The Corporations primary source of liquidity is customer deposits, which were $925,888 at
March 31, 2020, and $898,996 at December 31, 2019. Other sources of liquidity include investment securities, the Corporations line of credit with the Federal Home Loan Bank (FHLB) and federal funds lines with
correspondent banks. The Corporation had $482,077 invested in available-for-sale investment securities at March 31, 2020, and $464,383 at December 31, 2019.
This increase was due to purchases coupled with an increase in the market value of the Corporations investment securities portfolio in excess of paydowns, maturities, sales and calls.
The Corporation also had $61,909 in interest bearing deposits at other banks at March 31, 2020 and $58,557 at December 31, 2019. The Corporation had
secured and unsecured federal funds lines with correspondent banks in the amount of $45,000 at both March 31, 2020 and December 31, 2019. In addition, the Corporation has the ability to draw on its line of credit with the FHLB. At
March 31, 2020, the Corporation had unused and available $223,047 of its line of credit with the FHLB and at December 31, 2019, the Corporation had unused and available $177,592 of its line of credit with the FHLB. The increase in the
amount available under the Corporations line of credit with the FHLB from the end of 2019 to March 31, 2020, was the result of an increase in the amount of loans eligible for the collateral pool securing the Corporations line of
credit with the FHLB. The Corporation had federal funds purchased of $-0- as of March 31, 2020 and December 31, 2019. The Corporation may purchase federal
funds from correspondent banks on a temporary basis to meet short term funding needs.
When the Corporation has more funds than it needs for its reserve
requirements or short-term liquidity needs, the Corporation increases its investment portfolio, increases the balances in interest bearing due from bank accounts or sells federal funds. It is managements policy to maintain an adequate portion
of its portfolio of assets and liabilities on a short-term basis to insure rate flexibility and to meet loan funding and liquidity needs. When deposits decline or do not grow sufficiently to fund loan demand, management will seek funding either
through federal funds purchased or advances from the FHLB.
CAPITAL RESOURCES
Total shareholders equity was $118,744 at March 31, 2020, as compared to $112,800 at December 31, 2019. The increase in shareholders
equity was the result of a decrease in the accumulated other comprehensive loss brought about by the investment securities market value adjustment partially offset by dividends paid in excess of earnings. The market value adjustment, which was an
increase due to general market conditions, specifically the decrease in medium term interest rates, caused an increase in the market price of the Corporations investment portfolio.
The Corporation paid aggregate cash dividends in the amount of $1,339, or $0.24 per share, during the three-month period ended March 31, 2020 compared to
$1,177, or $0.24 per share, for the same period in 2019.
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