To The Stockholders
Romney Bankshares, Inc.
Romney, West Virginia 26757
Net income levels were elevated to their highest point since the year 2007, as our asset quality improved during 2012. The past year has provided us with record balances for total assets and deposits. We have also managed to expand our service facilities in our local community.
Net income for 2012 increased significantly by 18.7% to $1,896,661 compared to $1,598,189 during 2011. The net income was directly improved by the decrease in the amount expensed through our provision for loan losses. The provision for 2012 was reduced to $760,000 compared to $1,200,000 for the prior year. Net interest income also increased by $170,071 compared to the year eneded 2011 and security gains provided a $154,925 increase to income before taxes in 2012. Our income was reduced in 2012 by continued cost of maintaining and disposing of foreclosed real estate. A loss of $322,132 was recorded during 2012 for other real estate owned, through write down or realized losses through sales of various properties.
Total consolidated assets ended the year at the record level of $248,826,946, a slight increase of $2,147,000 over the prior year. The increase is attributed to the record level of total deposit balances at year end. Deposit account balances grew $2,242,000 to $194,624,753 by the end of 2012.
As many financial institutions have struggled to provide stockholders with a return on their investments, our positive earnings and strong capital position has enabled us to provide an increase in the annual dividend paid to our stockholders. The $1.32 per share dividend paid in December, is the highest per share amount in our history and represents an increase over the $1.30 dividend paid in 2011.
Expanded Products and Services
A Customer Service Center was opened in Slanesville, during the fourth quarter of 2012. The Service Center is staffed by Jennifer Smith during weekdays for personal interaction. Services provided include opening checking, savings, and certificate of deposit accounts, wires, gift cards and account changes. Jennifer has over 20 years of experience as a Customer Service Representative, which provides our customers with a familiar face while visiting our newest location. The facility also provides an advanced ATM for 24 hour banking access.
On May 31, 1966 Janie Mathias began her banking career with The Bank of Romney. Janie's retirement from the Bank in 2012 ended a successful 46 year career with us. She was also the last remaining employee that began employment in the old Bank of Romney Building located at the corner of Main and Grafton Streets. In 1988, Janie was promoted to Branch Manager of the newly opened Augusta Branch and until her retirement was Augusta's only manager. During her 46 years the bank has grown from 12 employees to over 100, while she served under three of The Bank of Romney's five presidents. She will be missed by us as well as the Hampshire County community. Filling her position is Kimberly Haslacker. Kimberly has been with the bank for almost 15 years and most recently Branch Manager at our Springfield Branch.
Sharon Parkinson retired in January of 2013 as our Human Resource Officer. The position was developed in 2006 to manage and develop a system for our increasing obligations toward employees and related benefit and compensation laws and regulations. Sharon brought decades of knowlege from past companies that proved vital in the development of a human resource function structure. The Bank of Romney would like to wish her the very best in her retirement and our thanks for the framework she has developed for future guidance. Tabitha Bean has been promoted to Human Resource Coordinator in order to maintain and continue to enhance the current HR structure. She has worked for The Bank of Romney for 9 years and with Sharon during the last half of 2012. She graduated from Shepherd University with a degree in Business Administration with a concentration in Human Resource Management. The department is in capable hands.
Federal Reserve disclosures have indicated that rates will remain low during the next two years. The low rates will continue to put stress on fixed income individuals as well as our net interest income margin as borrowers continue to refinance debt at lower rates. The past five years have been difficult for the banking industry as nearly 500 banks have failed throughout the country. New federal laws and regulations will also add to the challenges of the upcoming year. Our success looking into 2013 continues to depend on the strength and support of our customers, stockholders and employees.
As always feel free to stop by any of our convenient locations in Romney, Capon Bridge, Augusta, Springfield, Paw Paw or Sunrise for personal attention.