the importance of growing loans and deposits in order to sustain the profitability trends. We believe we are positioned to grow earning assets in the coming year; and this growth combined with our focus on efficiency improvements, will result in continued financial progress and added shareholder value."

Total assets were $722.2 million on December 31, 2019 compared with $726.3 million for the prior quarter and $730.8 million on December 31, 2018.  Net loans increased $5.2 million to $545.0 million on December 31, 2019 compared with the prior quarter and remained relatively flat compared with December 31, 2018.  Total deposits were $622.2 million on December 31, 2019 compared with $614.0 million for the prior quarter and $635.6 million on December 31, 2018.  Low cost transaction deposits (demand and interest checking accounts) were $366.0 million on December 31, 2019 compared with $354.5 million for the prior quarter and $392.6 million on December 31, 2018.

Net interest margin was 3.65% for the fourth quarter of 2019 compared with 3.73% for the prior quarter and 3.79% for the fourth quarter of 2018.  Net interest income was $6.2 million for the fourth quarter of 2019, relatively unchanged when compared with the prior quarter and $6.1 million for the fourth quarter of 2018.  The increase in net interest income for the twelve months ended December 31, 2019 benefited largely from loan growth during the last part 2018 as well as reduced deposit expense.  Net interest margin for the twelve months ended December 31, 2019 and 2018 was 3.74% and 3.81%, respectively. 

The Company's allowance for loan loss methodology determines the level of loan provision at the end of each quarter.  Based on loan portfolio growth, net charge-off history, asset quality indicators, impaired loans and other qualitative factors, there was $91,000 in provision for loan losses for the fourth quarter compared with no provision for loan losses for the prior quarter and the fourth quarter of 2018.  This resulted in the allowance for loan losses of $5.2 million or 0.95% of total loans on December 31, 2019 compared with $5.4 million or 0.99% of total loans for the prior quarter and $5.2 million or 0.94% of total loans on December 31, 2018. 

Nonperforming assets were $6.5 million on December 31, 2019, compared with $6.7 million for the prior quarter and $7.9 million on December 31, 2018.  Included in nonperforming assets for the quarter were $5.1 million of nonperforming loans and $1.4 million of other real estate owned.  Net loan charge-offs were $259,000 for the fourth quarter of 2019 compared with $14,000 and $38,000 for the prior quarter and fourth quarter of 2018, respectively.