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Benchmark Bankshares reports increased first quarter earnings

Benchmark Bankshares, Inc. (BMBN.OB), the Kenbridge-based holding company for Benchmark Community Bank, announced earnings of $1,520,287, or $0.59 per share, for the first quarter of 2012.

 Earnings for the quarter were $384,849, or 33.9 percent, higher than the $1,135,438, or $0.44 per share, posted during the same period last year.  Return on average equity for the quarter was 13.73 percent and return on average assets was 1.46 percent, compared to 11.87 percent and 1.11 percent, respectively, reported for the first quarter of 2011.   

The demand for new loans continues to be low despite interest rates that remain at or near record-low levels.  Total loans at quarter-end amounted to $333.6 million, down $288 thousand for the quarter and up $5.6 million from one year ago.  Despite a decline in loan yield from 6.76 percent to 6.65 percent, interest and fees earned on loans increased by $88 thousand when comparing the first quarter of 2012 to the first quarter of 2011.

Deposits, which have remained flat compared to one year ago, increased by $4.5 million during the first quarter of 2012.  Time deposits have declined by $20.2 million during the past twelve months, with approximately $7.0 million of that decline attributable to brokered deposits that were allowed to mature without replacement.  Countering the decline in time deposits was a $13.4 million increase in checking accounts, $5.9 million of which was in non-interest bearing accounts, and a $6.1 million increase in savings and MMDA accounts.  The interest rate environment has kept deposit rates low, reducing the bank’s cost of funds from 1.54 percent to 1.12 percent.  As a result, interest expense for the quarter declined from $1.4 million to $1.0 million and the bank’s net interest margin increased from 4.65 percent to 5.15 percent. 

Net charge offs for the quarter amounted to $86 thousand, down significantly from the $874 thousand charged off in the first quarter of 2011.  Overall asset quality at the bank remains very strong.  As a precautionary measure, the bank expensed $462 thousand to the loan loss reserve during the quarter, down from the $537 thousand expensed during the first quarter last year.  The current loan loss reserve stands at $5.4 million, or 1.62 percent of total loans, compared to $4.1 million, or 1.27 percent of loans, one year ago.   

President Mike Walker said, “Although we continue to face challenges related to the sluggish economy, the results of this first quarter were outstanding.  We continue to attract new customers and transactional deposit accounts.  We are investing more capital into our markets with the remodeling of our Lawrenceville branch and the planned construction of a new office in Clarksville.  Although loan demand is still not where we want it to be, we are seeing some encouraging signs as we all strive to put these difficult economic times behind us.”  

The common stock of Benchmark Bankshares, Inc. trades on the NASDAQ market as an Over-the-Counter Bulletin Board stock under the symbol BMBN.OB. 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, VA, and is the company's sole subsidiary that operates 12 banking offices throughout central Southside Virginia.  

Additional information is available at the company’s website, www.BCBonline.com.