Core Earnings Increase YOY, PPP Winds Down

09/06/22

Earnings were $936,000, or $0.52 per share, for the six months ended June 30, 2022 compared to $1,047,000, or $0.58 per share, for the comparative period in 2021. While total year-to-date earnings in 2022 trailed slightly behind those of 2021, earnings related to the Bank’s core operations have increased.

Current year earnings of $0.52 per share were comprised of $0.43 per share attributable to core operations and $0.09 per share due to impacts from the Paycheck Protection Program (“PPP”), whereas prior year earnings of $0.58 per share were comprised of $0.37 per share attributable to core operations and $0.21 per share due to impacts from the PPP.

This represents a 16% increase in core earnings year-over-year and can be primarily attributed to the Bank’s topline revenue growth coupled with continued control of interest expense through the first half of the year. With the winding down of the PPP program, management is pleased to see strong results from our core banking operations.

Our balance sheet remained stable from the first quarter to the second with total assets ending June 30, 2022 at $249.7 million. With the Federal Reserve increasing interest rates at a record pace during this time period, we experienced a slowing in our growth as business owners and individuals navigate the impacts of these rate movements. On a year-to-date basis, total assets are up 8%.

Despite a relatively flat Q2, total deposits at June 30, 2022 were $225.5 million representing an increase of $20.0 million or 10% through the first half of the year. Year-to-date deposit growth was generated through many avenues including deepening of existing customer relationships and new business earned through increased marketing efforts, our online presence and a strong referral network.

Loans saw improvement in the second quarter with a slowing of payoffs allowing for positive net portfolio loan growth of $3.8 million on a year-to-date basis. With $3.9 million of PPP loan forgiveness received during the year, total loans experienced a slight contraction of $103 thousand or 0.1% from December 31, 2021 ending the first half of the year at $135.3 million.

The Bank remains Well Capitalized with a 9.59% leverage capital ratio and maintains its Bauer five-star rating.