Second Quarter Report June 30, 2020
Net income totaled $450,000, or $0.87 per share for the quarter ended June 30, 2020 compared with net income of $533,000, or $1.03 per share, reported for the second quarter of 2019. Earnings decreased primarily due to a $144,000 reduction in noninterest income, of which $75,000 was attributed to nonrecurring equity securities gains in 2019. Service charges on deposit accounts also decreased by $68,000, comparatively, and mostly for pandemic reasons. However, net interest income increased $65,000 during the second quarter of 2020 due to lower interest expense.
Net income through June 30, 2020 totaled $755,000 compared with $1,065,000 reported for the first six months of 2019. The decrease was primarily due to a $426,000 change in income from the equity securities portfolio caused by pandemic related market volatility. Net interest income increased by $153,000, and noninterest income decreased by $81,000, compared with the first six months of 2019. Interest income continues to move from investment securities into higher yielding loans. The annualized return on average assets was 0.93% through June 30, 2020.
There was a notable increase in lending during the second quarter of 2020 with $12 million in new loan originations, which increased the portfolio to over $124 million. Annualized loan growth year-to-date is a robust 9.4%. Asset quality remains strong with low delinquency and few watchlist credits. Also, a significant and unprecedented growth in deposits of $9 million, or 7.3%, occurred during the second quarter and increased balances to $134 million.
Lobby offices resumed full service operations on June 1st and are equipped to provide a safe atmosphere for customers and employees. The business environment presents a variety of unique challenges; however, our employees’ dedicated commitment facilitates the company’s ongoing success. A dividend of $0.52 per share for the second quarter was paid July 1st. Please do not hesitate to contact me if you have any questions.
Nelson L. Person
President & CEO