Shenandoah Valley Business Journal by Daily News-Record

BUSINESS JOURNAL A Byrd Newspapers Publication

Shenandoah Valley

Volume Volumexx, 16,No. No.xx, 4, Xxx. Feb. 25, 23, 2015 2016

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SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, February 23, 2016

BUSINESS JOURNAL Inside This Issue Shenandoah Valley

The Shenandoah Valley Business Journal is a monthly publication of Rockingham Publishing Company, Inc., 231 S. Liberty St., Harrisonburg, VA 22801.

Editorial Staff Editor and General Manager: Peter S. Yates

Focus Section: Residential Real Estate ■ Market Back To A Healthy Level . . . . . . . . . . . . .Page 8

Other Business News

Harrisonburg, Va.

■ First National’s 2015 ‘Transformational’. . . . . . . Page 10

By email:

■ Blue Ridge Bankshares Sets Another Record . . . Page 13

svbjnews@dnronline.com

■ Farmers Hear Benefits Of No-Till . . . . . . . . . . . Page 14

By fax: 433-9112

Columns ■ Movers and Shakers. . . . . . . . . . . . . . . . . . . . . . . .Page 2

By phone:

Managing Editor: Jerry Blair

■ Valley Business Scene . . . . . . . . . . . . . . . . . . . . . Page 2

574-6281 (news) 574-6229 (ads)

Staff writers: Vic Bradshaw

■ Investments by Matthew Frakes. . . . . . . . . . . . . . .Page 4

■ Investments by Gannon Irons . . . . . . . . . . . . . . . . Page 3

■ News To Me by Philip B. DuBose . . . . . . . . . . . . Page 5

Contributing photographers: Daniel Lin

■ Real Estate by Tim Reamer . . . . . . . . . . . . . . . .. Page 12 ■ Local Ledger . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 15

On The Cover: Daniel Lin / DN-R Funkhouser Real Estate Group associate broker Scott Rogers (right) shows a house on Park Road in Harrisonburg to Mike Souder of Mount Sidney.

Alderfer Elected To Directors Of The Pioneer Network

Immerge Technologies Honors Bergdoll As Employee Of Year

Union Bankshares Corp. Declares Quarterly Dividend

United Bankshares Increases Quarterly, Annual Earnings

HARRISONBURG — Rodney D. Alderfer, president of Bridgewater Retirement Community, has been elected to serve on the board of directors for Pioneer Network, according to a press release. Pioneer Network is a national nonprofit organization headquartered in Rochester, N.Y., that advocates for person-directAlderfer ed care at long-term care facilities. Founded in 1997 by industry professionals, it has evolved into a center for innovators and thought leaders in the field of aging. BRC’s top administrator since 2008, Alderfer has helped the community transition to a resident-centered nursing program from a traditional medical model.

HARRISONBURG — Immerge Technologies recently honored Joanna Bergdoll with its first-ever Employee of the Year award. Bergdoll, a project manager for the Harrisonburg web development and software design company, was selected based on recommendations from fellow workers. The award, according to a press release, is presented to “employees who display extraordinary dedication to their customers.” A Bridgewater resident, she was cited for organizing the company’s financials, establishing project tracking systems and helping select software to make estimates, projects and financials more accurate. Immerge is a division of Waynesborobased McClung Cos. — Vic Bradshaw

HARRISONBURG — Union Bankshares Corp. (NASDAQ: UBSH) announced Jan. 28 that it had declared a dividend of 19 cents a share for the fourth quarter of 2015. The amount is the same as the third quarter but is 4 cents, or 27 percent, greater than the fourth-quarter 2014 dividend. The dividend is payable on Feb. 26 for shareholders of record as of Feb. 12. Richmond-based Union Bankshares is the parent company of Union Bank & Trust, which operates 124 branches around Virginia, as well as Union Mortgage Group Inc. and Union Insurance Group LLC. It has two branches in Harrisonburg and one in Grottoes.

HARRISONBURG — United Bankshares Inc. (NASDAQ: UBSI) increased its fourthquarter and annual earnings in 2015. The parent company of United Bank reported on Jan. 28 that it netted $33.5 million in the fourth quarter, up from $33.3 million in the same period a year earlier. Both net income amounts equated to 48 cents per diluted share. The fourth-quarter performance boosted the company’s net income to $138 million, or $1.98 per diluted share, compared to $129.9 million, or $1.92 per diluted share, in 2014. “The year of 2015 was another successful year for United Bankshares,” Richard M. Adams, its chairman of the board and CEO, said in a press release. “We increased diluted earnings per share from $1.92 to $1.98, achieving record earnings

— Vic Bradshaw

See MOVERS, Page 6

— Vic Bradshaw

See SCENE, Page 7

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Investments Gannon Irons

How Should You Respond To Market ‘Correction?’

