Attached files
Exhibit 99.1
April 30, 2014
Earnings Report
March 31, 2014
Dear Shareholders:
We are pleased to report for the quarter ended March 31, 2014, earnings
for your company were up 3.7% over those of March 31, 2013. For the
first quarter, we earned $1.77 million compared to $1.71 million for the
same period in 2013. Earnings per share, on a fully diluted basis,
increased from $0.63 to $0.66 which represents a 4.8% increase over the
first quarter of 2013. The increase in earnings was largely driven by
two large loan recoveries of principal and interest, which had previously
been written off.
Loan and investment yields continue to decline as the extended period of
low interest rates impacts spreads and margins. The reduced activity in
residential real estate refinancing also impacted us, in that the gain on
the sale of those loans in the secondary market was reduced by
approximately $500,000 compared to the same period last year.
Also, our interest expense increased as a result of a strategic decision
to borrow additional funds from the Federal Home Loan Bank at a long term
fixed rate. Our strategic thinking is that longer term rates are
increasing, and we believe that in 2015 and 2016 rates will likely
increase even more. By borrowing now we have incurred some additional
interest expense, but over the long term we can help reduce our interest
expense in the future.
Total assets increased over the March 31, 2013 total by 10.7% with loans
increasing 12.2% over the same period. Deposits continue to increase as
well, providing growth of 5.7% over the first quarter of 2013.
The national and local economies continue to show gradual improvements.
Some increased commercial loan demand and increased financing of home
purchases reflect some of that activity. However, our state employment
numbers continue to be a drag on our economy.
Our Madison County location opened in February and we are now looking for
increased activity there. Market President John Hamilton has assembled a
strong team, with all members having local ties to that community and
bringing a wealth of experience.
Your stock continues to show increased market value and closed the
quarter at $24.75 which is up from $23.03 this time last year. The
dividend declared in the first quarter represents an annual yield of
4.04%. Our goal, as always, is to provide an excellent return on
investment to our shareholders, through the delivery of Premier Customer
Service and by adding value to our customer and client relationships.
As always, we appreciate your support.
/s/Louis Prichard
Louis Prichard
President, CEO
UNAUDITED
CONSOLIDATED BALANCE SHEET
Percentage
3/31/2014 3/31/2013 Change
Assets
Cash & Due From Banks $ 21,507,735 $ 15,352,080 40.1%
Securities 236,364,198 223,003,978 6.0
Trading Assets 5,108,033 - n/a
Loans Held for Sale 149,400 134,400 11.2
Loans 474,011,586 422,319,748 12.2
Reserve for Loan Losses 5,616,396 5,623,131 -0.1
Net Loans 468,395,190 416,696,617 12.4
Federal Funds Sold 369,000 161,000 129.2
Other Assets 50,760,340 51,766,598 -1.9
Total Assets $ 782,653,896 $ 707,114,673 10.7%
Liabilities & Stockholders' Equity
Deposits
Demand $ 165,674,861 $ 147,899,394 12.0%
Savings & Interest Checking 274,437,415 256,343,639 7.1
Certificates of Deposit 187,891,783 190,110,146 -1.2
Total Deposits 628,004,059 594,353,179 5.7
Repurchase Agreements 11,401,569 6,983,598 63.3
Other Borrowed Funds 64,597,235 24,833,562 160.1
Other Liabilities 6,700,659 7,146,923 -6.2
Total Liabilities 710,703,522 633,317,262 12.2
Stockholders' Equity 71,950,374 73,797,411 -2.5
Total Liabilities & Stockholders' Equity $ 782,653,896 $ 707,114,673 10.7%
CONSOLIDATED INCOME STATEMENT
Three Months Ending
Percentage
3/31/2014 3/31/2013 Change
Interest Income $ 7,282,534 $ 6,955,751 4.7%
Interest Expense 933,174 821,683 13.6
Net Interest Income 6,349,360 6,134,068 3.5
Loan Loss Provision 100,000 450,000 -77.8
Net Interest Income After Provision 6,249,360 5,684,068 9.9
Other Income 2,268,384 2,602,252 -12.8
Other Expenses 6,453,891 6,176,085 4.5
Income Before Taxes 2,063,853 2,110,235 -2.2
Income Taxes 292,417 401,220 -27.1
Net Income $ 1,771,436 $ 1,709,015 3.7
Net Change in Unrealized Gain (loss)
on Securities 3,251,229 (1,251,863) -359.7
Comprehensive Income $ 5,022,665 $ 457,152 998.7%
Selected Ratios
Return on Average Assets 0.91% 0.96%
Return on Average Equity 10.04 9.23
Earnings Per Share $ 0.66 $ 0.63
Earnings Per Share - assuming dilution 0.66 0.63
Cash Dividends Per Share 0.25 0.24
Book Value Per Share 26.44 27.08
Market Price High Low Close
First Quarter '14 $24.80 $23.90 $24.75
Fourth Quarter '13 26.25 24.15 24.24
