Accounts – Utah BBQ http://utahbbq.org/ Wed, 21 Jul 2021 10:21:25 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://utahbbq.org/wp-content/uploads/2021/04/cropped-ICON-32x32.png Accounts – Utah BBQ http://utahbbq.org/ 32 32 Japan’s cash balance hits new high as BOJ pours cash to fight pandemic https://utahbbq.org/japans-cash-balance-hits-new-high-as-boj-pours-cash-to-fight-pandemic/ Fri, 19 Mar 2021 08:44:15 +0000 https://utahbbq.org/japans-cash-balance-hits-new-high-as-boj-pours-cash-to-fight-pandemic/

The cash balance in the Japanese economy hit 543 trillion yen in May, hitting a record high for the second month in a row, as the central bank injected more liquidity to cushion the blow to businesses and to consumers by the coronavirus pandemic.

Armed with a series of lending programs designed to encourage commercial banks to increase lending to cash-strapped businesses, the Bank of Japan is expected to continue expanding its balance sheet to mitigate the fallout from the health crisis, analysts said.

“The Japanese economy will likely be in crisis mode for at least the rest of the year. It would be very difficult for the BOJ to slow the pace of money printing, ”said Mari Iwashita, chief market economist at Daiwa Securities.

The base money balance, or the amount of cash in circulation and deposits at the BOJ, stood at 543.4 trillion yen ($ 5 trillion) at the end of May, up 2.7 percent from compared to the previous month, according to central bank data on Tuesday.

As part of the monetary easing measures taken in April, the BOJ expanded a lending scheme created in March and pledged to pay financial institutions 0.1% interest on borrowings and business loans. This decision resulted in an increase in the number of regional banks participating in the program.

In May, the BOJ also unveiled its own version of the US Federal Reserve’s “Main Street” lending program to funnel nearly $ 280 billion to small businesses affected by the coronavirus and prevent the economy from sinking deeper into the economy. recession.

While the BOJ’s aggressive monetary measures are seen as key to tackling the crisis, they complicate its long-standing efforts to shift its policy focus away from the pace of money printing towards interest rates.

After years of massive asset purchases that failed to stimulate inflation, the central bank switched to a policy of targeting interest rates in 2016. Controlled by the yield curve, it guides short-term rates to minus 0.1% and long-term bond yields around 0%.

The Japanese government lifted the national state of emergency last week. But the economy is on the verge of a deep recession as the pandemic has disrupted supply chains, affected global and domestic demand and forced many businesses to close.

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Intelligent Loans supports new business dynamic with the appointment of Laura Knopp https://utahbbq.org/intelligent-loans-supports-new-business-dynamic-with-the-appointment-of-laura-knopp/ Fri, 19 Mar 2021 08:44:14 +0000 https://utahbbq.org/intelligent-loans-supports-new-business-dynamic-with-the-appointment-of-laura-knopp/

Intelligent Loans, the Cardiff-based corporate lending and finance specialist, has announced the appointment of Laura Knopp as Head of Business Development.

Laura has over 20 years of industry experience, having spent much of her career creating new business opportunities and helping UK SMEs access the financing solutions they need to make their business plans a reality. business. In her new role, she will be responsible for building and maintaining strong brokerage relationships in the South of England while expanding Intelligent Loans’ secured and unsecured business loan offering.

Commenting on her appointment, Laura said: “In what continues to be difficult and uncertain times for many business owners, taking on this new role represents a great opportunity to inspire confidence and provide support. thanks to our financial solutions.

“I am delighted to join a team that during this time has shown resilience and earned an excellent reputation by placing their broker partners and clients at the center of everything they do.

Alun Winter, Head of Loans at Intelligent Loans, said: “As businesses begin to emerge from the current crisis and government initiatives such as CBILS come to an end, we know that many business owners will be looking for a financing solution. support to help aid recovery and growth. Laura’s appointment comes at a pivotal time for us as we remain committed to ensuring SMEs are offered a viable financing solution that is right for them.

“We are confident Laura will be a great addition to the team with her proven track record of building lasting relationships with her network of brokers and her dedication to supporting UK businesses during this crisis.”

Intelligent Loans’ secured and unsecured business loan solutions can provide a flexible source of funds to support current business or growth plans. As a member of the 1pm group of companies, Intelligent Loans also provides access to a multi-product line of corporate finance, from asset finance to invoice finance to vehicle finance.

As UK SMEs face a cash flow crisis, the company is committed to ensuring its clients have adequate funding to negotiate under these difficult conditions. The 1pm group is also recognized as an accredited lender under the Coronavirus Business Interruption Loan (CBILS) program with the British Business Bank and is helping SMEs access the cash they urgently need to weather the crisis. of COVID-19.

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From October 1, 5% tax on transfers of foreign funds https://utahbbq.org/from-october-1-5-tax-on-transfers-of-foreign-funds/ Fri, 19 Mar 2021 08:43:46 +0000 https://utahbbq.org/from-october-1-5-tax-on-transfers-of-foreign-funds/

Any amount sent abroad to purchase organized trips abroad, and any other foreign remittances made above 7 lakh, will attract a tax collected at source (TCS) from October 1, unless the tax is already deducted at source (TDS) on this amount.

While the overseas tour package tax will be 5% for any amount, for other overseas money transfers the tax will only come into effect for the amount spent above. 7 lakh.

For foreign education-related remittances financed by cash loans, however, the tax will only be 0.5% for the above amount. 7 lakh, since many Indian students take out loans to continue their studies abroad.

Under the Reserve Bank of India’s liberalized remittance program, individuals can send a maximum of $ 250,000 abroad each year. The provision for the collection of the tax on remittances was introduced in the 2020 finance law subject to the amendments and notified on March 27 with effect from October 1.

Many financial institutions have communicated on the applicability of the withholding tax on October remittances to customers.

The Union Ministry of Finance has broadened the scope of withholding tax and withholding taxes, and has encouraged electronic payments in order to get a better picture of transactions in the Indian economy and to d ” be able to match the expenditure pattern of people assessed with their declared taxable income.

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Florida Court Says Merchant Cash Advance Proceeds Not Subject to Usury Act | Bradley Arant Boult Cummings LLP https://utahbbq.org/florida-court-says-merchant-cash-advance-proceeds-not-subject-to-usury-act-bradley-arant-boult-cummings-llp/ Fri, 19 Mar 2021 08:43:46 +0000 https://utahbbq.org/florida-court-says-merchant-cash-advance-proceeds-not-subject-to-usury-act-bradley-arant-boult-cummings-llp/

[co-author: Shelby Lomax]

This month, a Florida appeals court ruled that an agreement to buy and sell a Merchant Cash Advance (MCA) was not a “disguised loan” and, therefore, was not subject to the Criminal Usury Act. Florida. MCA’s buy and sell agreements, which provide merchants with a fast and efficient way to obtain financing for their operations, are not loans. Rather, these agreements constitute the purchase of future receipts from a merchant by MCA. However, some traders have claimed that MCAs are “disguised loans” subject to the usury law of their respective states. While several states have well-developed case law that differentiates lending from the buying and selling of receivables, Florida suffers from a relative lack of authority on the matter. Fortunately, in Craton Entertainment, LLC v Merchant Capital Group, LLC, Florida Third District Court of Appeals issued a Reasoned Opinion stating that a contract to buy and sell MCA was not a loan and therefore not subject to the Criminal Usury Act from Florida. This decision provides a good precedent for MCAs facing requalification claims in Florida and welcome advice for MCA companies doing business with merchants in Florida.

In 2016, Merchant Capital sued Craton for the default of an MCA transaction. Craton responded with a counterclaim on 12 counts. In a nutshell, Craton argued that the buy and sell agreement was a disguised loan and that Merchant Capital had violated Florida’s criminal usury law. The parties have filed concurrent motions for summary judgment on their respective claims and counterclaims. Ultimately, the trial court ruled in favor of Merchant Capital, ruling that the underlying transaction was the sale of future receivables subject to a reconciliation provision, and not a loan subject to lending laws. Florida wear.

Craton appealed to the Florida Third District Court of Appeals, arguing that the court of first instance made a mistake by arguing that the contract of purchase and sale was not a loan. Specifically, Craton claimed that the agreement contained all the characteristics of a loan. For example, Craton cited the common practice of subjecting the company to a credit check, the lack of any provision in the agreement allowing for the “forgiveness” or “cancellation” of “debt”, the security that Merchant Capital took over the assets of Craton, and the personal guarantee signed by the owner of Craton.

In response, Merchant Capital argued that the clear language of the agreement indicated that the parties were considering a buy-sell arrangement. Perhaps more importantly, the agreement itself did not bear the hallmark of a loan: the absolute right of the party advancing the funds to demand repayment. Instead, Merchant Capital’s ability to obtain funds from Craton was expressly conditioned by Craton’s ability to generate income. In addition, and contrary to Craton’s assertions during the litigation, the owner’s personal guarantee did not guarantee reimbursement. On the contrary, the owner of Craton has guaranteed the performance of Craton under the contract of purchase and sale. Merchant Capital also referred to the reconciliation provision, which was designed to calibrate withdrawals from Craton’s bank accounts based on the ebb and flow of Craton’s business.

Eventually, the Third District Court of Appeal upheld the judgment of the lower court, ruling that the purchase and sale contract was not a loan. Better yet, the one-page court order served as the basis for its decision, citing several favorable decisions in Florida. As such, this ruling sets a good legal precedent for MCA companies arguing similar claims. Notably, the court cited case law to assert that an MCA agreement is not a loan where “the repayment obligation is not absolute, but rather depends or depends on the success of the underlying business”. The court also cites case law recognizing that a transaction is not a loan where “part of the investment is at speculative risk”.

Carry

the Market capital This move is very good news for MCA companies doing business with merchants in Florida. The underlying lawsuit involved several commonly contentious issues in the MCA space, and the court ruled unequivocally on the side of the MCA company. This case also illustrates the importance of a carefully structured purchase and sale contract. Keep in mind, however, that a well-designed deal on its own will not fully protect MCA companies from successful requalification requests. Courts in states other than Florida have reclassified MCA’s purchase and sale contracts as loans based on how the parties treat, advertising, and other factors. Although useful, the Market capital the decision is not about the practices outside of the agreement which could present a risk of requalification. Companies should invest time and resources to perform internal and external audits of all business processes, including marketing, websites and social media, as well as internal policies and procedures to monitor compliance with various corporate laws. States differentiating loans from MCAs.


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3 stocks to buy with dividends paying more than 6% https://utahbbq.org/3-stocks-to-buy-with-dividends-paying-more-than-6/ Fri, 19 Mar 2021 08:43:46 +0000 https://utahbbq.org/3-stocks-to-buy-with-dividends-paying-more-than-6/

Interest rates could be up from lows reached in the middle of last year, when the novel coronavirus pandemic was raging. But since rates haven’t improved too much from these record lows, overall dividend yields on stocks are correspondingly low.

Fortunately, there are compelling exceptions to this standard. Some of the best opportunities income investors can consider today are: Iron mountain (NYSE: MRI), ONEOK (NYSE: OKE), and Asset management Artisan Partners (NYSE: APAM). Here’s a closer look.

Image source: Getty Images.

Iron mountain

Dividend yield: 6.7%

Iron Mountain’s roots are curious, to say the least – its business is based on storing paperwork for organizations that don’t have the space to keep these documents on-site. For example, banks are required to keep signed loan documents, but they are not required to keep these documents right behind the counter.

The company has expanded its offerings since its inception in 1951, adding related services such as document shredding and even secure storage of works of art. It is also suitable for workplace digitization, providing document scanning and data backup services to the cloud, to name just a few items on its more modern menu. Not only are all of these offerings marketable in perpetuity, but its services are cross-marketable. That is, users of one of its services are likely to need another.

That’s not the nuance that makes Iron Mountain such a reliable dividend name, however. The main selling point here is the nature of the business. Organizations pay Iron Mountain an ongoing fee for its services, which are relatively easy (read: inexpensive) to maintain once they’re installed. In other words, there is time and difficulty in getting a load of paperwork into a warehouse where it needs to be put on shelves. Once it’s on that shelf, however, the company’s customers primarily pay Iron Mountain to sit on it.

There isn’t a lot of growth in the business, but there is a lot of steady, predictable cash flow. And because Iron Mountain is structured like a real estate investment trust (REIT), it is required to pay at least 90% of the taxable income to the shareholders. Final result? The company has not failed to pay a dividend in any quarter since the start of 2010.

ONEOK

Dividend yield: 7.2%

Most investors may be familiar with crude oil and natural gas prices fell in the first half of last year, largely on fears of a coronavirus-induced recession. What they may not realize, however, is that demand for gas and oil never really fell significantly. The US Energy Information Administration estimates that global crude consumption fell only 9% in 2020, with much of the contraction linked to logistical hurdles rather than demand issues. The EIA further estimates that US natural gas consumption also fell last year, but only by about 2%.

The data highlights an important reality in the energy market: not all energy stocks are the same. Explorers and producers are extremely affected by the drop in hydrocarbon values, as the cost of drilling and extraction is the same regardless of the selling price of the gas and oil extracted and delivered. The cost of delivering this gas and oil, however, holds fairly stable.

Enter ONEOK, one of the country’s leading natural gas pipeline and processing companies. It is paid per cubic foot for the gas it collects, processes or transports, regardless of the value of that gas at that time.

The resilience of the business is evident in last year’s results. Despite falling gas and crude prices, ONEOK 2020 EBITDA was 6% higher than in 2019 despite the headwind in demand. The company is also calling for a rebound in volumes this year. This move, however, does not necessarily prevent the company from doing so at a later date this year. Maybe more important. ONEOK has not failed to pay a dividend in any quarter since the early 1970s.

Better yet, it can afford to pay the dividends it distributes. While ONEOK’s operating earnings per share have historically been lower than its dividend, in the capital-intensive gas pipeline industry, Distributable Cash Flow (or DCF) is a much more accurate measure of the level of support from ONEOK. a payment. Despite the challenges of last year, the company’s 2020 DCF of around $ 4.38 was more than enough to fund the $ 3.74 dividend. The same story holds for previous years.

Asset management Artisan Partners

Dividend yield: 6.2%

Finally, have you ever heard of the Artisan family of mutual funds? You can also invest in the company that manages them, collecting a portion of the fees it collects each quarter for the assets under the management of the company.

Artisan Partners’ business model is a bit like Iron Mountain, in that the company earns ongoing revenue to provide minimal service to existing clients without necessarily attracting new ones. This is not to say that Artisan does not endeavor to add new investments to its funds, nor to suggest that investors do not regularly close their positions in these funds. Heck, even the ebb and flow of the market affects the value of the investment pools on which the fund company bases its quarterly management fees.

Overall, however, the corresponding cash flow is fairly stable even if absolute growth is not. Indeed, the company has not failed to make a profit in a quarter since its IPO in 2013. This has allowed the asset manager to pay a reliable and healthy dividend every quarter since then, even. if the payment amount has not been paid. I haven’t been completely predictable.

In the meantime, Artisan Partners brings something else to the table: value. Stocks are valued at an acceptable price 15 times earnings in the past 12 months and only 11 times expected earnings per share for the coming year. The share price is also 16% below the current analyst consensus target, opening the door for some price appreciation as investors collect their above-average dividends.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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Tesla ($ TSLA) led Green Boom Rose from the ashes of Solyndra https://utahbbq.org/tesla-tsla-led-green-boom-rose-from-the-ashes-of-solyndra/ Fri, 19 Mar 2021 08:43:46 +0000 https://utahbbq.org/tesla-tsla-led-green-boom-rose-from-the-ashes-of-solyndra/

Photographer: Bloomberg / Bloomberg

This is Bloomberg Opinion Today, a Bloomberg Opinion whistleblower. register here.

Agenda of the day

The Solyndra also rises

About 10 years ago, a solar power company that used a high-profile federal loan guarantee to build a massive Silicon Valley factory with Disney-tune-whistling the robots and space age showers were on the verge of bankruptcy.

The company was called Solyndra, and its meteoric demise became a political headache for then-President Barack Obama and perhaps made some politicians hesitant to spend more government money on green energy. It also marked the end of a brief but unbridled boom in cleantech investment. Fast forward to 2021, and it’s like Solyndra never happened. Public opinion strongly favors government intervention to fight climate change. The new darling of American companies, Tesla, has amassed billions of dollars in government subsidies – including some of the same guarantees that helped Solyndra. And investors are again throwing money at anything in the green region of the color wheel.

Is everything going to explode again? Noah smith argues not, citing the biggest change of the past decade: Green energy costs have dropped dramatically. It means impatient investors won’t have to wait that long for profits, and the government will not have to provide so much scaffolding – although perhaps should; Solyndra was just an exaggerated failure of a successful program. If the pre-Solyndra boom was the clean tech version of the dot-com bubble, then maybe the current hype phase is more mature and enduring, suggests Noah.

Investors can still get burned when so much hot money is flowing. This Nikola truck rolling the descent should still be fresh in everyone’s memories. More recently, accounting issues have rocked the shares of hydrogen fuel cell maker Plug Power and electric vehicle maker Lordstown Engines, Notes Chris bryant. No whistling robot was involved, but such scandals could make investors suspicious once again, at a time when green power really needs all the money it can get.

The Fed will just spin this car if you don’t drop it

There was a Fed meeting yesterday, and that noise you don’t hear is the blissful silence of a market realizing that this central bank doesn’t respond to tantrums. Jay Powell & Co. clarified that no matter how much bond traders raise interest rates, the Fed won’t play until it sees hard evidence of real inflation, writes Brian Chappatta. It was a pleasant surprise for a Stock market braces for Fed to be more hawkish, writes John authers. But it will continue to become more difficult for the Fed to balance its perma-accommodating position against constantly improving economic data, writes Mohamed El-Erian. All a fiscal stimulus about to hit the economy will only make it harder, writes Bloomberg Editorial Board. Of course, the Fed has been asking for tax help for a long time. Is this an example of being careful with what you want?

Bonus editorials:

Stories of vaccine failure

Israel, the UK, and the US are widely regarded as the world leaders when it comes to getting Covid vaccinated in people’s arms. Less well-known is the UAE, which only follows Israel in terms of vaccinations per capita. Even less well known, and perhaps more surprising, is the third best country in the world, which you can see if you squint or click on the following JPG:

relates to the rose of the green boom today led by Tesla from the ashes of Solyndra

That’s right, it’s Chile. It’s a shock because the rest of Latin America has been an absolute disaster in vaccine management, writes Mac Margolis. Poor leadership, hesitation about vaccines, nationalism – you name a vaccination barrier, and Latin America has understood that, and not just Brazil. Among regional leaders, only Chilean President Sebastian Pinera had the means to align vaccine sources around the world. The reward for his country will not only be a healthy population, but also a stronger economy.

Europe is not on this graph, but does not do much better than the lagging Brazil. As you stepped into this pandemic, you might have expected the continent to be a world leader in vaccinating people. But Lionel laurent writes his strange mixture of technocracy and populism are exactly the wrong cocktail for this company, causing too much indecision and too few shots.

Revealing graphics

If you have young children, there’s a good chance they’re playing Roblox right now, which helps your sanity and Roblox’s bottom line. But we all have to consider how the business the business model runs the risk of creating a new generation of screen junkies, warns David fickling.

Locked

At least European countries can borrow money at low rates, Marcus Ashworth Notes, including even Greece.

Resist bad weather well

Further reading

Amazon is one of the most profitable companies in the world, making Jeff Bezos one of the richest men in the world, while U.S. taxpayers help cover basic living expenses of several of its employees. – Nir Kaissar and Tim o’brien

Roaring Kitty and Warren Buffett have more in common than you might think. – Tae Kim

Goldman analysts are angry for working too hard. – Matt Levine

Two bailouts in 12 years clearly show that we need to reform monetary funds. – Timothy massad

Biden needs his own culture war, like FDR and Ronald Reagan won. – Pankaj mishra

Biden must do Asian Americans are neither foreigners nor enemies. – Noah smith

ICYMI

United States achieved Biden’s vaccination goal six weeks earlier.

Goldman is looking for volunteers to move to West Palm Beach.

Vladimir Putin deploys “I know you are, but what am I? »Defense against Biden.

Kickers

Just look at the havoc you make when you walk looking at your phone. (h / t Ellen kominers)

Primordial lightning may have triggered life on Earth.

Maybe Oumuamua was not a cigar but a cookie.




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FIRST KEY STONE: MANAGEMENT REPORT AND ANALYSIS OF THE FINANCIAL POSITION AND OPERATING RESULTS (Form 10-K) https://utahbbq.org/first-key-stone-management-report-and-analysis-of-the-financial-position-and-operating-results-form-10-k/ Fri, 19 Mar 2021 08:43:46 +0000 https://utahbbq.org/first-key-stone-management-report-and-analysis-of-the-financial-position-and-operating-results-form-10-k/
The purpose of Management's Discussion and Analysis of First Keystone
Corporation, a bank holding company (the "Corporation"), and its wholly owned
subsidiary, First Keystone Community Bank (the "Bank"), is to assist the reader
in reviewing the financial information presented and should be read in
conjunction with the consolidated financial statements and other financial data
contained herein. Refer to Forward-Looking Statements on page 1 for detailed
information.

                                       24

  Table of Contents

RESULTS OF OPERATIONS

End of year December 31, 2020 Compared to the year ended December 31, 2019

Net income increased to $11,837,000 for the year ended December 31, 2020, as
compared to $10,227,000 for the prior year, an increase of 15.7%. Earnings per
share, both basic and diluted, for 2020 was $2.03 as compared to $1.77 in 2019,
an increase of 14.7%. Dividends per share for 2020 and 2019 were $1.08. The
Corporation's return on average assets was 1.09% in 2020 and 1.02% in 2019.
Return on average equity increased to 8.61% in 2020 from 8.17% in 2019. Total
interest income in 2020 amounted to $39,567,000, an increase of $1,040,000 or
2.7% from 2019. The increase in interest income reflects $610,000 in servicing
fees earned from the SBA related to the origination of PPP loans throughout
2020. Total interest expense of $6,360,000 decreased $3,883,000 or 37.9% from
2019. The majority of this decrease related to a decrease in interest paid on
deposits and short-term borrowings in 2020.

Net interest income, as indicated below in Table 1, increased by $4,923,000 or
17.4% to $33,207,000 for the year ended December 31, 2020. The Corporation's net
interest income on a fully tax equivalent basis increased by $4,761,000, or
15.8% to $34,866,000 in 2020 as compared to $30,105,000 in 2019.

Table 1 – Reconciliation of taxable equivalent net interest income

(Dollars in thousands)




                                                               2020/2019
                                                          Increase/(Decrease)
                                                2020       Amount        %         2019
Interest Income                               $ 39,567$   1,040       2.7    $ 38,527
Interest Expense                                 6,360      (3,883)    (37.9)      10,243
Net Interest Income                             33,207        4,923      17.4      28,284
Tax Equivalent Adjustment                        1,659        (162)

(8.9) 1,821 Net interest income (fully tax equivalent) $ 34,866$ 4,761 15.8 $ 30,105


                                       25

  Table of Contents

Table 2 – Average Balances, Rates and Interest Income and Expenses

(Dollars in thousands)


                                                    2020                                2019
                                        Average                 Yield/      Average                 Yield/
                                        Balance     Interest     Rate       Balance     Interest     Rate
Interest Earning Assets:
Loans:
Commercial, net1,2,4                  $    97,418$   3,096     3.18 %  $    90,706$   3,707     4.09 %
Real Estate1,2                            581,404      26,590     4.57 %      525,169      24,727     4.71 %
Consumer, net1,4                            5,310         440     8.30 %        5,723         497     8.68 %
Fees on cash loans                                   -       1,554        - %            -         782        - %
Total Loans5                              684,132      31,680     4.63 %      621,598      29,713     4.78 %

Securities:
Taxable                                   205,236       4,792     2.33 %      192,044       5,338     2.78 %
Tax-Exempt1,3                             103,696       4,528     4.37 %      108,464       4,763     4.39 %
Total Investment Securities               308,932       9,320     3.02 %      300,508      10,101     3.36 %
Restricted Investment in Bank
Stocks                                      3,605         210     5.84 %        6,302         496     7.87 %
Interest-Bearing Deposits in Other
Banks                                      10,508          16     0.15 %        3,005          38     1.26 %
Total Other Interest Earning
Assets                                     14,113         226     1.61 %        9,307         534     5.74 %
Total Interest Earning Assets           1,007,177      41,226     4.09 %

931 413 40 348 4.33%

Non-Interest Earning Assets:
Cash and Due From Banks                     8,292                               8,364
Allowance for Loan Losses                 (7,330)                             (6,816)
Premises and Equipment                     20,309                              21,215
Other Assets                               52,550                              53,385
Total Non-Interest Earning Assets          73,821
   76,148
Total Assets                          $ 1,080,998$ 1,007,561


Interest Bearing Liabilities:
Savings, NOW, Money Markets and
Interest Checking                     $   452,323$   1,717     0.38 %  $   370,303$   2,764     0.75 %
Time Deposits                             206,566       3,229     1.56 %      213,437       3,887     1.82 %
Securities Sold U/A to Repurchase          18,350         105     0.58 %
   15,632         161     1.03 %
Short-Term Borrowings                      25,396         254     1.00 %       96,377       2,494     2.59 %
Long-Term Borrowings                       50,587         991     1.96 %       45,370         937     2.07 %
Subordinated Debentures                     1,458          64     4.37 %            -           -        - %

Total interest-bearing liabilities 754,680 6,360 0.84%

741 119 10 243 1.38%

Non-Interest Bearing Liabilities:
Demand Deposits                           177,691                             133,835
Other Liabilities                          11,172                               7,463
Stockholders' Equity                      137,455                             125,144
Total Liabilities/Stockholders'
Equity                                $ 1,080,998                         $

1,007,561

Net Interest Income Tax Equivalent                  $  34,866
            $  30,105

Net Interest Spread                                               3.25 %                              2.95 %

Net Interest Margin                                               3.46 %                              3.23 %

1 Tax exempt income has been adjusted on a tax equivalence basis using a progressive rate of 21% and the rejection of statutory interest expense.

2 Includes tax equivalent adjustments on non-taxable municipal loans of $ 150,000 and
$ 269,000 for the years 2020 and 2019, respectively.

3 Includes tax equivalence adjustments on non-taxable municipal titles
$ 1,509,000 and $ 1,552,000 for the years 2020 and 2019, respectively.

4 Installment loans are shown net of unearned interest.

5Average loan balances include non-accrual loans. Interest income on non-accrual
loans is not included.



                                       26

  Table of Contents

NET INTEREST INCOME

The major source of operating income for the Corporation is net interest income.
Net interest income is the difference between interest income on earning assets,
such as loans and securities, and the interest expense on liabilities used to
fund those assets, including deposits and other borrowings. The amount of
interest income is dependent upon both the volume of earning assets and the
level of interest rates. In addition, the volume of non-performing loans affects
interest income. The amount of interest expense varies with the amount of funds
needed to support earning assets, interest rates paid on deposits and borrowed
funds, and finally, the level of interest free deposits.

Table 2 on the preceding page provides a summary of average outstanding balances
of earning assets and interest bearing liabilities with the associated interest
income and interest expense as well as average tax equivalent rates earned and
paid as of year-end 2020 and 2019.

The yield on earning assets was 4.09% in 2020 and 4.33% in 2019. The rate paid
on interest bearing liabilities was 0.84% in 2020 and 1.38% in 2019. This
resulted in an increase in our net interest spread to 3.25% in 2020, as compared
to 2.95% in 2019.

