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 20, 2020

 

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))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange

on which registered

Common Stock

Par value $3.13 per share

FBSS

The Nasdaq Capital Market

 

 

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 2.02Results of Operations and Financial Condition.

On April 20, 2020, Fauquier Bankshares, Inc. (the “Company”) issued a press release reporting its first quarter 2020 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 9.01Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

Number

 

Description

99.1

 

Fauquier Bankshares Press Release announcing First Quarter 2020 Results


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 20, 2020

 

By:

/s/ Christine E. Headly

 

 

 

Christine E. Headly

 

 

 

Executive Vice President and Chief Financial Officer

 

 

 

fbss-ex991_6.htm

Exhibit 99.1

PRESS RELEASE

 

CONTACT CHRIS HEADLY

(540) 349-0218

chris.headly@tfb.bank

 

FAUQUIER BANKSHARES, INC. ANNOUNCES First QUARTER 2020 RESULTS

 

 

Net income was $1.4 million for the first quarter compared with net income of $1.6 million for the prior quarter and first quarter of 2019;

 

 

Net interest income was $6.2 million for the first quarter and the prior quarter and was $6.1 million for the first quarter of 2019;  

 

 

Net interest margin was 3.76% for the first quarter compared with 3.65% for the prior quarter and 3.89% for the first quarter of 2019;

 

 

Net loans were $562.1 million for the first quarter compared with $545.0 million for the prior quarter and $539.7 million for the first quarter of 2019;

 

 

The allowance for loan losses was $5.6 million for the first quarter compared with $5.2 million for the prior quarter and $5.3 million for the first quarter of 2019.  Higher provision for loan losses was recognized which was primarily attributable to the increase in qualitative factors as a result of the impact from COVID-19;

 

 

Deposits were $629.6 million for the first quarter compared with $622.2 million for the prior quarter and $592.4 million for the first quarter of 2019;

 

 

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

 

 

WARRENTON, VA., April 20, 2020 - Fauquier Bankshares, Inc. (the Company) (NASDAQ: FBSS), parent company of The Fauquier Bank, reported net income of  $1.4 million, or $0.37 per diluted share for the quarter ended March 31, 2020, compared with $1.6 million, or $0.41 per diluted share for the prior quarter and $1.6 million or $0.43 per diluted share for the first quarter of 2019.  

 

For the quarter ended March 31, 2020, the Company’s return on average equity (ROE) and return on average assets (ROA) were 8.20% and 0.78%, respectively, compared with 9.35% and 0.85% for the prior quarter, respectively, and 10.83% and 0.96%, for the first quarter of 2019, respectively.  

 

Marc Bogan, President and CEO said, “Our financial results in the first quarter were good, however the onset of the Coronavirus required a shift in our approach to doing business.  Our team has worked tirelessly to implement the new regulatory relief programs that were designed to help our clients’ financial position during this pandemic and the related emergency period.  Our team has also implemented a working environment to ensure the safety of our employees, clients and communities by working remotely or with limited staff to deliver the same service our clients and communities have come to expect.  Our team is committed to continued progress in financial results, however we are unable to estimate the impact COVID-19 will have on our Company at this time.  These are truly unprecedented times, but TFB is committed to serving the needs of our constituencies in a way that is helpful and safe.”

 

Total assets were $727.5 million on March 31, 2020 compared with $722.2 million for the prior quarter and $700.5 million on March 31, 2019.  Net loans were $562.1 million on March 31, 2020 compared with $545.0 million the prior quarter and $539.7 million on March 31, 2019.  Total deposits were $629.6 million on March 31, 2020 compared with $622.2 million for the prior quarter and $592.4 million on March 31, 2019.  Low cost transaction deposits (demand and interest checking accounts) were $378.6 million on March 31, 2020 compared with $366.0 million for the prior quarter and $346.7 million on March 31, 2019.

 

Net interest margin was 3.76% for the first quarter of 2020 compared with 3.65% for the prior quarter and 3.89% for the first quarter of 2019.  Net interest income was $6.2 million for the first quarter of 2020 and the prior quarter and $6.1 million for the first quarter of 2019.    

 

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 $350,000 in provision for loan losses for the first quarter compared with $91,000 and $50,000 in provision for loan losses for the prior quarter and the first quarter of 2019, respectively.  This resulted in the allowance for loan losses of $5.6 million or 0.99% of total loans on March 31, 2020 compared with $5.2 million or 0.95% of total loans for the prior quarter and $5.3 million or 0.97% of total loans on March 31, 2019.  

