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New words:
brought, delivery, Delta, entity, fourth, GSE, inclusive, indoor, maximize, mid, nominal, notice, pool, regular, spec, strongly, TBA, uptick, Variant
Removed:
adhering, began, branch, capacity, depositor, disinfection, effort, essential, incorporate, reaching, removed, serving
Financial report summary
?Management Discussion
- Net income remained relatively stable at $1.7 million for both the three months ended June 30, 2021 and 2020. Basic and diluted income per share were $0.13 for the three months ended June 30, 2021, compared to $0.14 for the three months ended June 30, 2020.
- Net income increased by $3.3 million, or 144.6% to $5.6 million for the six months ended June 30, 2021 compared to $2.3 million for the six months ended June 30, 2020. Basic and diluted income per share were $0.44 for the six months ended June 30, 2021, compared to $0.18 for the six months ended June 30, 2020. The increase in net income reflected increased net interest income, a decrease in provision for loan losses, and increased noninterest income, partially offset by increased noninterest expenses.
- Net interest income was significantly impacted by a declining interest rate environment directly related to the COVID-19 pandemic. The abrupt decline in interest rates beginning in 2020 not only reduced interest income on our liquid assets, but it also reduced our interest expense on both deposits and borrowings. Because of the need to maintain higher levels of liquidity and delays in business investment activity due to COVID-19 disruptions, some further compression of our net interest margin is possible in future periods, but a reasonably robust recovery in business conditions should enable us to deploy our additional asset generation resources and thus reallocate some of our excess liquidity. Additionally, at June 30, 2021, we held $36.9 million in low-yielding PPP loans, which reduced our net interest margin. We could experience compression of our average yields, net interest spread, and net interest margin in future periods by the effect of the forgiveness aspect of the PPP loans as the recognition of the net origination fees will be accelerated once payments are received.