As Table 2 illustrates, net interest margin, which is interest income less
interest expense divided by average earning assets was 3.46% in 2020 as compared
to 3.23% in 2019. Net interest margins are presented on a tax-equivalent basis.
In 2020, the yield on earning assets decreased by 0.24% and the rate paid on
interest bearing liabilities decreased by 0.54%. Yields decreased across all
segments of interest earning assets and interest bearing liabilities during
2020, mainly as a result of the current low interest rate environment
precipitated by rate cuts that occurred in 2020 as a result of the COVID-19
pandemic. The yield on loans decreased from 4.78% in 2019 to 4.63% in 2020
mainly due to loans repaid or refinanced that were reinvested at lower interest
rates, as well as the Bank's origination of SBA Paycheck Protection Program
loans that have interest rates of 1.00%. The securities portfolio yield
decreased to 3.02% in 2020 as compared to 3.36% in 2019. The decrease was mainly
the result of reduced yield on taxable securities which declined from 2.78% in
2019 to 2.33% in 2020 due to maturities, calls, and sales of investment
securities that were reinvested at lower rates. The average rate paid on
short-term borrowings decreased 1.59% from 2.59% in 2019 to 1.00% in 2020. The
rate paid on savings, NOW, money market, and interest checking accounts
decreased 0.37% from 0.75% to 0.38% and the average rate paid on time deposits
decreased 0.26% from 1.82% to 1.56%. Interest income exempt from federal tax was
$3,319,000 in 2020 and $3,766,000 in 2019. Interest income exempt from federal
tax decreased due to the sales and calls of tax-exempt securities and payoffs of
tax-exempt loans. Tax-exempt income has been adjusted to a tax-equivalent basis
using an incremental rate of 21%.

The increase in net interest margin at December 31, 2020 compared to December
31, 2019 was primarily due to decreased yields on interest bearing liabilities
resulting in lower interest expense in 2020, as compared to 2019. Fully tax
equivalent net interest income increased by $4,761,000 or 15.8% to $34,866,000
at December 31, 2020 compared to $30,105,000 at December 31, 2019. Throughout
2020, the Federal Reserve decreased the federal-funds rate by 1.5%, resulting in
a target range of 0.00% - 0.25%. The Corporation could experience a decrease in
net interest income if market rates remain static or continue to decline, as the
Corporation's net interest income continues to be liability sensitive. To negate
the potential impact of a decreasing net interest margin, the Corporation will
continue to focus on attracting lower cost core deposits such as checking,
savings, and money market accounts, thereby further reducing its dependence on
higher priced certificates of deposit and short-term borrowings. The Corporation
is actively monitoring and restructuring its portfolios to become more asset
sensitive, which will allow for better performance in a static or rates-down
environment. The Corporation will continue to evaluate the potential impact of
short-term rate fluctuations in 2021, as well as the slope and position of the
yield curve.

Table 3 sets forth changes in interest income and interest expense for the
periods indicated for each category of interest earning assets and interest
bearing liabilities. Information is provided on changes attributable to (i)
changes in volume (changes in average volume multiplied by prior rate); (ii)
changes in rate (changes in average rate multiplied by prior average volume);
and, (iii) changes in rate and volume (changes in average volume multiplied by
change in average rate).

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In 2020, the increase in net interest income on a fully tax equivalent basis of
$4,761,000 resulted from an increase in volume of $4,244,000 and an increase of
$517,000 due to changes in rate.

Table 3 – Flow / volume analysis

(Dollars in thousands)




                                               2020 COMPARED TO 2019
                                         VOLUME        RATE          NET
Interest Income:
Loans, Net                              $   2,989$ (1,022)$   1,967
Taxable Securities                            367        (913)        (546)
Tax-Exempt Securities                       (209)         (26)        (235)

Restricted investment in Bank shares (212) (74) (286) Other

                                          95        (117)         (22)
Total Interest Income                   $   3,030$ (2,152)$     878

Savings on Interest Fees, NOW and Money Markets $ 612($ 1,659)($ 1,047)
On-time deposits

                               (125)        (533)        (658)
Securities Sold U/A to Repurchase              28         (84)         (56)
Short-Term Borrowings                     (1,837)        (403)      (2,240)
Long-Term Borrowings                          108         (54)           54
Subordinated Debentures                         -           64           64
Total Interest Expense                    (1,214)      (2,669)      (3,883)
Net Interest Income                     $   4,244$     517$   4,761
The change in interest due to both volume and yield/rate has been allocated to
change due to volume and change due to yield/rate in proportion to the absolute
value of the change in each. Balances on non-accrual loans are included for
computational purposes. Interest income on non-accrual loans is not included.

PROVISION FOR LOAN LOSSES

For the year ended December 31, 2020, the provision for loan losses was
$1,200,000 as compared to $450,000 for the year ended December 31, 2019. The
increase in the provision for loan losses in 2020 as compared to 2019 resulted
from the Corporation's analysis of the current loan portfolio, including
historic losses, past-due trends, current economic conditions, loan portfolio
growth, and other relevant factors. The provision for loan losses for the year
ended December 31, 2020 is also reflective of management's assessment of the
increased risk associated with the economic uncertainty surrounding the COVID-19
pandemic. Charge-off and recovery activity in the allowance for loan losses
resulted in net charge-offs of $272,000 and $190,000 for the years ended
December 31, 2020 and 2019, respectively. See Allowance for Loan Losses on page
36 for further discussion.

Gross charge-offs amounted to $301,000 at December 31, 2020, as compared to
$204,000 at December 31, 2019. The increased level of charge-offs for the year
ended December 31, 2020 was mainly due to one charge-off totaling $86,000
completed during the fourth quarter of 2020 on a non-accrual loan to a student
housing holding company. The charge-off was completed to charge the loan balance
down to the net realizable value of the supporting collateral less cost to sell,
as the underlying value of the collateral was deemed to be insufficient to cover
the loan balance. This charge-off contributed to the increased balance of net
charge-offs in 2020 vs. 2019, but was not indicative of a significant change in
asset quality in the overall loan portfolio. See Table 10 - Analysis of
Allowance for Loan Losses for further details.

The allowance for loan losses as a percentage of average outstanding loans was 1.16% as of December 31, 2020 and 1.13% from December 31, 2019.

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On a quarterly basis, management performs, and the Corporation's Audit Committee
and the Board of Directors review a detailed analysis of the adequacy of the
allowance for loan losses. This analysis includes an evaluation of credit risk
concentration, delinquency trends, past loss experience, current economic
conditions, composition of the loan portfolio, classified loans and other
relevant factors.

The Corporation will continue to monitor its allowance for loan losses and make
future adjustments to the allowance through the provision for loan losses as
conditions warrant. Although the Corporation believes that the allowance for
loan losses is adequate to provide for losses inherent in the loan portfolio,
there can be no assurance that future losses will not exceed the estimated
amounts or that additional provisions will not be required in the future.

The Corporation is subject to periodic regulatory examination by the
Pennsylvania Department of Banking and Securities and the FDIC. As part of the
examination, the regulators will assess the adequacy of the Corporation's
allowance for loan losses and may include factors not considered by the
Corporation. In the event that a regulatory examination results in a conclusion
that the Corporation's allowance for loan losses is not adequate, the
Corporation may be required to increase its provision for loan losses.

INCOME WITHOUT INTEREST

Non-interest income is derived primarily from service charges and fees, ATM and
debit card income, trust department revenue, income on bank owned life
insurance, gains on sales of mortgage loans and other miscellaneous income. In
addition, net securities gains and losses also impact total non-interest income.
Table 4 provides the yearly non-interest income by category, along with the
amount, dollar changes, and percentage of change.

Non-interest income through December 31, 2020 was $6,012,000, a decrease of
13.2%, or $917,000, from 2019. The decrease was due primarily to a decrease in
net securities gains and a decrease in service charges and fees. Table 4
provides the major categories of non-interest income and each respective change
comparing the last two years.

During 2020, net securities gains decreased $969,000 to a net loss of $(58,000).
The decrease was due to the Corporation recognizing $287,000 in net losses on
held equity securities in 2020, as compared to recognizing $373,000 in net gains
on held equity securities in 2019. The Corporation also recognized $309,000 less
in net gains on the sales of debt securities during 2020 as compared to 2019.

Gains on sales of mortgage loans provided income of $604,000 in 2020 as compared
to $277,000 in 2019. The increase in gains on sales of mortgage loans in 2020
was due to more mortgage loans being sold and higher average gains on individual
mortgage loan sales in 2020 as compared to 2019. In 2020, the Corporation
originated $44,485,000 in residential mortgage loans, of which $30,480,000 were
originated with the intent to sell. This compared favorably to 2019 when the
Corporation originated $25,592,000 in residential mortgage loans, of which
$12,447,000 were originated with the intent to sell. The Corporation continues
to service the majority of mortgages which are sold. This servicing income
provides an additional source of non-interest income on an ongoing basis.

Service charges and fees decreased by $531,000 or 23.9% in 2020 as compared to
2019. The decrease was mainly due to fewer customers in overdraft status and
lower fees earned on deposit accounts, as overdraft fees and several other
deposit account service charges were waived during the second quarter of 2020
due to the COVID-19 pandemic. In addition, there were fewer prepayment penalties
earned on commercial loan payoffs during 2020. ATM fees and debit card income
increased by $199,000 or 12.1% in 2020 as compared to 2019 due to an increase in
transaction volume.

Other income, consisting mainly of the rental of safes, income from the sale of investment products without deposit and miscellaneous expenses, increased
$ 42,000, i.e. 15.2% in 2020 compared to 2019.

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Table 4 - Non-Interest Income


(Dollars in thousands)                             2020/2019
                                              Increase/(Decrease)
                                     2020      Amount       %          2019
Trust department                    $   995$    24      2.5      $   971
Service charges and fees              1,693      (531)    (23.9)       2,224

Life insurance income held by a bank 611 (9) (1.5) 620 ATM and debit card income

             1,849        199     12.1

1,650

Gains on sales of mortgage loans        604        327     118.1         277
Other                                   318         42     15.2          276
Subtotal                              6,070         52      0.9        6,018
Net securities (losses) gains          (58)      (969)    (106.4)        911
Total                               $ 6,012$ (917)    (13.2)     $ 6,929




NON-INTEREST EXPENSE

Total non-interest expense amounted to $24,605,000, an increase of $1,183,000,
or 5.1% in 2020. Expenses associated with employees (salaries and employee
benefits) continue to be the largest non-interest expenditure. Salaries and
employee benefits amounted to $13,687,000 or 55.6% of total non-interest expense
in 2020 and $12,457,000 or 53.2% in 2019. Salaries and employee benefits
increased $1,230,000, or 9.9% in 2020. The increase in 2020 was due to an
increase in commissions associated with loan growth and retail non-deposit
activity, bonuses paid to all employees for working through the COVID-19
pandemic and increased healthcare costs. The Corporation experienced a 30.0%
increase in healthcare costs for its employees in 2020 as compared to 2019. The
number of full time equivalent employees was 195 as of December 31, 2020 and 196
as of December 31, 2019.

Net occupancy expense increased $190,000, or 10.4% in 2020 as compared to 2019,
mainly due to an increase in rent expense associated with the new leasing
standard. Net furniture and equipment and computer expense decreased $109,000,
or 6.5% in 2020 compared to 2019. The decrease in 2020 was due to several
software items fully depreciating in 2019 which were still being utilized
throughout 2020.

Professional services increased $49,000, or 5.3% in 2020 as compared to 2019.
The higher expense in 2020 was the result of higher legal fees related to the
issuance of subordinated debt and additional consulting and accounting fees
related to the review of the Corporation's goodwill.

Pennsylvania shares tax expense increased $101,000, or 13.2% in 2020 as compared
to 2019. The increase was the result of an increase in total equity. FDIC
insurance expense increased $31,000, or 22.6% in 2020 as compared to 2019. This
increase was due to small bank assessment credits received from the FDIC
effectively reducing the expense in 2019. FDIC insurance expense varies with
changes in net asset size, risk ratings, and FDIC derived assessment rates.

ATM and debit card fees expense increased $14,000, or 1.6% in 2020 as compared
to 2019. Data processing fees increased $55,000, or 5.0% in 2020 as compared to
2019 as the result of annual contracted pricing increases from our main
third-party data processor.

Foreclosed assets held for resale expense amounted to $50,000 in 2020 as
compared to $295,000 in 2019, a decrease of $245,000, or 83.1%. The Corporation
incurred costs associated with the maintenance and sales of four foreclosed
properties in 2020 and nine foreclosed properties in 2019. The majority of the
decrease was the result of a write down to the agreed upon lead bank repurchase
price of a foreclosed asset in 2019.

Advertising expense decreased $259,000, or 42.3% in 2020 as compared to 2019.
The decrease was due to a less aggressive advertising approach in 2020 due to
the COVID-19 pandemic, as 2020 saw less newspaper, billboard, digital and civic
advertising. Advertising for 2020 was geared mostly towards social media and
keeping customers informed and educated on the events created due to COVID-19.
This advertising was significantly less expensive than

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the Bank's traditional campaign driven messages. Civic advertising was affected
by the COVID-19 pandemic as many events that the Bank would normally sponsor
were canceled.

Other non-interest expense increased $126,000, or 4.6% in 2020 as compared to
2019. The increase in 2020 was primarily due to higher promotional expenses for
free appraisals given by the Bank.

The overall level of non-interest expense remains low, relative to the
Corporation's peers (community banks from $500 million to $1 billion in assets).
The Corporation's total non-interest expense was 2.28% of average assets in 2020
and 2.33% in 2019, which places the Corporation among the leaders in its peer
financial institution categories in controlling non-interest expense.

Table 5 – Non-interest charges

(Dollars in thousands)                               2020/2019
                                                Increase/(Decrease)
                                       2020      Amount       %         2019
Salaries and employee benefits       $ 13,687$ 1,230       9.9    $ 12,457
Occupancy, net                          2,009        190      10.4       1,819
Furniture and equipment                   590         16       2.8         574
Computer expense                          990      (125)    (11.2)       1,115
Professional services                     981         49       5.3         932
Pennsylvania shares tax                   867        101      13.2         766
FDIC Insurance                            168         31      22.6         137
ATM and debit card fees                   906         14       1.6         892
Data processing fees                    1,166         55       5.0       1,111
Foreclosed assets held for resale          50      (245)    (83.1)         295
Advertising                               354      (259)    (42.3)         613
Other                                   2,837        126       4.6       2,711
Total                                $ 24,605$ 1,183       5.1    $ 23,422




INCOME TAX EXPENSE

Income tax expense for the year ended December 31, 2020, has been $ 1,577,000 compared to $ 1,114,000 for the year ended December 31, 2019. The effective tax rate was 11.8% in 2020 and 9.8% in 2019. The increase in the effective tax rate for 2020 was due to a net decrease in tax-exempt investments and loans to individuals. state and local government, plus operating income.

FINANCIAL CONDITION

GENERAL

Total assets increased to $ 1,179,047,000 at the end of 2020, an increase of 17.1% compared to the end of 2019.

Increase in total debt securities available for sale $ 88,783,000 or 31.9% to
$ 366,711,000 from December 31, 2020.

Net loans increased in 2020 from $640,727,000 to $712,677,000, an 11.2%
increase. Loan demand grew in 2020 as the Bank has realized an increase in loan
originations, primarily in the commercial real estate and commercial and
industrial portfolios. The increase was partially due to the origination of PPP
loans, which carried a balance of $22,976,000 at December 31, 2020.

Interest receivable increased $1,139,000 or 33.5% to $4,544,000 as of December
31, 2020. This increase was mainly due to the full payment deferrals of several
loans that were modified in response to the COVID-19 pandemic under Section 4013
of the CARES act, plus the impact of growth in the loan portfolio.

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The cash surrender value of bank owned life insurance totaled $24,194,000 at
December 31, 2020, an increase of $611,000 or 2.6% from 2019. This increase
represents tax-free income included in non-interest income on the consolidated
statements of income.

Investments in low-income housing partnerships were $1,466,000 at year-end 2020,
a decrease of 19.8% from year-end 2019. The Corporation became a limited partner
in a new real estate venture during 2015 with an initial investment of $590,000,
a second installment of $1,178,000 in 2016, third and fourth installments in
2017 of $168,000 and $84,000, respectively, and a fifth and final installment of
$85,000 in 2019.  Investing in low-income housing real estate ventures enables
the Corporation to recognize tax credits and satisfy Community Reinvestment Act
initiatives.

As of December 31, 2020, total deposits amounted to $937,488,000, an increase of
23.1% from 2019. The increase in 2020 was due to many different factors
including the deposit of stimulus funds via check or ACH, the deposit of PPP
loan proceeds, less consumer spending, an $83,000,000 increase in highly rate
sensitive deposits and other normal fluctuations. Core deposits, which include
demand deposits and interest bearing demand deposits (NOWs), money market
accounts, savings accounts, and time deposits of individuals, continue to be the
Corporation's most significant source of funds.

The Corporation continues to maintain and manage its asset growth. The
Corporation's strong equity capital position provides an opportunity to further
leverage its asset growth. Short and long-term borrowings decreased in 2020 by
$45,169,000, mainly due to increased deposit balances.

The company issued 25,000,000 USD in subordinated debentures in the fourth quarter of 2020.

Total equity increased to $ 144,242,000 at December 31, 2020, an augmentation of $ 15,490,000, primarily due to an increase in accumulated other comprehensive income and retained earnings.

SECTOR REPORTS

Currently, management measures performance and allocates the resources of the company as a single area.

EARN ASSETS

Earning assets are defined as those assets that produce interest income. By
maintaining a healthy asset utilization rate, i.e., the volume of earning assets
as a percentage of total assets, the Corporation maximizes income. The earning
asset ratio (average interest earning assets divided by average total assets)
equaled 93.2% for 2020 compared to 92.4% for 2019. This indicates that the
management of earning assets is a priority and non-earning assets, primarily
cash and due from banks, fixed assets and other assets, are maintained at
minimal levels. The primary earning assets are loans and investment securities.

SECURITIES

The company uses securities not only to generate interest and dividend income, but also to help manage interest rate risk and to provide liquidity to meet operating cash requirements.

The securities portfolio consists of debt securities available-for-sale. No
securities were established in a trading account. Debt securities
available-for-sale increased $88,783,000 or 31.9% to $366,711,000 in 2020. At
December 31, 2020, the net unrealized gain, net of the tax effect, on these
securities was $12,870,000 and was included in stockholders' equity as
accumulated other comprehensive income. Table 6 provides data on the fair value
of the Corporation's securities portfolio on the dates indicated. The vast
majority of security purchases are allocated as available-for-sale. This
provides the Corporation with increased flexibility should there be a need or
desire to liquidate a security.

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The securities portfolio includes, U.S. treasuries, U.S. government corporations
and agencies, corporate debt obligations, mortgage-backed securities, asset
backed securities, and obligations of state and political subdivisions, both
tax-exempt and taxable.

Debt securities available-for-sale may be sold as part of the overall asset and
liability management process. Realized gains and losses are reflected in the
results of operations on the Corporation's Consolidated Statements of Income. As
of December 31, 2020, the securities portfolio does not contain any off-balance
sheet derivatives or trust preferred investments.

