2021 Annual Report

2021 Annual Report

Dear Stockholders:

Apollo Bancorp, Inc. continued to deliver strong earnings in another challenging year.  Net income totaled $1,901,000 in 2021 compared with $1,740,000 reported in 2020.  Earnings per share totaled $3.66 in 2021 compared with $3.35 in 2020.  The change was primarily a result of a $321,000 increase in noninterest income offset by higher noninterest expenses and income taxes.

The primary driver of profitability, net interest income, decreased by $14,000, or 0.2%, due to a $110,000 reduction in total interest and dividend income, mostly from the securities portfolio, which was offset by a $96,000 decrease in interest expense.  Noninterest income from service charges increased $167,000 as deposit accounts were redesigned, and new business products were added to support recent and planned growth.  Noninterest expenses increased $116,000 and were stable for the third consecutive year.  However, high inflation has become more evident while the Company remains competitive with technology advancement as well as recruiting and retaining high performing employees.

Lending growth was sustained even as real estate prices continued firming throughout the year as available inventory decreased.  Total loans outstanding increased $9.6 million, or 7.3%, compared with growth of $12.7 million during 2020.  Asset yields were impacted by lower interest rates in recent years as the loan and securities portfolios have repriced lower.  Nevertheless, the net interest margin remained quite strong compared with industry averages, which was supported by consistent lending growth.

A majority of the loan portfolio is secured by residential real estate, both owner occupied and non-owner occupied investment properties.  Management reporting systems operated effectively for credit risk and regulatory compliance with ongoing risk assessment, diligent internal controls and frequent independent testing.  Asset quality remained strong with few watchlist credits and low delinquency.

Deposit balances grew an historic $18.5 million, or 13.4%, due to an increase in business deposits and less apparent consumer spending.  Depositors continued showing preference for electronic banking products due to ongoing pandemic considerations and demographic shifting.

The quarterly dividend was increased from $0.53 to $0.54 per share, or 1.9%, in the fourth quarter and represented the twelfth consecutive annual increase.  Cash dividends per share increased from $2.09 in 2020 to $2.13 in 2021, which delivered a dividend yield approximating 4.5%.  In addition, stockholders’ equity grew 3.2%, while retained earnings increased $794,000 to support future growth.  The Company’s operating performance continued to compare favorably with its peer group, and stockholders were attentively rewarded.

Bank employees demonstrated their sustained resilience and commitment to consistently staff seven locations and adapt to changing workplace pandemic protocols while managing various challenges in their daily lives. Congratulations are extended to Terry Richey Jones who recently retired after a long and dedicated career. Finally, I wish to recognize and thank Richard G. Hildebrand, President of Output Sales Corporation, who is retiring from the Board of Directors with 15 years of service. His perspectives on business and the community have been respected and appreciated.

The directors, officers and employees thank you for your support and steadfast loyalty.


Nelson L. Person
President and CEO