York Traditions Bank Reports Second Quarter 2020 Earnings

YORK, Pa., July 28, 2020 /PRNewswire/ -- York Traditions Bank (OTC Pink: YRKB) reported net income of $2,122,000, or 67 cents per share (diluted), for the second quarter ended June 30, 2020, compared to $1,505,000, or 48 cents per share, for the second quarter ended June 30, 2019. The quarterly earnings growth represents a $617,000, or 41%, increase over the second quarter of 2019. Net income for the six months ended June 30, 2020, was $3,294,000, or $1.05 per share, an increase of $701,000, or 27%, over the first six months of last year. Book value per common share finished the second quarter at $19.08, advancing $1.93, or 11%, from a year ago.

"While navigating unprecedented COVID-19 challenges, we achieved record results for the second quarter and first six months of the year," stated Eugene J. Draganosky, President and Chief Executive Officer. "Earnings were buoyed by exceptional mortgage production and significant loan growth. Loan volume was propelled, in part, by the generation of $52 million of SBA Paycheck Protection Program (PPP) loans that will yield more than $2 million in fee recognition over the life of the loans. The resulting improvements in profitability drove year-to-date ROA to 1.15% and ROAE to 11.45%. Gains on the sale of mortgages increased $1,719,000 for the quarter and $2,324,000 year to date on low interest rates and a re-emerging housing market. Net interest income grew $609,000, or 14%, for the quarter and $922,000, or 11%, for the first six months of the year. Despite the margin pressures due to the precipitous fall in interest rates since the start of the pandemic, our current quarter net interest margin of 3.43% has demonstrated resiliency. The margin has ranged from a high of 3.47% to a low of 3.41% over the past four calendar quarters. The start of SBA PPP loan fee revenue recognition during the second quarter created a minimal three-basis-point positive swing in the margin. Lastly, an emerging source of income is the generation of interest rate swaps on loans for business customers, accounting for $245,000 in fees so far this year.

"For the first time in our history, we have surpassed $600 million in assets during the quarter. Over the last twelve months, loans increased by $78,415,000, or 20%, and deposits grew $124,334,000, or 30%. While our capital levels would not sustain such growth for an extended period, the current level of Tier 1 capital to average assets remains satisfactory at 9.90% as of June 30.

"The severity of COVID-19-related credit quality concerns remains unknown for our country. Our commercial and commercial real estate obligors, significantly impacted by the pandemic, are primarily concentrated in the hospitality and retail trades, including businesses serving those industries. Aggregate loan exposure to these businesses is estimated to be $31.0 million, or 6.6%, of our total loans. As of June 30, 2020, $71.1 million, or approximately 15%, of our loan portfolio is currently modified for temporary payment relief. We will gain improved insight relative to loan performance as these temporary accommodations cease. Accordingly, we continue to increase our provision for loan losses due to the uncertainty of future loan write-downs. Net loan charge-offs were $590,000 for the quarter and included the remaining balance of the $1.2 million business loan previously disclosed and partially charged off in the first quarter. Quarterly 2020 credit quality metrics remain satisfactory with non-performing assets to total assets of 0.17% as of June 30."

SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS:

This presentation contains forward-looking statements about York Traditions Bank that are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are not historical facts.  These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," "anticipate" or similar terminology.  Such forward-looking statements include, but are not limited to, discussions of strategy, financial projections and estimates and their underlying assumptions; statements regarding plans, objectives, goals, expectations or consequences; and statements about future performance, operations, products and services of York Traditions Bank.

York Traditions Bank cautions readers not to place undue reliance on forward-looking statements and to consider possible events or factors that could cause results or performance to materially differ from those expressed in the forward-looking statements, including, but not limited to:  ineffectiveness of the bank's business strategy due to changes in current or future market conditions; the effects of competition, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products and services; interest rate movements; difficulties in integrating distinct business operations, including information technology difficulties; challenges in establishing and maintaining operations in new markets; volatilities in the securities markets; and deteriorating economic conditions.

Forward-looking statements in this presentation speak only as of the date of this presentation and York Traditions Bank makes no commitment to review or update such statements to reflect changes that occur after the date the forward-looking statement was made.

SOURCE York Traditions Bank

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