December 2020
The pandemic created many challenges for Claremont Savings Bank and its customers. We were pleasantly surprised to see how easily we moved to a remote working environment in March. At one point, we had two-thirds of our employees working from home. We closed the lobbies of our branches for a while in March and April, and just closed them again in January 2021. In the meantime, we built a walk-up teller window at our Broad Street office, so walking customers did not have to stand in the drive through lanes.
Our customers appear to be doing relatively well. Our loan delinquencies were as low as they have been in many years and we only had one customer’s loan still in forbearance in February. Deposits are high due to stimulus payments and the U.S. Small Business Administration’s Payroll Protection Program (“PPP”) loan proceeds. We processed 204 PPP loans for a total of $21.2 million in 2020. In addition, we had record residential mortgage volume. As a result of the new loans made and increased deposits, we grew total assets by $43 million to $480 million.
The growth in loans was offset by a reduction in our Net Interest Margin, a result of declining interest rates. New loans were made at reduced rates, and our rates paid on certificates of deposit and money market accounts dropped to almost zero. Our Net Interest Margin fell from 3.28% in 2019 to 3.04% in 2020. Despite the loan growth, our Net Interest Income was only up 1% for the year.
One area of concern in the early months of the pandemic was its effect on our customers. Due to that uncertainty, we increased our Provision for Loan Losses to $1.2 million, up from $341,000 in 2019. We have not seen any significant credit issues to-date, and the result has been an increase on our Allowance for Loan Losses from 1.15% of loans to 1.26% of loans.
Growth in Non-Interest Income was 46% due to the gain on sale of mortgage loans sold to the Federal Home Loan Bank of Boston, new income from our investment in Bank Owned Life Insurance and increased debit card income.
Non-Interest Expense, which includes salaries and benefits, and technology costs, was up 4.2% due to increased salary expense and the amortization of our investment in a solar project in Springfield, Vermont. The solar investment, which supported nine low-income housing properties in Vermont, came with tax credits, reducing our federal tax liability. Our tax rate of 7.8% in 2020 was well below the rate of 14.7% in 2019.
Net Income for the year was $2.5 million, down from $3.2 million in 2019. The primary reasons for the decline was the $773,478 gain on the sale of equity securities in 2019 and the $842,600 increase in Provision Expense in 2020. Our return on assets was .55%, and we ended the year with a strong capital ratio 13.74%, down slightly from year-end 2019 due to the growth in assets.
Despite the pandemic, we were able to execute on our 2020 strategic plan, which focused on investing in revenue generating business lines, being a trusted advisor to our customers, workforce planning and fulfilling our internal message of “We Care” when dealing with our customers, the community and our employees. In 2020, Claremont Savings Bank donated over $200,000 to the Claremont Savings Bank Foundation and local non-profit organizations, up from $153,000 in 2019.
Reginald E. Greene, Jr.
President and CEO
Income Statement
| Twelve Months | Twelve Months | ||
| December 31, 2020 | December 31, 2019 | ||
| Total Interest Income | $16,407,811 | $16,713,228 | |
| Total Interest Expense | 2,888,916 | 3,311,039 | |
| Net Interest Income | $13,518,895 | $13,402,189 | |
| Provision for Loan Losses | (1,183,600) | (341,000) | |
| Non-Interest Income | 2,795,239 | 1,911,094 | |
| Non-Interest Expense | (13,408,728) | (12,867,723) | |
| Gain on Sale of Securities | 52,971 | 773,478 | |
| Pre-Tax Income | $1,774,777 | $2,878,038 | |
| Income Taxes | (138,419) | (423,177) | |
| Net Income before Extraordinary Items | 1,636,358 | 2,454,861 | |
| Unrealized Gain on Stock Portfolio | 917,565 | 914,514 | |
| Write off of Charlestown Road Branch | - | (154,000) | |
| Net Income | $2,553,923 | $3,215,375 |
Balance Sheet
| December 31, 2020 | December 31, 2019 | ||
| Cash & Due from Banks | $29,697,763 | $18,517,353 | |
| Bonds | 41,203,052 | 41,904,155 | |
| Stocks | 26,991,349 | 25,929,119 | |
| Loans (Net) | 357,582,247 | 336,390,838 | |
| Other | 24,585,990 | 14,474,761 | |
| Total | $480,060,401 | $437,216,226 | |
| Deposits | $391,882,069 | $334,022,314 | |
| Borrowings | 17,000,000 | 34,500,000 | |
| Other Liabilities | 5,214,570 | 5,543,943 | |
| Capital | 65,963,762 | 63,149,969 | |
| Total | $480,060,401 | $437,216,226 |
View a PDF version of the December 2020 Statement of Condition.
View our past Statements of Condition: