Third Quarter Report September 30, 2020

Third Quarter Report September 30, 2020

Dear Shareholders:

Net income for the quarter ended September 30, 2020 totaled $502,000, or $0.97 per share.  This represents an increase compared with net income of $452,000, or $0.87 per share, reported for the third quarter of 2019.  Higher net income was due to a $136,000 increase in net interest income primarily from a $109,000 decrease in interest expense which was offset by a $71,000 decrease in noninterest income.

Year-to-date net income through September 30, 2020 totaled $1,257,000 compared with $1,517,000 reported for the first nine months of 2019.  The decrease is primarily due to a $556,000 valuation change in equity securities, which is a non-core earnings component, for the year-to-date periods and mostly during the pandemic onset.  A recessionary economy has also resulted in a $112,000 decrease in service charge income during the year-to-date period compared with 2019.  For the nine months ended September 30, 2020, earnings per share totaled $2.42, and the company reported an annualized return of 1.02% on average assets and 7.82% on average equity.

Notable growth in deposits of 6.1% occurred during the third quarter as consumers are maintaining higher balances with presumably less personal spending.   Real estate lending has been robust this year, and third quarter growth of 3.5% increased the loan portfolio to over $128 million.  Asset quality remains strong with low delinquency and few watchlist credits.

The Board of Directors and management remain diligent in preserving your investment in the Company during this time of widespread uncertainty.  A dividend payment of $0.52 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