Table 6 - Securities


(Dollars in thousands)                                             Available-For-Sale
                                                        December 31, 2020      December 31, 2019
U.S. Treasury securities                               $                 -    $             2,855
U. S. Government corporations and agencies                          88,003                 87,580
Other mortgage backed debt securities                               39,844                 11,138
Obligations of state and political subdivisions                    165,101
              120,376
Asset backed securities                                             44,821                 37,536
Corporate debt securities                                           28,942                 18,443
Total                                                  $           366,711    $           277,928




The amortized cost and fair value of securities, by contractual maturity, are
shown below at December 31, 2020. Expected maturities will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.

Table 7 – Maturity table of securities

(Dollars in thousands)

December 31, 2020

                                                                      Debt

Titles available for sale

                                                         U.S. Government         Other         Obligations
                                                         Corporations &        Mortgage         of State          Asset         Corporate
                                      U.S. Treasury         Agencies          Backed Debt      & Political        Backed          Debt
                                       Securities         Obligations1        Securities1     Subdivisions      Securities     Securities
Within 1 Year:
Amortized cost                       $             -    $               -    $           -    $       2,192    $          -    $     2,631
Fair value                                         -                    -                -            2,213               -          2,636

1 - 5 Years:
Amortized cost                                     -                  622            2,199           23,512           1,113         15,642
Fair value                                         -                  629            2,213           24,722           1,113         16,051

5 - 10 Years:
Amortized cost                                     -               20,768            5,729           17,875           2,575         10,250
Fair value                                         -               20,715            5,740           19,361           2,624         10,255

After 10 Years:
Amortized cost                                     -               65,414           31,492          107,343          41,063              -
Fair value                                         -               66,659           31,891          118,805          41,084              -

Total:
Amortized cost                       $             -    $          86,804    $      39,420$     150,922$     44,751$    28,523
Fair value                                         -               88,003           39,844          165,101          44,821         28,942

1 Mortgage-backed securities are classified for maturity reporting purposes on their original maturity date.

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Marketable equity securities consist of common stock investments in other
commercial banks and bank holding companies. At December 31, 2020 and 2019, the
Corporation had $1,646,000 and $1,933,000, respectively, in equity securities
recorded at fair value, a decrease of $287,000 or 14.8%.

LOANS

Total loans increased to $720,610,000 as of December 31, 2020, as compared to a
balance of $647,732,000 as of December 31, 2019. Table 8 provides data relating
to the composition of the Corporation's loan portfolio on the dates indicated.
Total loans increased $72,878,000, or 11.3% in 2020 compared to an increase of
$41,340,000, or 6.8% in 2019.

Steady demand for borrowing by businesses (including loans issued through the
Bank's participation in the SBA's Paycheck Protection Program) accounted for the
11.3% increase in the loan portfolio from December 31, 2019 to December 31,
2020. Overall, the Commercial and Industrial portfolio (which includes tax-free
Commercial and Industrial loans) increased 6.0% or $5,163,000 to $91,875,000 at
December 31, 2020 compared to $86,712,000 at December 31, 2019. The increase in
the Commercial and Industrial portfolio was mainly attributable to originations
of Paycheck Protection Program loans which amounted to $22,976,000 as of
December 31, 2020. The portion of the Commercial and Industrial portfolio not
attributable to the Paycheck Protection Program loans decreased $17,813,000
during the year ended December 31, 2020. The decrease was mainly attributable to
$11,102,000 in new loan originations offset by a $5,522,000 decrease in
utilization of existing Commercial and Industrial lines of credit and loan
payoffs of $17,965,000, as well as regular principal payments and other typical
fluctuations in the Commercial and Industrial portfolio. The Commercial Real
Estate portfolio (which includes tax-free Commercial Real Estate loans)
increased 17.9% or $70,927,000 to $466,728,000 at December 31, 2020 compared to
$395,801,000 at December 31, 2019. The increase was mainly the result of
$117,952,000 in new loan originations net against a $2,067,000 decrease in
utilization of existing Commercial Real Estate lines of credit and $38,793,000
in loan payoffs, in addition to regular principal payments and other typical
amortization in the Commercial Real Estate portfolio. Residential Real Estate
loans decreased 1.5% or $2,367,000 to $156,983,000 at December 31, 2020 compared
to $159,350,000 at December 31, 2019. The decrease was the result of $33,481,000
in new loan originations and a $206,000 increase in utilization of existing
Residential Real Estate (Home Equity) lines of credit, offset by loan payoffs of
$24,784,000, net loans sold of $7,019,000 and regular principal payments and
other typical amortization in the Residential Real Estate portfolio. Net loans
sold for the year ended December 31, 2020 consisted of total loans sold during
the year ended December 31, 2020 of $14,760,000, offset with loans opened and
sold in the same quarter during each quarter of 2020 which amounted to
$7,741,000. The Corporation continues to originate and sell certain long-term
fixed rate residential mortgage loans which conform to secondary market
requirements. The Corporation derives ongoing income from the servicing of
mortgages sold in the secondary market. The Corporation continues its efforts to
lend to creditworthy borrowers.

Management believes that the loan portfolio is well diversified. The total
commercial portfolio was $558,603,000 at December 31, 2020. Of total loans,
$466,728,000 or 64.8% were secured by commercial real estate, primarily lessors
of residential buildings and dwellings and lessors of non-residential buildings.
The Corporation continues to monitor these portfolios.

All loan relationships exceeding 1,500,000 USD are reviewed internally and / or externally as part of a loan review process on an annual basis. This review is based on the analysis of the current financial statements of the borrower, co-borrowers / guarantors, payment history and economic conditions.

Overall, the portfolio risk profile as measured by loan grade is considered low
risk, as $695,657,000 or 96.7% of gross loans are graded Pass; $1,039,000 or
0.1% are graded Special Mention; $23,098,000 or 3.2% are graded Substandard; and
$0 are graded Doubtful. The rating is intended to represent the best assessment
of risk available at a given point in time, based upon a review of the
borrower's financial statements, credit analysis, payment history with the Bank,
credit history and lender knowledge of the borrower. See Note 4 - Loans and
Allowance for Loan Losses for risk grading tables.

Overall, non-pass scores increased to $ 24,137,000 at December 31, 2020, compared to $ 14,887,000 at December 31, 2019. Commercial and industrial failure scores have been reduced to $ 919,000 from December 31, 2020,

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compared to $1,070,000 as of December 31, 2019. Commercial Real Estate non-pass
grades increased to $21,789,000 as of December 31, 2020 as compared to
$12,534,000 as of December 31, 2019. Residential Real Estate and Consumer
non-pass grades increased to $1,429,000 as of December 31, 2020, as compared to
$1,283,000 as of December 31, 2019.

The increase in the Commercial Real Estate non-pass grade portfolio during the
year ended December 31, 2020 was mainly due to the downgrade of various large
loans/loan relationships to Special Mention or Substandard during the year. One
Commercial Real Estate loan to a real estate developer that carried a balance of
$814,000 as of December 31, 2020 was downgraded to Special Mention during the
third quarter of 2020, as the borrower was unable to pay off the loan or
refinance through another institution at maturity; the Bank has agreed to extend
the maturity date of the loan for one year in conjunction with a principal
paydown that was financed by partial release of the mortgaged premises. One
Commercial Real Estate loan to the owner/operator of a hotel that carried a
balance of $9,423,000 as of December 31, 2020 was downgraded to Special Mention
during the third quarter of 2020 and subsequently downgraded to Substandard
during the fourth quarter of 2020, as occupancy levels have been adversely
impacted by the COVID-19 coronavirus pandemic, but the business remains
operational. Four Commercial Real Estate loans to the owners/operators of an
indoor family entertainment complex that carried a balance of $792,000 as of
December 31, 2020 were downgraded to Special Mention during the third quarter of
2020 and subsequently downgraded to Substandard during the fourth quarter of
2020, as the business was adversely impacted by the COVID-19 coronavirus
pandemic. Net against the large additions to Special Mention and Substandard
status, there was also one Commercial Real Estate loan to the owner of a
recreation facility that was classified as Substandard and carried a balance of
$2,640,000 as of December 31, 2019 which was paid off during the second quarter
of 2020.

The Company continues to internally guarantee each of its loans in order to comply with prescribed policies and approval levels established by its Board of Directors.

The categories of the Company’s loan portfolio, net of unearned discount and net deferred loan fees and charges, are summarized in Table 8.

Table 8 - Loans


(Dollars in thousands)                               December 31,
                               2020         2019         2018         2017         2016
Commercial and Industrial    $  91,875$  86,712$  92,220$  99,337$  83,573
Commercial Real Estate         466,728      395,801      348,476      290,970      263,519
Residential Real Estate        156,983      159,350      159,741      162,925      169,035
Consumer                         5,024        5,869        5,955        6,165        6,255
Total Loans                  $ 720,610$ 647,732$ 606,392$ 559,397$ 522,382

Information regarding the Company’s maturity and rate sensitivity relating to the loan portfolio is summarized in Table 9.

Table 9 – Loan maturity and interest sensitivity

Loans by maturity

                                                   December 31, 2020
(Dollars in thousands)       One Year        After One Year          After
                             and Less      Through Five Years      Five Years       Total
Commercial and Industrial    $  24,631    $             37,513    $     29,731$  91,875
Commercial Real Estate          32,851                 111,213         322,664      466,728
Residential Real Estate         25,749                  33,768          97,466      156,983
Consumer                         1,640                   2,800             584        5,024
Total                        $  84,871    $            185,294    $    450,445$ 720,610


The above data represents the amount of loans receivable at December 31, 2020
which, based on remaining scheduled repayments of principal, are due in the
periods indicated.






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  Table of Contents

Loans by Repricing
                                                              December 31, 2020
(Dollars in thousands)                  One Year        After One Year          After
                                        and Less      Through Five Years      Five Years       Total
Commercial and Industrial               $  38,794    $             42,455    $     10,626$  91,875
Commercial Real Estate                     64,082                 356,918          45,728      466,728
Residential Real Estate                    34,769                  31,055          91,159      156,983
Consumer                                    2,510                   2,500              14        5,024
Total                                   $ 140,155    $            432,928    $    147,527$ 720,610
Loans with a fixed interest rate        $  59,220    $             82,325    $    112,355$ 253,900
Loans with a variable interest rate        80,935                 350,603
       35,172      466,710
Total                                   $ 140,155    $            432,928    $    147,527$ 720,610


The above data represents the amount of loans receivable at December 31, 2020
which are due or have the opportunity to reprice in the periods indicated, based
on remaining scheduled repayments of principal for fixed rate loans or date of
next repricing opportunity for variable rate loans. The fixed and variable
portions of the amounts of loans receivable due or repricing in the periods
indicated are also summarized above.

INDEMNITY FOR LOAN LOSSES

The allowance for loan losses constitutes the amount available to absorb losses
within the loan portfolio. As of December 31, 2020, the allowance for loan
losses was $7,933,000 as compared to $7,005,000 as of December 31, 2019. The
allowance for loan losses is established through a provision for loan losses
charged to expenses. Loans are charged against the allowance for possible loan
losses when management believes that the collectability of the principal is
unlikely. The risk characteristics of the loan portfolio are managed through
various control processes, including credit evaluations of individual borrowers,
periodic reviews, and diversification by industry. Risk is further mitigated
through the application of lending procedures such as the holding of adequate
collateral and the establishment of contractual guarantees.

Management performs a quarterly analysis to determine the adequacy of the
allowance for loan losses. The methodology in determining adequacy incorporates
specific and general allocations together with a risk/loss analysis on various
segments of the portfolio according to an internal loan review process. This
assessment results in an allocated allowance. Management maintains its loan
review and loan classification standards consistent with those of its regulatory
supervisory authority.

Management considers, based upon its methodology, that the allowance for loan
losses is adequate to cover foreseeable future losses. However, there can be no
assurance that the allowance for loan losses will be adequate to cover
significant losses, if any, that might be incurred in the future. In response to
the COVID-19 pandemic and its impact on the current economy, the qualitative
factors related to the local/regional economy were increased by two basis points
across all loan segments during the first quarter of 2020, and increased by an
additional basis point across all loan segments during the second quarter of
2020. The qualitative factor relating to the impact of external
factors/conditions for the Commercial Real Estate portfolio segment was
increased by an additional basis point during the third quarter of 2020. The
qualitative factors relating to the impact of external factors/conditions were
increased by two additional basis points across all loan segments during the
fourth quarter of 2020. Modifications granted in compliance with Section 4013 of
the CARES Act are highest in the Commercial Real Estate portfolio segment, the
long-term effects of which are still very unclear, as there is still economic
uncertainty related to the COVID-19 pandemic, especially in relation to this
segment of the Corporation's loan portfolio.

Table 10 contains an analysis of the allowance for loan losses indicating
charge-offs and recoveries by year. In 2020, net charge-offs as a percentage of
average loans were 0.04% as compared to 0.03% in 2019. Net charge-offs amounted
to $272,000 in 2020 and $190,000 in 2019. Net charge-offs were greater in 2020
than in 2019 mainly due to one charge-off totaling $86,000 in the Commercial
Real Estate portfolio that was completed during the fourth quarter of 2020 on a
non-accrual loan to a student housing holding company. The charge-off was
completed to charge the loan

                                       36

Contents

balance down to the net realizable value of the collateral less cost to sell, as
the underlying value of the collateral was deemed insufficient to cover the loan
balance.

For the year ended December 31, 2020, the provision for loan losses was
$1,200,000 as compared to $450,000 for the year ended December 31, 2019. The net
effect of the provision, charge-offs and recoveries resulted in the year-end
allowance for loan losses of $7,933,000 of which 9.9% was attributed to the
Commercial and Industrial component, 60.0% attributed to the Commercial Real
Estate component, 20.7% attributed to the Residential Real Estate component,
1.2% attributed to the Consumer component, and 8.2% being the unallocated
component (refer to the activity in Note 4 - Loans and Allowance for Loan Losses
on page 75.) The Corporation determined that the provision for loan losses made
during 2020 was sufficient to maintain the allowance for loan losses at a level
necessary for the probable losses inherent in the loan portfolio as of December
31, 2020.

Table 10 – Analysis of the allowance for loan losses

(Dollars in thousands)                                    Years Ended December 31,
                                              2020       2019       2018       2017       2016
Balance at beginning of period               $ 7,005$ 6,745$ 7,487
  $ 7,357$ 6,739
Charge-offs:
Commercial and Industrial                         90          -         18          -        195
Commercial Real Estate                           141         64        783        189      1,200
Residential Real Estate                           33         69        181         62         61
Consumer                                          37         71         57         82         38
                                                 301        204      1,039        333      1,494
Recoveries:
Commercial and Industrial                         14          6         31         74          9
Commercial Real Estate                             -          -         60        103          -
Residential Real Estate                            8          2          -          9         12
Consumer                                           7          6          6         10          8
                                                  29         14         97        196         29

Net charge-offs                                  272        190        942        137      1,465
Additions charged to operations                1,200        450        200        267      2,083
Balance at end of period                     $ 7,933$ 7,005$ 6,745

$ 7,487$ 7,357

Ratio of net charge-offs during the period
to average loans outstanding during the         0.04 %     0.03 %     0.16 %     0.03 %     0.28 %
period
Allowance for loan losses to average loans      1.16 %     1.13 %     1.15 %     1.40 %     1.42 %
outstanding during the period




It is the policy of management and the Corporation's Board of Directors to make
a provision for both identified and unidentified losses inherent in its loan
portfolio. A provision for loan losses is charged to operations based upon an
evaluation of the potential losses in the loan portfolio. This evaluation takes
into account such factors as portfolio concentrations, delinquency trends,
trends of non-accrual and classified loans, economic conditions, and other
relevant factors.

The loan review process, which is conducted quarterly, is an integral part of
the Bank's evaluation of the loan portfolio. A detailed quarterly analysis to
determine the adequacy of the Corporation's allowance for loan losses is
reviewed by the Board of Directors.

With the Bank's manageable level of net charge-offs and the additions to the
reserve from the provision out of operations, the allowance for loan losses as a
percentage of average loans amounted to 1.16% in 2020 and 1.13% in 2019.

                                       37

Contents

Table 11 sets forth the allocation of the Bank's allowance for loan losses by
loan category and the percentage of loans in each category to the total
allowance for loan losses at the dates indicated. The portion of the allowance
for loan losses allocated to each loan category does not represent the total
available for future losses that may occur within the loan category, since the
total loan loss allowance is a valuation reserve applicable to the entire loan
portfolio.

Table 11 – Breakdown of the allowance for loan losses

(Dollars in thousands)


                                                           December 31,
                   2020       %*       2019       %*       2018       %*       2017       %*       2016       %*
Commercial and    $   787     10.8    $   634      9.7    $   724     11.7    $   949     14.0    $   836     11.7
Industrial
Commercial          4,762     65.4      4,116     63.0      3,700     59.8      4,067     60.0      4,421     62.0
Real Estate
Residential         1,643     22.5      1,665     25.5      1,650     26.6
    1,656     24.4      1,777     24.9
Real Estate
Consumer               94      1.3        114      1.8        117      1.9        111      1.6         95      1.4
Unallocated           647      N/A        476      N/A        554      N/A        704      N/A        228      N/A
                  $ 7,933    100.0    $ 7,005    100.0    $ 6,745    100.0    $ 7,487    100.0    $ 7,357    100.0


* Percentage of allocation in each category of total allocations in the allowance for loan loss analysis, excluding unallocated allocations.

NON-PERFORMING ASSETS

Table 12 details the Corporation's non-performing assets and impaired loans as
of the dates indicated. Generally, a loan is classified as non-accrual and the
accrual of interest on such a loan is discontinued when the contractual payment
of principal or interest has become 90 days past due or management has serious
doubts about further collectability of principal or interest, even though the
loan currently is performing. A loan may remain on accrual status if it is in
the process of collection and is either guaranteed or well secured. When a loan
is placed on non-accrual status, unpaid interest credited to income in the
current year is reversed and unpaid interest accrued in prior years is charged
against current period income. A modification of a loan constitutes a troubled
debt restructuring ("TDR") when a borrower is experiencing financial difficulty
and the modification constitutes a concession that the Corporation would not
otherwise consider. Modifications to loans classified as TDRs generally include
reductions in contractual interest rates, principal deferments and extensions of
maturity dates at a stated interest rate lower than the current market for a new
loan with similar risk characteristics. While unusual, there may be instances of
loan principal forgiveness. Any loan modifications made in response to the
COVID-19 pandemic are not considered troubled debt restructurings as long as the
criteria set forth in Section 4013 of the CARES Act are met. Foreclosed assets
held for resale represent property acquired through foreclosure, or considered
to be an in-substance foreclosure.

