Third Quarter Report September 30, 2022

Dear Shareholders:

Net income for the quarter ended September 30, 2022 totaled $539,000, or $1.05 per share. This represents an increase compared with net income of $490,000, or $0.94 per share, reported for the third quarter of 2021. The change in earnings was primarily due to a $117,000 increase in net interest income and a $22,000 increase in noninterest income, which was offset by a $72,000 increase in noninterest expense. Conservative underwriting and competitive pricing increased loan balances to over $150 million at third quarter end. Deposit balances also continued to grow during the quarter to over $165 million.

Net income year-to-date September 30, 2022 totaled $1,440,000 compared with $1,443,000 reported for the same period in 2021. With interest rates and loan growth both increasing throughout this year, net interest income increased by $147,000 comparing 2022 with 2021. Noninterest income increased $98,000 over the same comparative periods due to higher service charges on deposit accounts and fiduciary income. However, historic inflation increased noninterest expense by $236,000, or 5.8%, comparing the same two nine month periods.

Earnings per share totaled $2.78 and generated 1.03% return on average assets and 8.57% return on equity for the nine months ended September 30, 2022. A dividend of $0.54 per share for the third quarter was paid October 1^st. Please do not hesitate to contact me if you have any questions.

Sincerely,

Nelson L. Person
President & CEO