Benchmark Bankshares, Inc. (BMBN), the Kenbridge-based holding company for Benchmark Community Bank, announced unaudited results for the first quarter of 2019. Net income of $2,100,083 was down 1.29 percent from the $2,127,433 earned during the first quarter of 2018, although earnings per share increased from $0.41 to $0.42. Return on average assets declined from 1.45 percent to 1.28 percent and return on average equity declined from 12.52 percent to 11.76 percent when comparing the first quarter of 2019 the same period one year ago.

The biggest impact to earnings resulted from a change to the bank’s payroll processing, whereby employees are now paid every two weeks. Although total salaries expense will be the same over a 12-month period, this change resulted in an additional payroll period during March, increasing the bank’s salary expense by $452,572, or $357,531 net of taxes, for the first quarter. Excluding this additional expense, earnings for the first quarter would have been $2.46 million, or $0.49 per share.

The bank also had an exceptional amount of deposit growth during the first quarter. Total deposits increased by $58.6 million during the first quarter and have increased by $91.3 million over the past 12 months. This growth, combined with an increase in the bank’s cost of funds from 0.40 percent to 0.56 percent, increased interest expense from $515,000 to $812 thousand for the quarter.

Total loans, while down $5.2 million for the quarter, have increased by $36.9 million over the past 12 months. Yield on loans increased from 5.42 percent to 5.57 percent despite the current inverted yield curve. The result was an increase of $796,000, or 12.19 percent, in interest and fees on loans when comparing the first quarter of 2019 to the first quarter of 2018. Overall, the bank’s net interest margin declined from 4.71 percent to 4.64 percent when compared to one year ago due primarily to holding a larger amount of federal funds sold. Net interest income amounted to $7.05 million in the first quarter of 2019, up 10.9 percent from $6.35 million in the first quarter of 2018.

Net charge-offs for the quarter amounted to $50,000, up slightly from $32,000 charged off during the first quarter of 2018. With charge offs remaining low, declining past-due loans, and a decrease in total loans, no provision was made to the loan loss reserve during the quarter. This compares to a provision of $155,908 during the first quarter of 2018, primarily because of loan growth. The current loan loss reserve stands at $5.2 million, or 0.97 percent of total loans.

Foreclosed assets, at $1.7 million, are down from $3.2 million one year ago. The bank incurred expenses, including valuation write-downs, related to foreclosed assets of $137,000 in the first quarter. This compares to $227,000 expensed during the first quarter last year.

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 and is the company’s sole subsidiary which operates a total of 16 banking offices throughout central Southside Virginia and northern North Carolina. Additional information is available at the company’s website, www.BCBonline.com.