s an investor, you may be gaining familiarity with the term “market correction.” But what does it mean? And, more importantly, what does it mean to you? A correction occurs when a key index, such as the S&P 500, declines at least 10 percent from its previous high. A correction, by definition, is short-term in nature and has historically happened fairly regularly — about once a year. However, over the past several years, we’ve experienced fewer corrections, so when we have one now, it seems particularly jarring to investors. How should you respond to a market correction? The answer may depend, to some extent, on your stage of life. ■ If you’re still working: If you are in the early or middle parts of your working life, you might not have to concern yourself much about a market correction because you have decades to overcome a short-term downturn. Instead of selling stocks, and stock-based investments, to supposedly “cut your losses,” you may find that now is a good time to buy more shares of quality companies, when their price is down. Also, you may want to use the opportunity of a correction to become aware of the need to periodically review and rebalance your portfolio. Stocks, and investments containing stocks, often perform well before a correction. If their price has risen greatly, they may account for a greater percentage of the total value of your portfolio — so much so, in fact, that you might become “overweighted” in stocks, relative to your goals, risk tolerance and time horizon. That’s why it’s important for you to proactively rebalance your portfolio — or, during a correction, the market may do it for you. To cite one aspect of rebalancing, if

your portfolio ever does become too “stockheavy,” you may need to add some bonds or other fixed-rate vehicles. Not only can these investments help keep your portfolio in balance, but they also may hold up better during a correction. ■ If you’re retired: After you retire, you may need to take money from your investment accounts — that is, sell some investments — to help pay for your cost of living. Ideally, however, you don’t want to sell stocks, or stock-based vehicles, during a correction — because when you do, you may be “selling low.” Remember the most common rule of investing: Buy low and sell high. It’s not always easy to follow, but it’s still pretty good advice. So, to avoid being forced into selling, you need to be prepared. During your retirement years, try to keep at least a year’s worth of cash instruments on hand as well as short-term fixed income investments. By having this money to draw on, you may be able to leave your stocks alone and give them a chance to recover, post-correction. And it’s important to maintain a reasonable percentage of stocks, and stockbased vehicles, in your portfolio, even during retirement — because these investments may provide the growth necessary to help keep you ahead of inflation. Consequently, as a retiree, you should have a balance of stocks and stock-based vehicles, along with fixed-income vehicles, such as bonds, certificates of deposit, government securities and so on. Being prepared can help you get through a correction — no matter where you are on life’s journey. This article was written by Edward Jones for use by Gannon Irons, a financial adviser with Edward Jones in Harrisonburg. To contact him, call 433-4907.

Tuesday, February 23, 2016

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Need More Money? Four Moves To Consider A common question financial ad visers hear from clients is, “How can I save more than I’m saving now?” Fortunately, there are several ways you can accomplish that goal with a bit of professional help. Consider the following:

Monitor Expenses Lowering your expenses by a modest amount such as 1 percent could allow you to boost your savings initiatives as much as a comparable increase in pay. To gain insights into your current spending habits, consider downloading a budgeting app for your smartphone. They’re much easier to use than they used to be and make expense tracking very simple. For example, many apps allow you to record your income and spending on the go, incorporating information from various accounts, in order to have an up-to-the-minute overview of your financial standing each day. You can then look for inefficiencies and ways to economize.

Reduce Credit Card Expenses

On average, each U.S. household with credit card debt owes a balance of more than $15,000. You can eliminate such debt faster — and start saving more — by paying more than the minimum monthly amount on your credit cards each month. For example, assume you have a $1,000 credit card debt with a 12 percent interest rate. By paying $20 each month, it would take 67 months to eliminate the debt and would cost you $353.43 in interest. But by doubling your monthly payment to $40, you would be out of debt in just 27 months. Your interest costs would be less than half, $103.28. Then, when you finish paying off your balance, redirect the money you’d been spending on debt each month to a savings or investment account. Another way to tackle debt expenses aggressively is by consolidating credit card balances to a single, lower-rate card. Comparison shop for the best rates, but beware of “teaser” rates that start low then jump higher after an initial introductory period ends.

Investments

Matthew R. Frakes

Boost Contributions If you participate in a workplace retirement plan, consider increasing your contribution by an additional 1 percent or 2 percent of income. Even if you think that may be too much, try it out for a few months. The extra effort could make a big difference down the road: Contributing even $20 extra each week could provide you with an additional $87,493 after 30 years (before taxes), assuming 6 percent annual investment returns.

Use Windfalls Wisely While it may be tempting to spend a

windfall — such as an inheritance or workplace bonus — on something fun, it’s probably a better idea to use the money to enhance your long-term financial standing. For example, assuming you invest a $2,000 windfall in an account earning a 6 percent annual rate of return, it could grow to $2,698 after five years, $6,620 after 20 years or $12,045 after 30 years (before taxes). Article by Wealth Management Systems Inc. and provided courtesy of Matthew Frakes, a Morgan Stanley financial adviser in Harrisonburg.Contact him at www.morganstanleyfa.com/thefrakesgroup.

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, February 23, 2016

Make Job Expectations Clear To Employees T

hat’s the recommendation offered in the January issue of Talent Development, in response to a Gallup research that found that only half of employees understand what’s expected of them at work. The solution is more than a well-written job description. It involves employees understanding how their work aligns with the organization’s mission and goals. To make this happen, managers can do three things to make sure that employees understand their jobs: help employees set work priorities, hold employees accountable for their performance, and make themselves accessible to employees who have questions or concerns. The above actions have been statistically linked to better performance outcomes. Research by Gallup found that clarity of expectations contributes up to ten percent gains in productivity, and can reduce the number of workplace safety incidents by as much as 20 percent. Moreover, the better a manager is at

doing the three things identified in the preceding paragraph, the more likely his or her employees will be engaged. It’s difficult for employees to meet performance expectations when they’re not sure what’s expected of them. Managers who set clear expectations, stay in touch with employees, and offer assistance when it is needed will ultimately inspire higher performance.

Importance Of Merit Raises Do merit increases promote sustained performance improvement? That question is the focus — and title — of an intriguing article in the February issue of HR Magazine. The question is answered in a way that addresses both the pros and cons, with the key issues identified in the process. Those who believe that merit increases fail to promote sustained performance improvement contend that such increases are not significant or consistent enough to have any positive impact. Asserting that

the key word is “sustained,” the naysayers state that merit increases may have a temporary positive effect on performance, but the performance typically does not last long enough to make a real difference. In addition, as work-life balance continues to increase in importance, employees may opt not to pursue a path to merit pay at all, if the path requires long hours in an unfulfilling job, choosing instead to spend more time with family. Proponents of merit increases assert that the matter is simple psychology — people respond to rewards. They argue that whenever merit pay fails to get the desired results, the problem is not merit pay, but rather a problem of implementation. Advocates stress that, in order to be successful, a merit system must meet several key criteria — support from top management, well-defined objective performance

See JOB, Page 7

NEWS to

— By Philip B. DuBose

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, February 23, 2016

Harrisonburg, Va.

DCCU’s Campbell, First Bank’s Jordan Among Valley Business Movers And Shakers Movers

FROM PAGE 6

Campbell Hired At Valley Credit Union HARRISONBURG — DuPont Community Credit Union has hired John Campbell as its director of marketing. Campbell’s more than 20 years of marketing experience includes work in consumer research, new product development, brand and digital strategy, and integrated campaign management, according to a press release. Most recently he was vice president of marketing and communication at the University of Virginia and senior brand manager at Capital One. In his new role, he’ll

lead the development and execution of the credit union’s marketing strategy. DCCU is a nonprofit financial cooperative that operates 12 branches in the central Shenandoah Valley. — Vic Bradshaw

McClung Recognizes Employee Of Quarter WAYNESBORO — Craig Bennett was recently chosen employee of the quarter at McClung Cos. Bennett is an estimator, quality coordinator and leads the company’s safety program. Established in 1992, the award is based on recommendations from fellow workers and recog-

nizes McClung employees who display extraordinary dedication to their jobs. According to a press release, Bennett has worked 10 years at McClung and 33 years in the industry. He lives in Waynesboro with his family. McClung, based in Waynesboro, serves the graphic communication industry. Immerge Technologies, McClung’s Web development and software design company, has its offices in Harrisonburg. — Staff Reports

Jordan Hired As Assistant Vice Pres HARRISONBURG — First Bank & Trust Co. has hired veteran banking professional Jay Jordan as an

assistant vice president and manager of its Bridgewater branch. Jordan, who Jordan most recently worked for Wells Fargo & Co., has been in the industry for 26 years, according to a press release. She will assist consumer and business customers with deposits and loans. First Bank & Trust is a subsidiary of First Bancorp Inc., based in Lebanon. The company operates in western Virginia and eastern Tennessee, including branches in Harrisonburg and Bridgewater. — Vic Bradshaw

Farm Credit Adds Daubert To Its Staff HARRISONBURG — Farm Credit of the Virginias has added Rebecca Daubert to its staff of loan officers at Daubert its Harrisonburg office, according to a news release. Daubert, who was raised on Pennsylvania dairy farm, earned a bachelor’s degree in dairy science from Virginia Tech. She helps operate a local family dairy. Before joining Farm Credit, she was an agriculture economic development and outreach coordinator for Cornell Cooperative Extension in New York, a sales and estimat-

ing coordinator for a renewable energy company, and a bookkeeper. Farm Credit of the Virginias is a cooperative that provides financing to more than 10,000 farmers, agribusinesses and rural homeowners in parts of Virginia, West Virginia and Maryland. — Vic Bradshaw

Mansfield Earns Society’s Certification HARRISONBURG — Cate Mansfield, president and CEO of Anicira Veterinary Center, has earned a certified animal welfare administrator credential from the Society of Animal Welfare Administrators. The credential, according to a press release, is the highest professional designation in the animal welfare or animal control field. To receive it, executives and managers who work for nonprofit or municipal organizations must demonstrate their leadership and management abilities and animal welfare experience and pass a rigorous, comprehensive exam. Mansfield founded Anicira as the Shenandoah Valley Spay/Neuter Clinic in 2005. Since then the nonprofit has performed more than 150,000 free sterilization procedures, services valued at more than $1 million.

The Myrias Group, a private wealth advisory practice of Ameriprise Financial Services Inc., as an associate financial adviser and financial planning specialist. His office is at 4030 Quarles Court. According to a press release from the firm, as an associate financial adviser, Kyger provides one-on-one relationships and financial advice to clients based on their needs and expectations. For more information, contact Joshua Kyger at 434-4956. — Staff Reports

Knicely Opens Her Own Brokerage Firm HARRISONBURG — Veteran local real estate agent LaDawn Knicely recently opened her own real estate brokerage firm, Hometown Realty Group. Knicely has been an agent in the Shenandoah Valley for 18 years, according to a press release. Her firm is based in Dayton at 7 Kildeer Lane, Suite A. The release states that all the firm’s annual net profits will be donated to Hometown Rescue Mission and Ministry, a local nonprofit organization that assists the homeless, former incarcerated felons and those with addictions. Knicely is a licensed pastor in the Church of the Brethren. — Vic Bradshaw

— Vic Bradshaw

Kyger Joins Ameriprise Financial HARRISONBURG — Joshua Kyger has joined the Harrisonburg office of

classifieds get results call

574-6210

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, February 23, 2016

United Bank Has 129 Retail Locations

Merit System Can Be Successful

Scene

Job

FROM PAGE 2

before income taxes of over $200 million.” He further said the company’s per-share dividend of $1.29 for the year represented an increase for the 42nd consecutive year, and its 1.12 percent return on average assets topped the 0.94 percent average for peer banks with total assets of more than $10 billion. Based in Washington, D.C., and Charleston, W.Va., United Bank operates 129 retail locations in Virginia, West Virginia, Washington, Maryland, Ohio and Pennsylvania. Locally, it has branches in Harrisonburg, Bridgewater, Broadway, Elkton, Weyers Cave, Woodstock and Strasburg. — Vic Bradshaw

U.S. Agriculture Department Expands Microloan Program HARRISONBURG — The U.S. Department of Agriculture has expanded its microloan program to begin assisting producers looking to buy or improve their farmland. The change allows microloan money to be used to buy land or buildings or implement soil and water conservation improvements. The department’s Farm Service Agency also has simplified the application process. Up to $50,000 came be provided to qualified producers through the program and can be issued directly from the FSA. The USDA expects the loans to be especially helpful to beginning or underserved farmers, military veterans seeking a farming career, and small- to midsized operations. In three years, the microloans program has provided more than 16,800 low-interest loans totaling more than $373 million to producers across America. The financing has been used for operating costs and living expenses. Visit fsa.usda.gov/microloans or contact your local FSA office to learn more about the microloan program. — Vic Bradshaw

Shentel Cable Customers To Get Credit For AMC Loss HARRISONBURG — Shentel cablevision subscribers won’t be getting their zombie fix

on Valentine’s Day, but they will receive refunds for the loss of AMC Networks programming starting with February’s bill. Shenandoah Telecommunications Co. (NASDAQ: SHEN) has stuck by its decision to abandon all AMC programming rather than agree to a significant rate increase and the addition some of the AMC’s less-desirable networks to its most popular tier, according to Chris Kyle, the vice president in charge of programming contract negotiations. The decision means its cable customers in the Preston Lake subdivision in Rockingham County were unable to get the midseason premier of “The Walking Dead” on Feb. 15 or the season premier of “Better Call Saul” Feb. 16. Customers that buy the company’s Advanced Package would receive a 77-cent monthly credit backdated to Jan. 1 for the loss of AMC, Kyle said. Ultimate Package customers, who also lost WE and IFC, would get a $1.22 monthly credit. Kyle said an official with the Kansasbased National Cable Television Cooperative, which negotiates contracts on behalf of rural cable providers such as Shentel, told him that 81 regional cable companies opted to drop AMC programming rather than meet its contract demands.

FROM PAGE 5

standards, performance factors under the control of employees, adequate funding of the program, and timely rewards. When these elements are present, a merit system will be successful.

Succeed In New Situations Advancing in one’s career invariably involves taking new jobs, joining new organizations, and meeting new people. However, a surprisingly large number of professionals have trouble in these situations because they haven’t mastered three essential “getting-to-know- you skills: introducing themselves, remembering names and asking questions. The December issue of Harvard Business Review offers valuable suggestions about how to more effectively navigate such situations. It’s important to take the initiative when it comes to meeting people, and that starts with introducing yourself. Practice your opening line, and then pay attention to whether it seems to stimulate other people, or “puts them to sleep.” Follow up

— Vic Bradshaw

F&M Bank Named Best 50 Among Top Performers List HARRISONBURG — F&M Bank Corp., the parent company for Farmers & Merchants Bank, has been named to the OCTQX Best 50 as one of the top-performing companies traded on the OTCQX Best Market index, according to a news release. Timberville-based F&M (OTCQX: FMBM) switched to the OTC Markets Group’s QX board from its QB board on May 6. OTCQX is the company’s top-tier marketplace. The Best 50 uses one-year total return and average daily dollar volume growth from the previous calendar year to determine its top performers. Companies were ranked based on their performance in 2015. F&M, which posted record earnings in 2015, ranked 22nd among OTCQX companies. The list was comprised of 28 American companies and 22 international businesses. See SCENE, Page 11 by making the other person feel heard,

valued, and respected. Next, make sure that you remember the names of the people that you meet. This process requires you to pay attention when the other person tells you her name, to repeat the name after you’ve heard it, and sometimes, to ask the person’s name when the conversation is concluding. Finally, ask good questions, which can be a rich source of information. Given that, it’s essential that you determine what information you want, and why you want it. Next, know whom you should ask, and ensure that the time to ask is right. Then ask short, to-the-point questions that are easily understood and hence easy to answer. Real progress will come from mindful reflection and practice. But be patient and remain committed, and sooner than you might expect, you’ll find that you’re a successful newcomer at any event, office, or organization. Philip B. DuBose is a management professor at the James Madison University College of Business.

Tuesday, February 23, 2016

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Real Estate Market Back ‘At A Healthy Level’ Best Since Mid-2000s Housing Bubble Burst By VIC BRADSHAW Daily News-Record

HARRISONBURG — The first three decades of his career, Mike Pugh said, the residential real estate industry was fairly predictable. It would rise and fall at times, but drastic fluctuations were rare. As the housing bubble burst in the mid-2000s, sales volume and housing prices tumbled. Construction ground to a halt. Foreclosures became commonplace. “I would say [the last 10 years have] probably have been the most challenging point in my career,” said Pugh, owner of Old Dominion Realty,

“and that spans 42 years. “We saw a considerable amount of developers and builders not make it through the downturn, and that was disheartening to a lot of folks in our profession. And we saw a lot of people lose their homes, in some cases through no fault of their own.” Data shows that the market was hottest in the mid-2000s, reaching levels Kline May Realty principal broker Karl Waizecker called “unrealistically high,” then went into a multiyear fall. The last few years, though, sales have returned to about the midway point between the decade’s highs and lows. Scott Rogers, associate broker with Funkhouser Real Estate Group, said he thinks the housing market of the last 10

years was too hot at its peak because of “unfounded consumer confidence” and too cold in its valley because people were scared to buy. Now, the market has returned to a point where it’s just right. “I think we’re back at a healthy level,” Rogers said. “There’s a greater level, but not an inflated level, of consumer confidence.”

