Third Quarter Report September 30, 2019

Third Quarter Report September 30, 2019

Dear Shareholders:

Net income for the quarter ended September 30, 2019 totaled $452,000, or $0.87 per share. This represents a decrease compared with net income of $522,000, or $1.01 per share, reported for the third quarter of 2018. Lower net income was primarily due to a  $131,000 decrease in the change in fair value of equity securities and a $49,000 decrease in other noninterest  income. However, an increase of $37,000 in net interest income was achieved compared with the third quarter of 2018.

Year-to-date net income through September 30, 2019 totaled $1,517,000 and represents a 28% increase compared with $1,185,000 reported for the first nine months of 2018. The significant increase was primarily due to a $201,000  increase in the change in fair value of equity securities and a  $122,000 increase in net interest income as well as a $141,000 decrease in noninterest expense. Earnings per share totaled $2.93 for the nine months ended September 30, 2019 compared with $2.29 for the same period in 2018. Year-to date 2019, the company has reported a 1.24% return on average assets and a 9.86% return on average equity .

Ongoing loan growth has increased the portfolio to over $116 million representing a healthy loan-to-deposit ratio of 95%. Credit quality remains strong with low delinquency, few watchlist credits and minimal charge-offs. The company maintains active risk management processes across a variety of areas and successfully meets regulatory compliance and expectations.

A dividend payment of $0.51 per share for the third quarter was paid October 1. Please do not hesitate to contact me if you would like additional information or have any questions.

Sincerely,

Nelson L. Person
President & CEO