 

Nonperforming assets were $5.9 million on March 31, 2020, compared with $6.5 million for the prior quarter and $7.8 million on March 31, 2019.  Included in nonperforming assets for the quarter were $4.6 million of nonperforming loans and $1.4 million of other

1

 


real estate owned.  Net loan recoveries were $17,000 for the first quarter of 2020 compared with net loan charge-offs of $259,000 for the prior quarter and net loan recoveries of $55,000 for the first quarter of 2019.  

 

Noninterest income was $1.3 million in the first quarter of 2020, compared with $1.5 million for the prior quarter and the first quarter of 2019.  

  

Noninterest expense for the first quarter of 2020 was $5.6 million compared with $5.8 million for the prior quarter and $5.7 million for the first quarter of 2019.    

 

Shareholders’ equity was $69.2 million on March 31, 2020 compared with $67.1 million for the prior quarter and $62.1 million on March 31, 2019.  Book value per common share was $18.25 on March 31, 2020 compared with $17.74 for the prior quarter and $16.41 on March 31, 2019.    

 

Fauquier Bankshares, through its operating subsidiary, The Fauquier Bank, is an independent community bank offering a full range of financial services, including internet banking, mobile banking, 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, general economic conditions, the legislative/regulatory climate, 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 or investment portfolios, the value of the collateral securing loans in the portfolio, demand for loan products, deposit flows, the level of net charge-offs on loans and the adequacy of the allowance for loan losses, competition, demand for financial services in the Company’s market area, the Company’s plans to increase market share, mergers, acquisitions and dispositions, cybersecurity threats or attacks, and tax 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.

2

 


FAUQUIER BANKSHARES, INC.

Selected Financial Data By Quarter

 

 

At or For the Quarter Ended,

 

(Dollars in thousands, except per share data)

 

March 31,

2020

 

 

December 31,

2019

 

 

September 30,

2019

 

 

June 30,

2019

 

 

March 31,

2019

 

EARNINGS STATEMENT DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

7,057

 

 

$

7,350

 

 

$

7,362

 

 

$

7,279

 

 

$

7,179

 

Interest expense

 

 

868

 

 

 

1,108

 

 

 

1,171

 

 

 

1,195

 

 

 

1,046

 

Net interest income

 

 

6,189

 

 

 

6,242

 

 

 

6,191

 

 

 

6,084

 

 

 

6,133

 

Provision for loan losses

 

 

350

 

 

 

91

 

 

 

-

 

 

 

205

 

 

 

50

 

Net interest income after provision for loan losses

 

 

5,839

 

 

 

6,151

 

 

 

6,191

 

 

 

5,879

 

 

 

6,083

 

Noninterest income

 

 

1,342

 

 

 

1,486

 

 

 

1,610

 

 

 

1,400

 

 

 

1,480

 

Noninterest expense

 

 

5,605

 

 

 

5,810

 

 

 

5,419

 

 

 

5,509

 

 

 

5,718

 

Income before income taxes

 

 

1,576

 

 

 

1,827

 

 

 

2,382

 

 

 

1,770

 

 

 

1,845

 

Income taxes

 

 

180

 

 

 

255

 

 

 

330

 

 

 

206

 

 

 

213

 

Net income

 

$

1,396

 

 

$

1,572

 

 

$

2,052

 

 

$

1,564

 

 

$

1,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PER SHARE DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share, basic

 

$

0.37

 

 

$

0.41

 

 

$

0.54

 

 

$

0.41

 

 

$

0.43

 

Net income per share, diluted

 

$

0.37

 

 

$

0.41

 

 

$

0.54

 

 

$

0.41

 

 

$

0.43

 

Cash dividends

 

$

0.125

 

 

$

0.125

 

 

$

0.12

 

 

$

0.12

 

 

$

0.12

 

Weighted average shares outstanding, basic

 

 

3,788,626

 

 

 

3,784,447

 

 

 

3,784,934

 

 

 

3,784,934

 

 

 

3,778,895

 

Weighted average shares outstanding, diluted

 

 

3,794,864

 

 

 

3,789,073

 

 

 

3,790,846

 

 

 

3,793,966

 

 

 

3,788,910

 

Book value

 

$

18.25

 

 

$

17.74

 

 

$

17.43

 

 

$

16.94

 