Confidence Regained The top year for total housing sales over the last decade was 2006, according to multiple listing service data compiled by Rogers and published on his harrisonburghousingtoday.com blog. That year, 1,438 homes were sold.

At Pioneer Bank We want to be a part of your future! Let us work together and make the home of your DREAMS come true. Contact us at 540-778-2294 or visit us on the web at www.pioneerbks.com

See MARKET, Page 9

Daniel Lin / DN-R

Funkhouser Real Estate Group associate broker Scott Rogers (left) shows a house on Park Road in Harrisonburg to Mike Souder (right) of Mount Sidney and Doug Detrick of Harrisonburg.

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, February 23, 2016

Prices Peaked In 2007, With Average Sales Price Hitting $224,394 That Year Market

FROM PAGE 8

Four years later, sales volume had fallen by nearly half to 758. Prices peaked in 2007, with the average sales price hitting $224,394 and the median sales price topping out at $195,100. Then they went into a five-year fall, with the average price settling at $191,818 and the median dropping to $172,375 in 2012. Last year, 1,122 homes were sold at an average price of $208,350. The median sales price was $185,000. “Consumer confidence was shaken,” Kemper Funkhouser, chief operating officer of Funkhouser Real Estate Group, said of the downturn, “and it’s been a long path back to consumers and brokers being more confident in

the market.” The recovery hasn’t been as pronounced as the fall, but it’s been steady. The local data is in line with what’s occurred statewide, according to Jenny Wortham of the Virginia Association of Realtors. Local and state annualized sales data show increases, signaling a recovery over the past few years. “I think we’re coming back at a great pace,” Waizecker said. “We’re coming back at a pace that is healthy and sustainable, and that’s the great thing about it.”

Fallout, Silver Linings As buyers retreated in the downturn’s worst years, many local agents left the business. Membership in the Harrisonburg-Rockingham Association of Realtors dropped to about

300 from a high of about 400, and sellers make sense of [the Waizecker said. sales environment] and Pugh said that for the first whether the market is right for time in his cathem at that reer, he had to particular The most difficult learn how to time.” part has been handle a short The fall was sale — one in tough, but helping buyers and which the owner agents said sellers make sense doesn’t get good came from of [the sales enough money the downturn. environment] and from the sale to Many Realcover debt on whether the market tors went out of the property. their way to is right for them. Rogers, who help people became a litheir Scott Rogers, save censed agent in Funkhouser Real Estate homes, Pugh 2003, said he Group associate broker said, and he views his role as felt good about being an adviser how industry to his clients. That wasn’t easy members reacted in crisis. when the market wasn’t stable, Agents advised former clients and he called the last decade to turn to local lenders for “tumultuous.” help, and many homeowners “The most difficult part,” he had their payments reduced said, “has been helping buyers via lower interest rates, inter-

“

est-only payments for a short term, or longer repayment terms. Waizecker said banking regulations have been tightened in the hopes of preventing people from obtaining mortgages they can’t afford. More verification is required for a loan now, he said, but not too much. The market’s instability proved educational for Funkhouser. He said it underscored the importance of knowing and obeying the fundamentals of the economy and the brokerage industry. “In the boom, those fundamentals were not as important — everybody ignored them, including the lenders,” he said. “The recovery period quickly reminded us why those fundamentals are important.” See MARKET, Page 11

Tuesday, February 23, 2016

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

CEO: First Bank’s Year ‘Transformational’ First National Corp. Bought Six Branches During 2015 By VIC BRADSHAW Daily News-Record

HARRISONBURG — Scott Harvard didn’t take long when asked to sum up what 2015 was like for First National Corp. “Transformational,” the company’s president and CEO quickly offered. “We really expanded our footprint significantly. We strengthened our company in terms of depth of people, core relationships and deposits.” The Strasburg-based parent company of First Bank, First National (OTC: FXNC) reported its fourth quarter and annual results Tuesday. Its 2015 performance was shaped by the April purchase of six Bank of America branches in the Shenandoah Valley and Central Virginia, including offices

in Elkton and Woodstock, and the November redemption of all $14.6 million in outstanding preferred stock. The company earned $1.5 million, or 31 cents per share, in 2015 compared to $6.5 million, or $1.32 per share, the previous year. This year’s performance was affected negatively by the Bank of America transition and stock buyback costs, while 2014’s results were aided by $3.9 million recovery of loan losses. As of Dec. 31, First Bank had retained 95 percent of the deposits held in banks it purchased from Bank of America. “It’s hard to compare year over year,” said Harvard. “What we’re really pleased about is paying off the preferred stock. That’s a milestone for us. “That was very expensive capital. We should save our stockholders about a million dollars a year because of the cost of that capital.” Quarterly Improvement Because of the disparities between

