June 2021
Despite all the challenges caused by the COVID-19 pandemic, I am pleased to report that the Bank remains in strong financial condition. We are proud of the work we did to make stimulus funding available to our consumer and business customers. In general, our customers are doing well as evidenced by our record low loan delinquencies, and high deposit account balances.
The low interest rate environment has reduced our loan yields and Net Interest Margin, despite the low deposit rates. Our Net Interest Margin through June 2021 was only 2.83% compared to 3.04% in 2020. This led to flat Net Interest Income despite an increase in our earning assets.
A significant change year-over-year is in our Loan Loss Reserve. The Reserve is an accounting offset we use to cover anticipated loan losses. In the first half of 2020, we set aside $1,155,500 because we were concerned that the pandemic would create payment problems and losses for our customers. This did not happen, so in the first half of 2021, we took $298,675 out of the reserve and included it in income. This was a year-over-year swing of $1.45 million.
Non-Interest Income was up 36% due to increased debit card interchange income and gains on sale of mortgage loans. We also had significant growth in our investment advisory business, Claremont Financial Services.
Non-Interest Expense increased 5.1% due to expenses related to our investment in a solar project in Springfield, Vermont (offset by reduced income taxes) and an increase in salaries.
Finally, the most dramatic change was in the value of our stock portfolio. The value of our stocks increased by $3.1 million in the first half of 2021 compared to a decrease of $2.8 million in the first half of 2020, for a swing of $6 million. Our net income for the first six months of 2021 was $4.3 million compared to a loss of $2.2 million in the year-earlier period.
Total Assets grew to $491 million due to stimulus funds received by our customers that had not been spent. We used the excess cash to reduce borrowings by $21 million. Loans were down slightly despite high new loan activity. Investments were up by $10 million. Our capital increased to $70 million and our capital ratio increased to 14.24%, a very strong number compared to most other banks.
We expect a good second half of 2021 but are concerned with the ongoing low rate environment. We acknowledge the difficulty our commercial customers are having attracting workers and hope the local labor market comes back into balance soon. There are some great new projects happening in our markets. Our staff has returned to the office with a few exceptions. We are excited to be opening a new branch on North Main Street in West Lebanon. I again want to publically thank the staff of the Bank for their hard work and perseverance.
Reginald E. Greene, Jr.
President and CEO
Income Statement
| Six Months | Six Months | ||
| June 30, 2021 | June 30, 2020 | ||
| Total Interest Income | $ 7,558,510 | $8,221,205 | |
| Total Interest Expense | (1,034,764) | (1,677,497) | |
| Net Interest Income | $6,523,746 | $ 6,543,708 | |
| Provision for Loan Losses | 298,675 | (1,155,500) | |
| Non-Interest Income | 1,627,756 | 1,195,354 | |
| Non-Interest Expense | (6,772,766) | (6,383,924) | |
| Realized and Unrealized Securities Gains | 3,141,065 | (2,838,296) | |
| Pre-Tax Income | $4,818,476 | $(2,638,658) | |
| Income Taxes | (609,817) | 462,609 | |
| Net Income | $4,208,659 | $(2,176,049) |
Balance Sheet
| June 30, 2021 | December 31, 2020 | ||
| Cash & Due from Banks | $32,071,009 | $29,697,763 | |
| Bonds | 46,058,174 | 41,203,052 | |
| Stocks | 32,176,082 | 26,991,349 | |
| Loans (Net) | 353,705,535 | 357,582,247 | |
| Other | 26,627,915 | 24,585,990 | |
| Total | $490,638,715 | $480,060,401 | |
| Deposits | $406,151,250 | $391,882,069 | |
| Borrowings | 8,000,000 | 17,000,000 | |
| Other Liabilities | 6,747,929 | 5,214,570 | |
| Capital | 69,739,536 | 65,963,762 | |
| Total | $490,638,715 | $ 480,060,401 |
View a PDF version of the June 2021 Statement of Condition.
View our past Statements of Condition: