2021-4-27

Benchmark Bankshares, Inc. Reports First Quarter Earnings

KENBRIDGE, VA – Benchmark Bankshares, Inc. (BMBN), the Kenbridge-based hold­ing company for Benchmark Community Bank, announced unaudited results for the first quarter of 2021. Net income of $2,775,123 was up from the $2,110,986 earned during the first quarter of 2020, while earnings per share increased from $0.47 to $0.61 for the period.

“Lending activity through the first quarter has been strong,” observed Jay A. Stafford, President and CEO. “In addition to a robust residential mortgage and commercial real estate market, the second round of Paycheck Protection Program (PPP) loans have kept our loan officers busy.”

Stafford added, “It is hard to believe that we are over a year into the pandemic. We operated most of last year with our lobbies closed, assisting customers via personal appointments, internet banking, BCB Mobile app, and using our ATMs and telephone banking. I am pleased to report that we are now again operating with our lobbies open, allowing us to return to meeting our customers in person while following guidelines designed to keep everyone healthy.”

The federal government’s CARES Act, adopted on March 27, 2020, continues to provide an additional opportunity for the bank to serve business customers adversely impacted by the COVID-19 event. It has also fueled the bank’s deposit growth through a combination of PPP loan proceeds and stimulus payments to both individuals and municipalities.

“We began working on PPP loans in March of last year,” Stafford explained. “We continue working with customers, helping them navigate through the SBA loan forgiveness process while at the same time helping customers qualify for additional funding.”

“This has certainly been an extraordinary and difficult time in our nation’s history. We continue to deal with COVID-19, but things have slowly begun to return to normal across the country. We are proud to serve our local communities and continue to meet the banking needs of our customers at our branches and through our electronic delivery channels.”

Notable Items:

  • A total of $70,411 was provisioned to the loan loss reserve during the quarter, compared to a provision of $224,589 made during the first quarter of 2020.
  • Interest expense on borrowings, used to support the stock repurchase program, amounted to $50,832 for the period, down from $78,062 recognized last year during the same period.
  • Total loans are up $12.47 million for the quarter, with total loans up by $38.81 million over the last twelve months.
  • Deposit growth during the first quarter amounted to $79.74 million, with total deposits up $228.26 million over the past twelve months. This growth has been driven by the PPP loan program and government backed stimulus payments to both individuals and municipalities.
  • The bank’s overnight cash position was $205.33 million as of March 31, 2021, up from $28.61 million one year ago.

Key Financial Ratios:

  • Return on average equity (ROAE) increased from 12.08% to 14.33% and Return on average assets (ROAA) increased from 1.19% to 1.21% for the quarter.
  • Yield on loans decreased from 5.46% to 5.30%.
  • The bank’s cost of funds decreased from 0.63% to 0.33%.
  • Net interest margin was down from 4.49% to 3.63% due to a large amount of cash holdings.

As of March 31, 2021, the current book value of the company was $17.42 per share compared to $15.72 one year ago. The closing share price at quarter-end was $18.75 per share, which represents a price to book trading ratio of 107.61%. The company currently has 4,532,320 shares outstanding.

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, VA. It is the company's sole subsidiary and operates a total of 17 banking offices throughout central Southside Virginia and northern North Carolina. Additional information is available at the company’s website, www.BCBonline.com.

Commissioner Saul Communicates to Congress about the State of Social Security Services

Andrew Saul, Commissioner of Social Security, wrote to key members of Congress to raise awareness of the resources Social Security needs to recover from the ongoing pandemic and improve service.

“Since becoming Commissioner, I have focused our actions and our resources on efforts to improve the service we provide to the millions of people who turn to us for help. I have been clear in my budget requests about what it takes to improve service and maintain the integrity of our programs: both additional frontline staff to help people now, and information technology (IT) investments to improve our future,” said Commissioner Saul.  “2021 is a critical year to shape the agency for post-pandemic success, but our resource constraints will delay our recovery. I appreciate President Biden’s support of our needs with his FY 2022 budget request of nearly $14.2 billion for us, which is $1.3 billion more than what we received this year to operate our agency. No one anticipated the duration of the pandemic and the ongoing challenges it presents.”

The full text of the letter follows:

April 21, 2021

The Honorable John B. Larson
Chair, Subcommittee on Social Security, Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515

Dear Subcommittee Chair Larson:

I am writing because I want to be clear about the negative impact to Social Security services due to the ongoing pandemic and our funding level in fiscal year (FY) 2021. Our FY 2021 annual appropriation was nearly $900 million less than my original request. It is effectively level with the funding we have received for each of the last four years, despite significant increases in costs that we do not control – such as the Government-wide pay increases.