2014 and 2015, Harvard said he’s benchmarking the company’s performance on the quarterly results since the six branches were added. In the fourth quarter, First National earned $813,000, or 17 cents a share, compared to $398,000, or 8 cents a share, in the previous quarter. Net income was $116,000, or 2 cents a share, in the second quarter. The steady earnings increase is a good sign, said Harvard. “I’m pleased with that trend,” he said, “in terms of how we’ve integrated those branches and deployed those funds into loans.” First National’s improving net interest margin (3.53 percent in the fourth quarter versus 3.4 percent in the third) also is a positive sign, as is its net loan growth. Loans increased by a record $32.6 million in the fourth quarter and $61.8 million for the year. “That’s one of the keys to the success of our (Bank of America) deposit acquisi-

tion,” Harvard said. “It doesn’t do us any good to acquire deposits unless we can turn around and lend them out.” The bank’s loan portfolio also is performing well. For the second straight quarter, the company did not record a provision for loan losses. Nonperforming assets dropped by $1.2 million to 0.94 percent of total assets in the fourth quarter, compared to 1.12 percent of total assets at the end of the third quarter and 1.91 percent of total assets at the end of 2014. The bank is on track or ahead of its postacquisition projections, Harvard said, and has a formula for improved profits. “The opportunity for us,” he said, “is deploying the deposits we acquired into good loans in our communities and managing expenses.” Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Bluestone Wines Va. Gold Medals Scene

FROM PAGE 7

F&M operates 11 branches in Rockingham, Shenandoah, Page and Augusta counties and the cities of Harrisonburg and Staunton. It also operates two loanproduction offices in the region and VBS Mortgage, based in Harrisonburg. — Vic Bradshaw

First National Bumps Quarterly Dividend Up To 3 Cents HARRISONBURG — The board of directors of Strasburg-based First National Corp. (OTC: FXNC) recently declared a quarterly cash dividend of 3 cents per share. The dividend is payable on March 18 to shareholders of record as of March 4. The amount represents a 20 percent increase over the 2.5-cent dividend paid Dec. 18. First National is the parent company of First Bank Wealth Management, First Bank Financial Services Inc. and First Bank, which operates 15 branches in central Virginia and the Shenandoah Valley. First Bank has retail banking offices in Elkton, Mount Jackson, Strasburg and Woodstock.

Market

HARRISONBURG — A Rockingham County event venue is one of seven Virginia businesses to receive a U.S. Department of Agriculture grant to install a renewable energy system or make energy-efficiency improvements. The Stables at Six Penny Farm in McGaheysville was selected to receive a $19,223 Rural Energy for America Program grant to install a 45.6-kilowatt solar voltaic system, according to a press release from the USDA’s Virginia Rural Development office. The system is expected to cover all its electricity usage. The grant covers part of the project cost; recipients are responsible for at least 75 percent of the cost.

Continued Upswing

FROM PAGE 9

A more educated consumer has emerged from the housing meltdown. Rogers, Funkhouser and Waizecker noted that access to information has increased vastly over the decade, primarily because of the Internet. Now, most homeowners do their homework before approaching an agent for help. “Ten to 15 years ago, homebuyers had so little information going into making their decision,” Rogers said. “Now, from the research they do on their own and their Realtor’s information, people are making really good, well-thought-out decisions, and that will be good for our housing market in the long term.” Rogers forecasts a “slow, steady march upward” for the market and said it might be another 10 years before it hits record-setting levels again. Waizecker agreed that a prolonged recovery is likely. “If we can go roughly another 5 percent in price and the number of units sold this year, that will be another good step in that direction,” the Kline May broker said. “The news is good. I’m seeing all good signs of a reasonable recovery. Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

— Vic Bradshaw

classifieds get results

2015 Most Profitable Year Ever For Summit Financial Group. HARRISONBURG — Summit Financial

HARRISONBURG — Two Bluestone Vineyards earned gold medals in the 2016 Governor’s Cup competition. According to vawineinmypocket.com, the Bridgewater-area winery’s 2014 Chardonnay and 2013 Blue Ice were among the 38 wines awarded gold medals in the annual Virginia Wineries Association competition. Ninety-five state wineries entered 432 reds and whites into the competition. The highest scoring red and white wines will be included in the Governor’s Cup Case, to be announced Monday by Gov. Terry McAuliffe at the Virginia Governor’s Cup Gala. Eight other state wineries earned multiple gold medals in the competition, which was held over four weeks in January and February. — Vic Bradshaw

— Vic Bradshaw

Bluestone Wines Earn Gold Medals In State Competition

Setting New Records May Take 10 Years

County Venue One Of 7 In Va. To Get Grant For Solar Project

Group (NASDAQ: SMMF) posted its most profitable year ever in 2015, netting $16.1 million, or $1.50 per diluted share. The Moorefield, W.Va.-based parent company of Summit Community Bank Inc. and an insurance services company, Summit reported Jan. 25 that its fourth-quarter net income was $5.15 million, or 39 cents per diluted share. That easily topped the $3.01 million, or 32 cents per diluted share, it earned in the fourth quarter of 2014. Net interest income grew by $782,000 in the quarter and another $314,000 was taken in on the sale of foreclosed properties, the company reported. However, the bottom line was negatively affected by a $250,000 provision for loan losses versus none in the fourth quarter of 2014 and a $336,000 increase in write-downs of foreclosed properties. For all 2014, Summit’s net income applicable to common shares was $10.59 million, or $1.17 per diluted share. The 2015 full-year results represented increases of 52.1 percent in net income and 28.2 percent in earnings per diluted share. The company reported its loan portfolio grew $59.8 million, or 5.8 percent, during 2015. Summit has locations in Virginia, including branches in Harrisonburg.

— Vic Bradshaw

Tuesday, February 23, 2016

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Tuesday, February 23, 2016

Harrisonburg, Va.

Connect Four, A 3-Year-Old And Negotiation Strategy

ommercial real estate outcomes hinge on negotiation and strategy. Over the years, I’ve had the opportunity to work as part of hundreds of transactions. While I don’t have quantitative data to illustrate the point, experience would suggest most negotiations within commercial real estate primarily revolve around one aspect of the agreement. I don’t even have to write what it is, you already know. I recently lost a game of strategy to a 3-year-old. The backstory goes like this: A few weeks ago my oldest son was introduced to Connect Four. You remember the game: two players take turns dropping checkers into a vertically suspended plastic grid in an effort to get four connections in a row — hence the name. Now, Todd is pretty good at identifying horizontal or vertical connections, but hasn’t quite mastered seeing the diagonal opportunity. So I won, every time… until I didn’t.

Real Estate Tim Reamer When I lost, my strategy hadn’t changed and my strategy wasn’t the problem. The problem was being focused on a singular way to win. So while I was doggedly working toward getting the fourth checker in my diagonal connection, my son said “Good game, Daddy” with a smile on his face because he had already dropped his fourth red checker and won the game. If your negotiation strategy is focused singularly on the lease rate or purchase price, chances are you are losing too; it just costs you substantially more. Undoubtedly, price is important. Often though, it’s treated as if it’s the only

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item of importance. It’s not: The value of a deal can be altered through delivery condition, commencement or settlement dates, improvement allowances, options, and internal financing structures, among hundreds of other more nuanced techniques. It’s OK if none of these terms make any sense. Unless you’re deeply involved in commercial real estate, they probably shouldn’t. The point is there are a lot of different levers that can be pulled to create the right deal, but most of the time the price lever is the only one that is worn out. And that’s a problem because a negotiation strategy that is singularly focused on price almost certainly presupposes the deal is exclusively about your wants and needs, which is a costly mistake. It leads to the “High Low Game,” which is without question the most common approach to negotiation. It goes like this: The seller starts high, the purchaser responds with a lowball offer and price-based offers are traded back and forth until both parties reach an agreement on a price with which neither are particularly happy. Besides being mind-blowingly frustrating, horribly inefficient, terminating deals that could have otherwise been

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made, leaving tremendous value untapped and, often, damaging relationships, it’s a great strategy. Connect Four is a zero-sum “It goes like this: The game based on perfect informa- seller starts high, the purchaser responds tion: There can with a lowball offer be only one winand price-based ofner and you always know where fers are traded back your opponent and forth until both parties reach an stands. That’s not true in com- agreement on a price with which neither mercial real esare particularly tate or much of life for that mathappy.’’ ter. The very act of — TIM REAMER negotiating in good faith provides the opportunity to learn about what the other needs in an effort to gain something you value more than they do and vice versa. Simply, it allows for both parties to maximize value (it’s called log rolling). If you’re not engaging in this type of negotiation, trust me, others are and they’re happy to concede slightly on the one thing you desire in exchange for everything else they want. And you thought losing to a 3-year-old was embarrassing. Tim Reamer provides commercial real estate brokerage and consulting ser vices with Cottonwood Commercial and specializes in retail representation, investment proper ty (multifamily | commercial | NNN), and development projects. Learn more at www.timreamer.com.

Hometo

Don’t miss our series about communities in the Valley from January-April. Have a story idea? Email City Editor Jerry Blair at jblair@dnronline.com, or call 574-6281.

Harrisonburg, Va.

SHENANDOAH VALLEY BUSINESS JOURNAL

Tuesday, February 23, 2016

Blue Ridge Bankshares Keeps Setting Records For Seventh Year In Row, Bank’s Net Income Rises By VIC BRADSHAW Daily News-Record

HARRISONBURG — Blue Ridge Bankshares continues to set records. The parent company of Blue Ridge Bank reported in late January that its net income for 2015 was $2.5 million, or $1.79 per common share. That topped the $2 million, or $2.11 per common share, it netted in setting an earnings record in 2014 and marked its seventh consecutive year of record earnings. Brian Plum, the Luray-based company’s president and CEO, said the record results came even as Blue Ridge Bankshares (OTC Pink: BRBS) took at times costly steps to improve its long-term position. They included a common stock raise, the private placement of $10 million in

subordinated notes and the redemption sion launched about 20 months ago conof 4,500 outstanding shares of pre- tinues to grow, Plum said, with the ferred stock issued under the Treasury portfolio nearing $9 million. It also is growing in other retail loans, Department’s Small Business especially in Harrisonburg Lending Fund. and Charlottesville, “With all that going on, thanks in part to to be at $2.5 million in net [T]o be at $2.5 greater flexibility to income, we feel great million in net income, work with borrowers about that,” Plum said. we feel great about than some lenders. “Those were huge Blue Ridge things that laid the that. Those were huge hiked its provision groundwork for the things that laid the for loan losses to coming years. groundwork for the $320,000 in 2015 “Overall, we continfrom $70,000, a ue to see the company coming years. move he said was to moving forward and — Brian Plum, CEO keep pace with its progressing.” Blue Ridge Bankshares loan increases. Loans Drive Growth “We try to be pretty Much of Blue Ridge Bankconservative, make sure we shares’ income growth was fueled have enough in there,” Plum by a $20.2 million increase in its loans said. “Based on our net charge-offs last held for investment. That represented a year and the last several years, you 10.9 percent jump over 2014. could argue that we’re overaccrued in The company’s dealer finance divi- the allowance. We’d rather have more

