Financial Condition Summary
June 30, 2020 as Compared to December 31, 2019
Total assets were $827,098,000 on June 30, 2020 compared with $725,394,000 at December 31, 2019, an increase of 14.02%. The increase
in total assets was funded from the growth in deposits.
Total deposits increased from $649,459,000 as of December 31, 2019 to
$745,986,000 on June 30, 2020, an increase of 14.86%. The increase resulted in large part from increases in the following deposit categories: non-interest-bearing demand deposits, NOW, money market, and
savings accounts. The increase was attributable in part to PPP loan funds that had yet to be deployed.
Total loans, excluding loans held
for sale, increased to $629,757,000 on June 30, 2020 from $578,103,000 on December 31, 2019, resulting from the origination of PPP loans. Loans, excluding loans held for sale and net of deferred fees and costs and the allowance for loan
losses, increased to $623,564,000 on June 30, 2020 from $573,274,000 on December 31, 2019, an increase of 8.77%. The following summarizes the position of the Banks loan portfolio as of the dates indicated by dollar amount and
percentages (dollar amounts in thousands):
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June 30, 2020
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December 31, 2019
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Amount
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Percentage
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Amount
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Percentage
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Commercial
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$
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175,646
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27.89
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%
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$
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114,257
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19.76
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%
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Commercial Real Estate
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301,700
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47.91
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%
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303,900
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52.57
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%
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Consumer
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87,155
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13.84
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%
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89,945
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15.56
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%
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Residential
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65,256
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10.36
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%
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70,001
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12.11
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%
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Total loans
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$
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629,757
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100.00
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%
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$
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578,103
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100.00
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%
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Total nonperforming assets, which consist of non-accrual loans, loans
past due 90 days or more and still accruing, and OREO increased to $6,801,000 on June 30, 2020 from $3,640,000 on December 31, 2019. OREO decreased to $1,616,000 on June 30, 2020 from $2,339,000 on December 31, 2019. The decrease
in OREO was due in large part to the sale of one large OREO property during the first quarter. Non-performing loans increased from $1,301,000 at December 31, 2019 to $5,185,000 at June 30, 2020. The
increase primarily reflected one relationship of approximately $3.3 million. Management anticipates a significant curtailment of the loan balance upon the sale of the collateral. The Bank has entered into a contract for the sale of the
collateral, and the sale is scheduled to close later in the third quarter.
As discussed in more detail below under Results of
OperationsAllowance and Provision for Loan Losses, management has provided for the anticipated losses on these loans in the allowance for loan losses. Loan payments received on non-accrual loans
are first applied to principal. When a loan is placed on non-accrual status there are several negative implications. First, all interest accrued but unpaid at the time of the classification is reversed and
deducted from the interest income totals for the Bank. Second, accruals of interest are discontinued until it becomes certain that both principal and interest can be repaid. Third, there may be actual losses that necessitate additional provisions
for loan losses charged against earnings.
As a result of the COVID-19 pandemic, we anticipate
that our commercial, commercial real estate, residential and consumer borrowers will continue to encounter economic difficulties, which could lead to increases in our levels of nonperforming assets, impaired loans and troubled debt restructurings.
Any potential financial impacts are unknown at this time.
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