York Traditions Bank Reports Third Quarter 2020 Earnings

YORK, Pa., Oct. 28, 2020 /PRNewswire/ -- York Traditions Bank (OTC Pink: YRKB) reported net income of $2.8 million, or 89 cents per share (diluted), for the third quarter ended September 30, 2020, compared to $1.5 million, or 47 cents per share, for the third quarter ended September 30, 2019. This represents a $1.3 million or 92% increase over the third quarter of 2019. Net income for the nine months ended September 30, 2020 was $6.1 million, or $1.94 per share, an increase of $2.0 million, or 50%, over the first nine months of last year. Book value per common share climbed to $20.00 on September 30, 2020.

"Despite the devastating and divergent effects of COVID-19 on our nation, the long-term impact of which remains uncertain, we achieved exceptional results for the quarter," stated Eugene J. Draganosky, President and Chief Executive Officer. "Unprecedented residential mortgage activity, continued balance sheet growth, and pricing discipline are collectively fueling pre-tax/pre-provision income to record heights, and we have set a new earnings record for the first nine months of the year. Compared to 2019 results, gains on sale of mortgages increased $3.5 million for the quarter and $5.8 million on a year-to-date basis due to low interest rates and a surge in demand. The sustainability of this housing boom is unclear. Currently, the pandemic is a catalyst for changing homeowner space preferences, and that trend is anticipated to continue into 2021. Residential mortgage loans sold in the third quarter were $117.9 million, compared to $88.7 million in the second quarter of 2020 and $54.9 million in the third quarter of 2019. Our residential mortgage loan pipeline stood at $107.2 million on September 30, 2020, compared to $73.4 million at the end of the second quarter.

"Over the last twelve months, our balance sheet has expanded significantly with net loan growth of $75.3 million since September 30, 2019, including $52.1 million from SBA Paycheck Protection Program (PPP) loans. The loans were funded with deposit growth of $94.3 million. We continue to maintain disciplined loan pricing while reducing our overall cost of funds by 12 basis points from the second quarter. This strategy has helped maintain our net interest margin in a narrow range, currently 3.41% for the quarter, and increased our net interest income by $1.6 million for the first nine months of 2020. Net fees recognized on PPP loans were $684,000 year to date. Fees from interest rate swaps on loans for business customers continue to grow and now stand at $317,000 for 2020.

"The COVID-19 virus is dictating the economy's path, and the severity of credit quality concerns remains unknown. Our exposure to industries most significantly impacted by the pandemic totaled $32.5 million on September 30, 2020. Affected industries primarily include restaurants/bars, movie theatres, and hotels. Loans modified for temporary payment relief were $21.7 million or approximately 4.5% of the total loan portfolio at quarter end, which was down from $71.3 million or roughly 15% on June 30, 2020. As of September 30, 2020, there were no modifications granted past six months; however, we expect to receive extended payment relief requests during the fourth quarter. An additional $2.0 million provision for loan losses was provided in the third quarter and $3.6 million year to date, bringing the allowance/loan ratio, excluding held-for-sale loans, to 1.32%. For the current period, net recoveries of $40,000 were realized while net charge-offs were $1.2 million for the year. Our credit metrics continue to be satisfactory with non-performing assets/total assets of 0.18%. The Bank remains well capitalized."

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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