2022 Annual Report

2022 Annual Report

Dear Stockholders:

Apollo Bancorp, Inc. delivered strong earnings in 2022 despite the highest inflation in over 40 years.  Net income totaled $1,909,000 in 2022 compared with $1,901,000 reported in 2021.  Earnings per share totaled $3.68 in 2022 compared with $3.66 in 2021.  Despite consistent results between years, the components were very different with a $336,000 increase in interest income and a $135,000 increase in noninterest income, which were offset by an increase in noninterest expenses of $439,000.

The primary driver of profitability, net interest income, increased by a healthy 5.1% during 2022 mostly due to a $319,000 increase in loan interest income offset by a $128,000 decrease in interest earned on investment securities.  Lending growth accelerated despite interest rates and real estate prices increasing in 2022 while available properties remained in demand. Total loans outstanding increased a robust $14.3 million, or 10.2%, in 2022 compared with a very strong $9.6 million, or 7.3%, during 2021.  Interest income was positively impacted by higher interest rates in 2022 as the loan portfolio yield increased steadily.  However, interest expense was stable due to ample liquidity associated with previous deposit growth and deployment of cash flow from investment securities. Consequently, the net interest margin remained strong compared with peer averages, and it was supported by consistent lending growth and full use of stable core deposits.

Noninterest income increased $135,000, or 10.8%, primarily due to a $75,000 increase in fiduciary executorship fees and a $52,000 increase in service charges on deposit accounts.  However, noninterest expenses increased 7.9% following three consecutive years of stable overhead. High inflation and a tight labor market led to notable increases in personnel, technology and other expenses.  Investing in talented, motivated staff and regularly enhancing products and services are essential to remaining a high performer and competing with larger banks.

The loan portfolio is primarily secured by residential real estate, both investment properties and owner occupied homes.  Sound credit policies and underwriting with ongoing risk assessments, portfolio monitoring and regular audit testing have maintained strong asset quality with few watchlist credits and low delinquency.

After an extended period of significant growth, deposit balances eventually flattened in 2022 consistent with the overall banking industry trend.  This is attributed to historically high inflation and increased consumer spending practices amidst very low unemployment.  Electronic banking continued to remain popular due to convenience, advancements and demographic changes even while public comfort with personal interactions grew during the declining pandemic environment.

The quarterly dividend was increased from $0.54 to $0.55 per share, or 1.9%, in the fourth quarter and represented the thirteenth consecutive annual increase.  Cash dividends per share increased from $2.13 in 2021 to $2.17 in 2022, which delivered a dividend yield approximating 5.4%.  In addition, retained earnings increased $781,000 to support future growth.  Operating performance continued to compare favorably with peer community banking organizations, and dividends remain a high priority.

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


Nelson L. Person
President and CEO