Dear Shareholders,
As The Farmers Bank of Appomattox begins another strong year of operation, I am pleased to report on the
financial performance and results of operations for the first quarter 2016. The Bank has continued our previous year
trend of improved earnings and solid growth. Net Income of $477 thousand for the first quarter of 2016 represents an
increase of $61 thousand over earnings for the first quarter of 2015. This equates to a 14.79 % increase and a strong
Return on Average Assets of 0.85%. Earnings were driven by a $120 thousand increase in net interest income and a $16
thousand decrease in noninterest expense, which offset a $13 thousand increase in the provision for loan losses and a $9
thousand decrease in noninterest income.
The Bank experienced total asset growth of $4.9 million (2.18%) as of March 31, 2016 compared to December
31, 2015, resulting in quarter-end total assets of $227.7 million. Deposits grew $3.8 million to $196.5 million, with the
increase being predominantly in core deposits. The Bank also experienced growth in loans of $1.4 million or 1.09%.
The loan growth primarily came from general consumer lending and commercial mortgages. This loan growth continued
a trend that began in second quarter 2015 with resulting loan growth of $9.0 million (7.56%) since March 31, 2015.
Management believes this growth trend reflects a strengthening in consumer confidence amid a slight improvement in
local economic conditions.
Capital ratios for the Bank remain strong. Our total risk-based capital ratio of 19.66% is well above the threshold
for a well-capitalized bank. This helps ensure that we have a firm foundation to meet the challenges of the future. With
the ever-changing banking environment, your management team is continually examining ways to expand our offerings.
There is quite a demand to meet the emerging technological expectations of a growing mobile society. While we currently
promote our internet and mobile banking delivery channels, we are also negotiating with our core provider for additional
enhancements and services.
We are a hometown, “main street America” bank, and as such we remain dedicated to our mission of being a
beneficial partner in the communities in which we serve. This past February, many of our customers experienced the
wrath of the tornado that passed through Appomattox County. We, as a Bank, were quick to provide assistance to those
in need and especially our customers who were so severely affected. As a community bank, we stand ready to help this
community as they recover and rebuild. This is just one small example of a long-standing tradition of giving back to our
communities. This tradition is highlighted by employee involvement, favorable services for non-profit organizations and
valuable corporate donations supporting those communities we serve.
We greatly appreciate your loyalty and support. As a shareholder, you provide the means by which we operate and
we pledge to enhance your shareholder value. I encourage you to recommend our services to your friends and neighbors.
I also invite you to remain an involved participant in this great institution known as hometown community banking.
Sincerely,
John R. Caldwell
President & CEO
RONALD C. SPIGGLE
Chairman of the Board
JOHN R. CALDWELL
President and Chief Executive Officer
BRUCE S. DRINKARD
Senior Vice President
QUARTERLY
FINANCIAL
STATEMENT
March 31, 2016
JANE H. KELLY
Senior Vice President
MICHAEL F. LEDIN
Senior Vice President
DAWN S. TOLLEY
Senior Vice President
Directors
WATKINS M. ABBITT, JR.
JOHN R. CALDWELL
THOMAS D. EVANS, JR.
ALISON F. GOBBLE
LAURIE S. HARRIS
BENJAMIN H. JOHNSON
ALFRED L. JONES, III
R. KINCKLE ROBINSON
RONALD C. SPIGGLE
LUTHER C. THOMAS
DOUGLAS M. WEBB
FLOYD E. WILLIAMS
www.thefarmersbankva.com
THE FARMERS BANK OF APPOMATTOX
Consolidated Statements Of Income (Unaudited)
(In thousands of dollars, except per share data and stock prices)
THE FARMERS BANK OF APPOMATTOX
Consolidated Balance Sheets
(In thousands of dollars, except share and per share data)
Cash and cash equivalents
Cash and due from banks
Federal funds sold
(Unaudited)
ASSETS
March 31, 2016
$
3,986
6,116
(Audited)
December 31, 2015
$
4,338
3,169
Total cash and cash equivalents
10,102
7,507
Securities
Available-for-sale, at fair value
Held to maturity, at amortized cost
60,228
18,781
59,595
18,447
127,940
2,541
1,068
5,589
112
175
1,194
126,559
2,554
1,155
5,549
141
175
1,186
Loans, net
Bank premises and equipment, net
Accrued interest receivable
Investment in bank-owned life insurance
Prepaid pension expense
Other real estate owned
Other assets
Total assets
$
217,628
227,730
$
215,361
222,868
$
Total deposits
Securities sold under repurchase agreements
Accrued interest payable
Deferred income tax
Other liabilities
Total liabilities
Stockholders’ equity
Common stock, $2 par value. Authorized, 1,600,000 shares;
issued and outstanding, 1,083,660 shares
Surplus
Retained earnings
Net accumulated other comprehensive gain (loss)
37,043
42,368
47,122
$
$
36,942
40,614
45,629
36,238
33,702
35,300
34,195
196,473
192,680
1,671
102
676
430
1,418
100
462
294
199,352
194,954
2,167
1,000
24,999
212
2,167
1,000
24,956
(209)
28,378
Total stockholders’ equity
Total liabilities and stockholders’ equity
Interest and fees on loans
Interest on securities
U.S. Government-sponsored agencies
Obligations of states and political subdivisions – nontaxable
Obligations of states and political subdivisions – taxable
Corporate obligations
Corporate certificates of deposit
Interest on federal funds sold
$
227,730
27,914
$
222,868
1,565
$
1,490
96
222
189
59
6
4
87
216
192
60
7
3
2,141
2,055
Interest on deposits
Interest on time certificates of $100 and over
Interest on securities sold under repurchase agreements
130
99
1
154
108
1
Total interest expense
230
263
1,911
1,792
13
-
1,898
1,792
Service charges on deposit accounts
Gain on sales and calls of securities
Other
141
73
139
84
Total noninterest income
214
223
847
119
536
825
116
577
1,502
1,518
610
497
133
81
Total interest income
Interest Expense
Net interest income
Provision for loan losses
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits
Demand – noninterest bearing
Demand – interest bearing
Savings
Time:
Certificates of deposits of $100 and over
Other
Interest Income
Three Months Ended
3/31/2016
3/31/2015
Net interest income after provision for loan losses
Noninterest Income
Noninterest Expense
Salaries and employee benefits
Expenses of premises and equipment
Other operating expenses
Total noninterest expense
Income before income tax expense
Income tax expense
Net income
$
477
$
416
Per share data:
Earnings per share
$
0.44
$
0.38
Stock prices first quarter 2016
$
High
19.30
$
Low
19.00