“

in there than not enough.” The company’s deposits also rose considerably, to $196.5 million from $183.9 million. Some of the difference is money not yet deployed from the subordinated debt issuance, he said, but the bank also is seeing organic deposit growth in all its markets. The company’s annual results were bolstered by a strong fourth-quarter performance. Net income for the quarter that ended Dec. 31 was $618,000, well above the $470,000 recorded in the final quarter of 2014. Blue Ridge Bankshares’ board of directors declared an 11.5-cent dividend for the fourth quarter, up from 11 cents the previous year. Blue Ridge operates retail banking offices in Harrisonburg, McGaheysville, Shenandoah, Luray and Charlottesville. Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

Tuesday, February 23, 2016

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

No-Till Takes Toll On Sod Drill, But Worth The Effort By VIC BRADSHAW Daily News-Record

HARRISONBURG — Because he plants his fields without tilling them and spreads bed pack from his barns on some areas, D.J. Myers said he spends more time and money maintaining his sod drill. But the benefits of no-till farming outweigh the downside for his Walkup Holsteins operation near Dayton, he told about 250 people Feb. 17 at the Virginia No-Till Alliance Conference. “This drill, when the fall is done, it’s ready for a complete overhaul,” Myers said as he showed a photo of his clogged equipment in the Exhibit Hall at the Rockingham County Fairgrounds. “But I can save more money by rebuilding [the drill] more often than I can by other methods, such as vertical tillage.” Myers manages the farm’s 100 head of beef cattle and crop production — hay, corn, soybean and wheat. Walkup

also has 120 dairy cows. The cattle’s bed pack is put on the fields to help build the soil, he said. Combined with corn fodder, though, it makes planting more difficult, so he adds weights to his sod drill to help it deposit seeds at the proper depth. “No-till drills are a little bit finicky,” he said, “and sometimes you think you’re planting deeper than you are. You need to get through the heavy residue.” Myers wants the corn stalk remnants vertical, not knocked down, because it’s easier on equipment. He also suggested planting in fields with the most residue first, when the equipment should operate best, and he uses 25 to 30 pounds of nitrogen to help break down the residue. So he’ll know how much of the bulk seed he’s spreading, he said he puts scales on his drill. As important as how the seeds get in the ground is what’s on the seed.

Paul Bodenstine, the Ashland agronomist who launched the private research and development company ag.systems 19 years ago, said seed treatments are important to fight disease and insect damage and outlined research on treatments for wheat, soybeans and corn. Zinc was among the substances he suggested as a treatment. In field research, he found zinc applied at a 1:9 ratio to phosphorous increased wheat yields 14 percent to 17 percent. Corn planted with zinc and a plant growth regulator led to an increase of 16 bushels an acre. The zinc, Bodenstine said, stimulates organisms in the soil. “Giving zinc to those soil microbes,” he said, “is like giving cotton candy to a 7-year-old. They love it.” Bobby Clark, an agent with the Virginia Cooperative Extension’s office in

Woodstock, relayed information about aerial seeding and fungicide applications in the Shenandoah Valley. The Shillingburg family farm outside Woodstock has become a proponent of aerial fungicide applications for soybeans, he said. Seeding efforts were good three of the four years they were tried, but streaky once. For some reason he can’t explain, Clark said farmers seem to have much better luck with aerial seeding from mid-Rockingham County north compared to areas south of that point. He said the two biggest problems with aerial applications are the cost — more than $50 an acre — and the availability of a helicopter. “I’d like to see someone enter the [aerial application] business in the Valley,” said Clark. Contact Vic Bradshaw at 574-6279 or vbradshaw@dnronline.com

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SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.

Tuesday, February 23, 2016

Local Ledger Dec. 2015 Harrisonburg 4.6% Rockingham County 3.4% Page County 7.7% Shenandoah County 3.7% Augusta County 3.7% Staunton 4.1% Waynesboro 4.3%

Nov. 2015 4.4% 3.6% 6.2% 3.8% 3.8% 4.0% 4.5%

Dec. 2014 5.0% 4.0% 8.6% 4.4% 4.3% 4.6% 4.8%

Labor Force Harrisonburg Rockingham County Page County Shenandoah County Augusta County Staunton Waynesboro

Retail Sales (in millions)

Home Sales

Unemployment

Dec. 2015 23,939 40,038 11,443 20,696 35,729 11,685 9,822

Nov. 2015 23,840 39,954 11,381 20,670 35,623 11,643 9,819

Dec. 2014 23,966 40,270 11,597 20,655 36,267 11,829 9,944

Median Price Harrisonburg Rockingham County Page County Shenandoah County

Jan. 2015 $168,000 $214,000 $142,400 $160,000

Jan. 2014 $194,500 $206,000 $58,200 $153,500

Pct. Change — 13.62 3.88 144.67 4.23

Days On Market Harrisonburg Rockingham County Page County Shenandoah County

Jan. 2015 88 76 238 147

Jan. 2014 172 71 145 142

Pct. Change — 48.84 7.04 64.14 3.52

Units Sold Harrisonburg Rockingham County Page County Shenandoah County

Jan. 2015 27 40 10 29

Jan. 2014 18 31 6 24

Pct. Change 50.00 29.03 66.67 20.83

Sources: Funkhouser Real Estate Group; RealEstate Businesss Intelligence

Source: Virginia Employment Commission

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December 2015 $122.69M $73.78M $15.51M $38.99M $49.38M $40.52M $55.68M

Source: University of Virginia’s Weldon Cooper Center

Tuesday, February 23, 2016

SHENANDOAH VALLEY BUSINESS JOURNAL

Harrisonburg, Va.