December 2021
The pandemic continued to affect our customers and the operation of the Bank in 2021. We saw extraordinary organic deposit growth from government stimulus payments, which included another round of Payroll Protection Program (PPP) loans. Interest rates on loans and deposits stayed at record lows for most of the year. Credit quality remained high and our charge-offs and delinquencies were at historic lows. Our two largest challenges now are staffing and inflation.
Despite the strong origination of new residential and commercial loans, our year-end loan balance declined from 2020 due to high refinancing activity and SBA forgiveness of PPP loans. Core deposits increased by $41.5 million, greatly in excess of what we expected. Cash from deposits was used to reduce advances from the Federal Home Loan Bank and higher priced national certificates of deposit.
The lower interest rates led to refinancing of our loan portfolio, which also reduced our Net Interest Margin. Eliminating the effect of the PPP loans, our Net Interest Margin fell from 3.02% in 2020 to 2.83% in 2021. The loss in margin was offset by the fees earned on PPP loans and growth in Non-Interest Income, specifically from increased debit card interchange income.
In 2020 we took a $1.2 million provision for loan losses because we expected that our customers would have trouble paying their loans. In 2021, once we determined that our customers were in good shape, we reversed $222,762 from the reserve, increasing our income.
Non-Interest Expense, which includes salaries and benefits, and technology costs, was up 2% due primarily to increased technology expenses.
The Bank has a stock portfolio that was worth about $36 million at December 31, 2021. The stock market did exceptionally well in 2021 and the value of our portfolio increased by $5.6 million. Due to an accounting change a couple of years ago, that increased value now shows in our net income for the year. As a result our total net income in 2021 was $7.6 million, up from $2.6 million in 2020.
Our return on assets was 1.55%, up from .55% in 2020. Excluding the unrealized gain on our stock portfolio, our core return on assets was .61%, up from .38% in 2020, due primarily to the swing in our loan loss provision expense. We ended the year with a solid capital ratio of 14.83%, well above the minimum Community Bank Leverage Ratio of 9%.
We are proud of our efforts to support our communities. Both the Bank and the Claremont Savings Bank Foundation donated about $100,000 to local non-profit organizations. The Bank continues to grow the assets of the Foundation by giving it appreciated stock. We are executing on our new strategic plan, which is 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.
Reginald E. Greene, Jr.
President and CEO
Income Statement
| Twelve Months | Twelve Months | ||
| December 31, 2021 | December 31, 2020 | ||
| Total Interest Income | $15,203,562 | $15,407,811 | |
| Total Interest Expense | 1,707,899 | 2,888,916 | |
| Net Interest Income | $13,495,663 | $13,518,895 | |
| Provision for Loan Losses | 221,762 | (1,183,600) | |
| Non-Interest Income | 3,105,208 | 2,795,239 | |
| Non-Interest Expense | (13,685,551) | (13,408,728) | |
| Pre-Tax Core Income | 3,137,082 | 1,721,806 | |
| Realized and Unrealized Securities Gains | 307,768 | 52,971 | |
| Unrealized Investment Gains | 5,567,984 | 917,565 | |
| Pre-Tax Income | $9,012,834 | $(2,692,342) | |
| Income Taxes | (1,404,162) | (138,419) | |
| Net Income | $7,608,672 | $2,553,923 |
Balance Sheet
| December 31, 2021 | December 31, 2020 | ||
| Cash & Due from Banks | $23,419,655 | $29,697,763 | |
| Bonds | 49,836,773 | 39,766,869 | |
| Stocks | 28,076,819 | 22,831,041 | |
| Unrealized Gains | 10,154,411 | 5,596,491 | |
| Loans (Net) | 349,734,659 | 357,582,247 | |
| Other | 29,677,600 | 24,585,990 | |
| Total | $490,899,917 | $480,060,401 | |
| Deposits | $400,277,739 | $391,882,069 | |
| Borrowings | 8,000,000 | 17,000,000 | |
| Other Liabilities | 9,847,695 | 5,214,570 | |
| Capital | 72,774,483 | 65,963,762 | |
| Total | $490,899,917 | $ 480,060,401 |
View a PDF version of the December 2021 Statement of Condition.
View our past Statements of Condition: