To the Stockholders
Romney Bankshares, Inc.
Romney, West Virginia 26757
The past year has produced record consolidated earnings for Romney Bankshares, Inc. and its subsidiary, The Bank of Romney. Continued positive growth has also produced record levels for assets, loans and deposits. These levels were achieved despite expected costs that occur with branch expansion and a downturn in the local and national economy.
Financial Results
While loan and deposit totals rose during 2007, an increase in net interest income was not the cause of our income growth as has been the case in prior years. Income growth in 2007 can be largely attributed to increases in other income generated from newer products and investments at the Bank. The income growth can also be attributed to the dramatic reduction in costs attributed to loan losses. The reduction in loan losses is a direct component of stronger loan quality and collection and recovery efforts. The benefit of lower loan losses also comes during a year in which larger financial institutions are rporting record write-offs from substandard loan portfolios. Net income for 2007, of $2,408,800 increased by $34,605 or 1.5% compared to the income level of $2,374,195 for 2006.
Interest paid to depositors continued in rise in 2007 by 30.8% to $4,418,561 compared to $3,378,995 in 2006. Year end deposits climbed to $163,190,107 in 2007 compared to $158,981,957 at the end of 2006. Loan balances rose in a similar fashion to $159,955,770 in 2007 from $155,183,023 in 2006, an increase of 3.1%. Total assests increased to $217,313,974 compared to $210,645,153 in the prior year. Positive earning trends and a strong capital position has enabled us to provide another increase in dividends paid to the stockholders. The $1.30 per shares dividend paid in December, represents an increase over the $1.25 dividend paid in 2006. The increase marks the twelfth consecutive year an increase in annual dividends has occured.
Growth and Expansion
Our commitment to Hampshire County and the surrounding area was further emphasized by our opening of the Sunrise Branch on April 11, 2007. This branch includes our full menu of quality services and products and we believe that it is and remains the most modern and technologically advanced branch in our area.
Management
During 2007, management has remained stable, with few major changes in our management structure. One significant change did occur as long as customer service officer Bonnie Smith, decided to retire from her present duties at The Bank of Romney. Bonnie began her career with us in 1973 and has worked in many areas of the Bank. Always with a smile and terrific attitude. Bonnie has meant a great deal to the success of the Bank and satisfaction of our customers. She will still work part-time with us maintaining a role of interpreter to the hearing impaired community and receptionist.
There have however, been many new faces at The Bank of Romney as we have grown to over 100 employees. New employees have been added due to the additon of a new branch. Some have transferred to different branches or departments to provide an even mix of experience. A few employees have been hired as replacements for retiring or resigning staff members, or as new positions have been established.
Future Perspective
Sudden and steep Federal Reserve actions reducing interest rates and the media's portrayal of recession and economic hardship will in some measure affect the near term financial performance of your Bank. Given the strength of our loan portfolio and capital position as mentioned in our financial results we feel we are in a stronger and more stable position than many financial institutions. Interest only, high risk, or no equity loans have never been part of our underwriting standards.
Despite economic uncertainty for 2008, positive changes are planned to occur. A recent upgrade to our Augusta Branch to provide customers with more room and privacy has recently occured. A slight renovation and construction of a drive thru ATM at the main office is planned to provide easier access and informational services. A planned expansion of our PAW PAW Branch is also being considered to handle the growth that has occured at that branch. With these challenges ahead, our trust and appreciation goes out to all of the customers, stockholders, and employees who will make 2008 another year of success.
Marlin C. Biggs, President
Romney, Bankshares, Inc.
Lawrence E. Foley, President
The Bank of Romney
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.
FINANCIAL RESULTS
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