The pandemic has resulted in unprecedented changes. The safety of the public and our employees has been the paramount driver of how we deliver services during the pandemic. To protect the public and our employees, we have necessarily limited in-person service to critical situations that can only be resolved in-person. While we continue to serve the public over the phone and online, we are still experiencing issues receiving and verifying documents and medical evidence we need to make decisions. Even with fewer applications in FY 2021, pandemic-related challenges and operational constraints present numerous barriers to employees completing workloads timely. In FY 2020, the average time it took us to complete an action in our field offices increased by 20 percent, significantly reducing our productivity. We are working diligently to address these challenges, but the abrupt changes to the way we do our work has caused bottlenecks in certain workloads and service deterioration beyond our control. On February 23, 2021, we shared with your staff the potential implications of our FY 2021 funding level to further harm services.

However, our operational challenges have been aggravated by our inability to fully use our program integrity funding. To use this funding, we must complete cost-saving continuing disability reviews (CDR) and Supplemental Security Income redeterminations. We have had to reduce our planned full medical CDRs by 30 percent due to the pandemic, the lowest level since FY 2013. We deferred these workloads in the early part of the pandemic to protect beneficiaries’ income and healthcare and to reduce the burden on the medical community, which had stopped most elective services.

While we restarted these workloads at the end of FY 2020, we are handling them through the mail and over the phone. During the pandemic, these complex workloads often require multiple contacts with a beneficiary, which slows our ability to complete this work. In addition, over 30 percent of our initial disability claims and CDRs require a consultative exam (CE) with a medical provider so that we can obtain enough medical information to make a decision. Right now, just over 70 percent of our CE providers are scheduling in-person exams. We have focused our limited CE capacity on initial disability claims to ensure that we can provide benefits to people who qualify. Even with that focus, the average processing times for initial disability claims increased about 45 days in the last year. Ultimately, we currently estimate the constraints on our program integrity funding deepens our shortfall by approximately $200 million.

Since becoming Commissioner, I have focused our actions and our resources on efforts to improve the service we provide to the millions of people who turn to us for help. I have been clear in my budget requests about what it takes to improve service and maintain the integrity of our programs: both additional frontline staff to help people now, and information technology (IT) investments to improve our future. IT is fundamental to offering the public more electronic and online options they expect from organizations today, improving the technology to make it easier for our staff to help the public, and ensuring we have a safe, modern platform to support over $1 trillion in benefits payments each year.

I have frozen hiring in non-frontline positions so that we can push all available resources to the offices that directly serve the public. I have increased the staffing in our field offices, national 800 number, processing centers, and State disability determination services (DDS) by nearly 3,000 people since 2019. I have increased IT investments to accelerate our modernization and increase online service options.

We are working with the advocate community to help ensure that the most vulnerable populations can access our services. Our efforts include a robust communications campaign, in combination with a wide range of online resources, to provide information on service options for the beneficiary and individuals or organizations that help them.

I also decided to pay employee awards so they know that we appreciate their hard work and dedication, especially during this difficult time. I have pushed the agency to find creative ways to maintain these efforts despite the significant cut to our budget request this year.

We have explored all possibilities to eliminate our budget shortfall but we are unable to overcome it. I have no other option but to delay our planned hiring to operate within our appropriated resources. Further, we will not be able to compensate for fewer employees with additional overtime. We are operating with the lowest level of overtime in the last decade. These decisions have a lasting negative impact on the service we can provide to the American public. It will increase waits for service from our field offices and on our 800 number as we begin to emerge from the pandemic. The number of pending actions in our processing centers will grow from about 3.7 million actions pending at the end of FY 2020 to more than 4.2 million actions pending by the end of FY 2021. It will delay our plan to eliminate the backlog of cases in the DDS, which currently has about 20 percent more pending cases than prior to the pandemic, as we anticipate an increase in disability receipts into FY 2022.

The pandemic has changed the way we do work at SSA in unprecedented ways. At the start of the pandemic, we transitioned to remote work, focused on critical service workloads through online and telephone options, and suspended some adverse actions to protect the public during an especially critical time. The pandemic required necessary operating adjustments to safely serve the public, reducing our ability to complete our workloads and contributing to increased backlogs and wait times in some priority service areas. These novel factors prevented us from achieving some of our goals in FY 2020 and put our goals for FY 2021 and future years at risk. FY 2021 is a critical year to shape the agency for post-pandemic success, but our resource constraints will delay our recovery.

I appreciate President Biden’s support of our needs with his FY 2022 budget request of nearly $14.2 billion for us, which is $1.3 billion more than what we received this year to operate our agency. No one anticipated the duration of the pandemic and the ongoing challenges it presents. I hope you will consider these challenges and support his request to help us improve service.

Sincerely,

Andrew Saul

Commissioner

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