Second Quarter Report June 30, 2021

Second Quarter Report June 30, 2021

Dear Shareholders:

Net income totaled $498,000, or $0.96 per share, for the quarter ended June 30, 2021 compared with net income of $450,000, or $0.87 per share, reported for the second quarter of 2020.  The change in earnings was primarily due to a $60,000 increase in noninterest income and an $18,000 decrease in interest expense, which was offset by a $34,000 increase in income tax expense.  Net interest income increased $11,000 comparing the second quarter of 2021 with 2020.

Net income through June 30, 2021 totaled $953,000 compared with $755,000 reported for the first six months of 2020.  The increase was primarily in noninterest income due to the absence of pandemic related volatility in the equity markets that occurred during the first quarter of 2020. Year-to-date, net interest income increased by $27,000, and noninterest expense decreased by $24,000, compared with the first six months of 2020.  Interest income continues to shift from investment securities into higher yielding loans.  The annualized return on average assets was 1.10% through June 30, 2021.

Continued growth in deposits during the second quarter of 2021 increased balances to over $154 million.  Annualized growth of 5.2% this year has increased the loan portfolio to $138 million. Asset quality remains strong with low delinquency and few watchlist credits.

Sustained low interest rates and a recent spike in inflation associated with a post-pandemic business reopening has created challenges for businesses and excess liquidity for many banks.  Our employees’ dedicated commitment continues to facilitate the company’s ongoing success.  A dividend of $0.53 per share for the second quarter was paid July 1st.  Please do not hesitate to contact me if you have any questions.

Sincerely,

Nelson L. Person
President & CEO