Exhibit 99.1
July 31, 2020
Earnings Report – June 30, 2020
Dear Shareholders:
Like all companies, we continue to adjust and move forward in dealing with the challenges presented by COVID-19. Provided below are our financial results for the first half of the year and an update in the context of our four primary stakeholder groups; shareholders, customers, employees, and communities.
Shareholders: Year-to-date net income was $4.8 million for the period ending June 30, 2020 compared to $6.1 million for the period ending June 30, 2019. Year-to-date diluted earnings per share was $0.81 and $1.11, for June 30, 2020 and 2019, respectively. Total assets were $1.25 billion as of June 30, 2020 compared to $1.08 billion as of June 30, 2019. The primary driver behind the decrease in earnings from year-to-year is a $1.7 million increase in provision for loan loss expense. Absent the increase in provision expense, we would have been approximately $500 thousand higher year-over-year lead by a strong refinance market for single family home loans. The increase in the provision expense is a result of our best effort to analyze the negative economic impact of COVID-19. While past due loans have not increased significantly at this time, there continues to be a tremendous amount of economic uncertainty which will persist for many months and will likely impact loan quality. We remain well capitalized but, like the rest of the banking industry, we do expect downward pressure on earnings for 2020 and potentially beyond, based on indeterminate asset quality and net interest margin compression.
Customers: We recognize COVID-19 has impacted consumer and commercial customers so we designed programs to support both groups. We are running a Skip-a-Pay promotion for our consumer loan customers allowing them to defer loan payments for three months through year-end. Since mid-March, we have worked with commercial and residential loan customers most impacted by this economic recession for principal and/or interest deferments ranging from three to twelve months. Since early April, we have worked with commercial customers to originate approximately $60 million in U.S. Small Business Administration Paycheck Protection Program loans.
Employees: We value the health of our employees and customers and have followed the state and local safety guidelines by increasing physical work space and limiting lobby access at times. In June we began a phased approach to expand our lobby access. As of July 6, all branch lobbies have returned to full access. Our employees have performed exceedingly well during this trying time and have continued to provide Premier Customer Service. We will continue to follow state and local safety guidelines as COVID cases have recently increased nationally and regionally.
Communities: The wellbeing of a community bank is closely tied to the wellbeing of the communities in which it serves. In mid-March we increased our corporate donations to non-profit groups serving those most in need within our communities. In addition, we opened our newest branch, Tates Creek Centre Lexington, on July 6. This new branch increases our presence in Lexington which is the largest market we serve and provides additional access for existing customers and potential customers.
The coming quarters will be challenging from a financial perspective, but as always, we will strive for the long-term best interest of our shareholders, customers, and employees. Thank you for your continued support.
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/s/Louis Prichard | |
Louis Prichard | |
President, CEO | |
