2020 Annual Report

2020 Annual Report

Dear Stockholders:

Apollo Bancorp, Inc. produced another year of strong earnings despite numerous challenges associated with the COVID-19 pandemic.  Net income totaled $1,740,000 in 2020 compared with the record $2,083,000 net income reported in 2019.  The decrease is primarily a result of earnings volatility in equity securities during the early-pandemic economic shutdown.

In 2020, interest rates decreased considerably due to a recessionary economy most notable during the second and third quarters.  However, the Company’s primary driver of profitability, net interest income, increased by $362,000, or 5.8%, due to a $424,000 decrease in interest expense that was offset by a minimal reduction of $62,000 in total interest and dividend income.  Noninterest income from service charges decreased $162,000 due to less consumer activity while fiduciary activities decreased $52,000 in 2020 mostly due to lower nonrecurring estate fees.  Noninterest expenses continue to be well controlled and remained flat for the third consecutive year.

Robust loan portfolio growth occurred as real estate demand accelerated and market prices firmed in the lower interest rate environment.  Total loans outstanding increased $12.7 million, or 10.7%, compared with growth of $5.4 million during 2019.  During the year, asset yields were impacted by falling interest rates.  Nevertheless, the net interest margin remained quite strong, and exposure to rising interest rates remains low in anticipation of inflationary economic indicators and eventual monetary policy tightening.

During 2020, retail deposit balances grew an historic $17.7 million, or 14.7%, following several periods of low growth.  Significant growth occurred due to less consumer spending and an increase in business deposits as well as federal stimulus payments.  As the year concluded, deposit accounts were redesigned to reflect increasing preferences for electronic banking services.  This pivot also allows customers who visit branch offices to spend more advisory time with their relationship banker and customer service specialists.

The Company maintains a strong level of asset quality with few watchlist credits and a low delinquency rate in its loan portfolio.  A vast majority of credit exposure is secured by investment and owner occupied real estate.  Extensive management reporting systems are in place for credit risk and regulatory compliance using strict internal controls, frequent independent testing and ongoing vigilance from the Board of Directors.

Earnings per share totaled $3.35 in 2020 compared with $4.02 in 2019. The quarterly dividend was increased from $0.52 to $0.53 per share, or 1.9%, in the fourth quarter and represented the eleventh consecutive annual increase.  Total cash dividends per share increased from $2.05 in 2019 to $2.09 in 2020, which delivers a dividend yield approximating 5.0%. In addition, stockholders’ equity grew 5.5%, while retained earnings increased $656,000 to support planned future growth.  The Company’s operating performance compares favorably with other Mid-Atlantic community banks, and its independent local ownership is thoughtfully rewarded.

I am most appreciative of the dedication and commitment of our employees this year who continued to staff seven locations, adapted to extensive workplace safeguards and inconvenient changes and simultaneously managed disruptions in their personal and families’ lives. I am quite proud of their collective “can-do” attitude which makes me extremely pleased and thankful for their devoted service.

Thank you for your ongoing support and loyalty as Apollo Trust Company enters its 150th year in business.


Nelson L. Person
President and CEO