 

$

16.41

 

BALANCE SHEET DATA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

727,494

 

 

$

722,171

 

 

$

726,339

 

 

$

717,528

 

 

$

700,502

 

Loans, net

 

$

562,099

 

 

$

544,999

 

 

$

539,832

 

 

$

538,593

 

 

$

539,672

 

Securities, including restricted investments

 

$

83,490

 

 

$

81,799

 

 

$

75,128

 

 

$

74,310

 

 

$

72,344

 

Deposits

 

$

629,560

 

 

$

622,155

 

 

$

614,000

 

 

$

607,256

 

 

$

592,358

 

Transaction accounts

(demand & interest checking accounts)

 

$

378,598

 

 

$

366,023

 

 

$

354,534

 

 

$

351,891

 

 

$

346,687

 

Shareholders' equity

 

$

69,237

 

 

$

67,123

 

 

$

65,976

 

 

$

64,106

 

 

$

62,133

 

PERFORMANCE RATIOS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest margin (1)

 

 

3.76

%

 

 

3.65

%

 

 

3.73

%

 

 

3.73

%

 

 

3.89

%

Return on average assets

 

 

0.78

%

 

 

0.85

%

 

 

1.14

%

 

 

0.89

%

 

 

0.96

%

Return on average equity

 

 

8.20

%

 

 

9.35

%

 

 

12.46

%

 

 

9.94

%

 

 

10.83

%

Efficiency ratio (2)

 

 

73.94

%

 

 

74.69

%

 

 

69.11

%

 

 

73.16

%

 

 

75.41

%

Yield on earning assets

 

 

4.28

%

 

 

4.29

%

 

 

4.43

%

 

 

4.46

%

 

 

4.55

%

Cost of funds

 

 

0.55

%

 

 

0.67

%

 

 

0.73

%

 

 

0.76

%

 

 

0.69

%

 

  

(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.

3

 


FAUQUIER BANKSHARES, INC.

Selected Financial Data By Quarter

 

 

At or For the Quarter Ended,

 

(Dollars in thousands, except for ratios)

 

March 31,

2020

 

 

December 31,

2019

 

 

September 30,

2019

 

 

June 30,

2019

 

 

March 31,

2019

 

ASSET QUALITY RATIOS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

$

1,010

 

 

$

989

 

 

$

1,941

 

 

$

2,278

 

 

$

1,969

 

Restructured loans still accruing

 

 

2,425

 

 

 

2,471

 

 

 

2,518

 

 

 

2,979

 

 

 

3,319

 

Loans 90+ days past due and accruing

 

 

1,153

 

 

 

1,636

 

 

 

867

 

 

 

484

 

 

 

1,163

 

Total nonperforming loans

 

 

4,588

 

 

 

5,096

 

 

 

5,326

 

 

 

5,741

 

 

 

6,451

 

Other real estate owned, net

 

 

1,356

 

 

 

1,356

 

 

 

1,356

 

 

 

1,356

 

 

 

1,356

 

Total nonperforming assets

 

$

5,944

 

 

$

6,452

 

 

$

6,682

 

 

$

7,097

 

 

$

7,807

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

$

5,594

 

 

$

5,227

 

 

$

5,395

 

 

$

5,409

 

 

$

5,281

 

Allowance for loan losses to total loans

 

 

0.99

%

 

 

0.95

%

 

 

0.99

%

 

 

0.99

%

 

 

0.97

%

Nonaccrual loans to total loans

 

 

0.18

%

 

 

0.18

%

 

 

0.36

%

 

 

0.42

%

 

 

0.36

%

Allowance for loan losses to nonperforming loans

 

 

121.93

%

 

 

102.57

%

 

 

101.30

%

 

 

94.22

%

 

 

81.86

%

Nonperforming loans to total loans

 

 

0.81

%

 

 

0.93

%

 

 

0.98

%

 

 

1.06

%

 

 

1.18

%

Nonperforming assets to total assets

 

 

0.82

%

 

 

0.89

%

 

 

0.92

%

 

 

0.99

%

 

 

1.11

%

Net loan charge-offs (recoveries)

 

$

(17

)

 

$

259

 

 

$

14

 

 

$

77

 

 

$

(55

)

Net loan charge-offs (recoveries) to average loans

 

 

(0.003

)%

 

 

0.05

%

 

 

0.003

%

 

 

0.01

%

 

 

(0.01

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4