Bank of Fayetteville Takes Big Gain

On March 27, less than a week after Bank of Fayetteville N.A.’s annual shareholders meeting, the bank sold some of its $44 million in government and federal agency securities.

John Lewis, chairman and CEO of the bank, said the firm sold $7.5 million worth of securities and took a $465,000 gain. The move was a hedge against the rising rate environment, following the bank’s recent announcement that its investment portfolio had unrealized gains of more than $1.4 million for the year.

It was also a nicely timed move, since the market dropped the next day.

Lewis said the bank’s decision to restructure its management team one year ago obviously paid off. The 120 shareholders in attendance March 21 heard nothing but good news.

A 22 percent increase in the bank’s trust portfolio, driving it from $50 million a year ago to $61 million over its last fiscal year, was another highlight. That department had income of $220,000.

Gary Garton, the bank’s executive vice president of operations, said Bank of Fayetteville recorded an 8.5 percent return on beginning equity year-over-year. He said the best news, however, was the dramatic portfolio increase.

Larry Olson, executive vice president of lending and chief credit officer, said loans grew 13 percent over the last year, and his department’s gross income was about $9 million. The loan portfolio yield was 9.13 percent, up from 8.67 percent the previous year.

“Because of our relatively low loan-to-deposit ratio,” Garton said in a news release, “the bank had more funds to invest and took that opportunity to invest more aggressively.”