Total non-performing assets amounted to $7,119,000 as of December 31, 2020, as
compared to $4,607,000 as of December 31, 2019. The economy, in particular, the
political unrest both domestic and abroad, the recent presidential election, the
partial and full shutdowns of various government offices, the recession
resulting from the COVID-19 pandemic, the large unemployment totals, and the
continued slowness in the housing industries in our market areas has had a
direct effect on the Corporation's non-performing assets. The Corporation is
closely monitoring its Commercial Real Estate portfolio because of the current
uncertain economic environment. Non-accrual loans totaled $7,078,000 as of
December 31, 2020 as compared to $4,388,000 as of December 31, 2019. Foreclosed
assets held for resale decreased to $28,000 as of December 31, 2020, compared to
$119,000 as of December 31, 2019. Loans past-due 90 days or more and still
accruing interest amounted to $13,000 at December 31, 2020, as compared to
$100,000 as of December 31, 2019. At December 31, 2020, loans past-due 90 days
or more and still accruing interest consisted of one Residential Real Estate
loan which was well secured and in the process of collection.

The increase in non-accrual loans at December 31, 2020, as compared to December
31, 2019 is mainly due to the addition of several large loans/loan relationships
to non-accrual status during the year ended December 31, 2020. Five loans to a
plastic processing company focused on non-post-consumer recycling totaling
$1,262,000 were moved to

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non-accrual status during the first quarter of 2020 due to strained liquidity
and the borrower's inability to make required payments. A loan in the amount of
$762,000 to a golf course and catering venue was moved to non-accrual status
during the first quarter of 2020 due to the borrower's inability to make monthly
payments due to cash flow challenges exacerbated by the seasonality of the
industry. A residential mortgage in the amount of $356,000 to the owner of a
manufacturing company was also moved to non-accrual status during the first
quarter of 2020, as poor payment performance has led to foreclosure proceedings
related to the associated property. A loan in the amount of $485,000 to an
agricultural producer was moved to non-accrual status during the fourth quarter
of 2020 due to cash flow challenges that have led to payment delinquency, as
well as issues with additional liens on the real estate collateral which are
impeding efforts to sell the property and pay off the loan.

Non-performing assets to total loans was 0.99% as of December 31, 2020 compared
to 0.71% at December 31, 2019. Non-performing assets to total assets was 0.60%
as of December 31, 2020 compared to 0.46% at December 31, 2019. The allowance
for loan losses to total non-performing assets was 111.43% as of December 31,
2020 as compared to 152.05% as of December 31, 2019. Additional detail can be
found in Table 12 - Non-Performing Assets and Impaired Loans and the Loans
Receivable on Non-Accrual Status table in Note 4 - Loans and Allowance for Loan
Losses. Asset quality is a priority and the Corporation retains a full-time loan
review officer to closely track and monitor overall loan quality, along with a
full-time loan workout department to manage collection and liquidation efforts.

Performing substandard loans which are not deemed to be impaired have
characteristics that cause management to have doubts regarding the ability of
the borrower to perform under present loan repayment terms and which may result
in reporting these loans as non-performing loans in the future. Performing
substandard loans not deemed to be impaired amounted to $9,992,000 at December
31, 2020 and $4,074,000 at December 31, 2019.

Impaired loans were $15,054,000 at December 31, 2020 and $12,954,000 at December
31, 2019. The largest impaired loan relationship at December 31, 2020 consisted
of a non-performing loan to a student housing holding company which was secured
by commercial real estate. At December 31, 2020, the loan carried a balance of
$3,090,000, net of $1,989,000 that had been charged off to date. The second
largest impaired loan relationship at December 31, 2020 consisted of one
performing loan to a student housing holding company, which was classified as a
TDR. The loan was secured by commercial real estate and carried a balance of
$2,929,000 as of December 31, 2020, net of $943,000 that had been charged off to
date. The third largest impaired loan relationship at December 31, 2020
consisted of a substandard performing loan to a developer of a residential
sub-division in the amount of $1,326,000, which was secured by commercial real
estate and classified as a TDR.

The Corporation estimates impairment based on its analysis of the cash flows or
collateral estimated at fair value less cost to sell. For collateral dependent
loans, the estimated valuation adjustments and cost to sell percentages are
determined based on the market area in which the real estate securing the loan
is located, among other factors, and therefore, can differ from one loan to
another. Of the $15,054,000 in impaired loans at December 31, 2020, none were
located outside the Corporation's primary market area.

The outstanding recorded investment of loans categorized as TDRs as of December
31, 2020 and December 31, 2019 was $9,563,000 and $8,678,000, respectively. The
increase in TDRs at December 31, 2020 as compared to December 31, 2019 is mainly
attributable to eight loans that were modified as TDRs during the year ended
December 31, 2020, net against payments, payoffs, and charge-offs on existing
TDRs that were completed during the year ended December 31, 2020. Of the
thirty-four restructured loans at December 31, 2020, eight loans were classified
in the Commercial and Industrial portfolio, twenty-five loans were classified in
the Commercial Real Estate portfolio, and one loan was classified in the
Residential Real Estate portfolio. Troubled debt restructurings at December 31,
2020 consisted of thirteen term modifications beyond the original stated term,
three interest rate modifications, and seventeen payment modifications. At
December 31, 2020, there was also one troubled debt restructuring that
experienced all three types of modification-payment, rate, and term. TDRs are
separately evaluated for impairment disclosures, and if necessary, a specific
allocation is established. As of December 31, 2020, there were no specific
allocations attributable to the TDRs, compared to December 31, 2019 when there
were $1,000 in specific allocations attributable to the TDRs. There were no
unfunded commitments on TDRs at December 31, 2020 and 2019.

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Contents

At December 31, 2020, three Commercial and Industrial loans classified as TDRs
with a combined recorded investment of $745,000, seven Commercial Real Estate
loans classified as TDRs with a combined recorded investment of $984,000, and
one Residential Real Estate loan classified as a TDR with a recorded investment
of $18,000 were not in compliance with the terms of their restructure, compared
to December 31, 2019 when six Commercial Real Estate loans classified as TDRs
with a combined recorded investment of $464,000 were not in compliance with the
terms of their restructure.

Two Commercial Real Estate loans totaling $57,000 that were modified as TDRs
within the twelve months preceding December 31, 2020 experienced payment
defaults during the year ended December 31, 2020. No loans were modified as TDRs
within the twelve months preceding December 31, 2019.

The Corporation's non-accrual loan valuation procedure for any loans greater
than $250,000 requires an appraisal to be obtained and reviewed annually at year
end, unless the Board of Directors waives such requirement for a specific loan,
in favor of obtaining a Certificate of Inspection instead, defined as an
internal evaluation completed by the Corporation. A quarterly collateral
evaluation is performed which may include a site visit, property pictures and
discussions with realtors and other similar business professionals to ascertain
current values.

For non-accrual loans less than $250,000 upon classification and typically at
year end, the Corporation completes a Certificate of Inspection, which includes
the results of an onsite inspection, and may consider value indicators such as
insured values, tax assessed values, recent sales comparisons and a review of
the previous evaluations.

Improving loan quality is a priority. The Corporation actively works with
borrowers to resolve credit problems and will continue its close monitoring
efforts in 2021. Excluding the assets disclosed in Table 12 - Non-Performing
Assets and Impaired Loans and the Troubled Debt Restructurings section in Note 4
- Loans and Allowance for Loan Losses, management is not aware of any
information about borrowers' possible credit problems which cause serious doubt
as to their ability to comply with present loan repayment terms.

In addition, regulatory authorities, as an integral part of their examinations,
periodically review the allowance for possible loan losses. They may require
additions to allowances based upon their judgments about information available
to them at the time of examination.

The economic climate is unclear at this time. The COVID-19 pandemic has caused
much upheaval and uncertainty in the national and state economy. Experts at all
levels are uncertain as to the intermediate or long term affects that may arise.
The Corporation may experience difficulties collecting monthly payments on time
from its borrowers, property values may decline, and certain types of loans may
need to be modified, which could cause a rise in the level of impaired loans,
non-performing assets, charge-offs, and delinquencies. Should such metrics
increase, additions to the balance of the Corporation's allowance for loan
losses could be required. The extent of the impact of the COVID-19 pandemic on
the Corporation's operational and financial performance will depend on certain
developments including the duration and spread of the outbreak.

A concentration of credit exists when the total amount of loans to borrowers,
who are engaged in similar activities that are similarly impacted by economic or
other conditions, exceed 10% of total loans. As of December 31, 2020 and 2019
management is of the opinion that there were no loan concentrations exceeding
10% of total loans.

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  Table of Contents

Table 12 – Non-performing assets and impaired loans

(Dollars in thousands)                                     December 31,       December 31,
                                                               2020               2019
Non-performing assets
Non-accrual loans                                         $         7,078    $         4,388
Foreclosed assets held for resale                                      28                119
Loans past-due 90 days or more and still accruing
interest                                                               13                100
Total non-performing assets                               $         7,119
 $         4,607

Impaired loans
Non-accrual loans                                         $         7,078    $         4,388
Accruing TDRs                                                       7,976              8,566
Total impaired loans                                               15,054             12,954
Allocated allowance for loan losses                                   (8)                (1)
Net investment in impaired loans                          $        15,046

$ 12,953

Impaired loans with a valuation allowance                 $           486    $            28
Impaired loans without a valuation allowance                       14,568

12 926

Total impaired loans                                      $        15,054

$ 12,954

Allocated valuation allowance as a percent of impaired
loans                                                                0.05 %             0.01 %
Impaired loans to total loans                                        2.09 %             2.00 %
Non-performing assets to total loans                                 0.99 %             0.71 %
Non-performing assets to total assets                                0.60 %             0.46 %
Allowance for loan losses to impaired loans                         52.70 %            54.08 %
Allowance for loan losses to total non-performing
assets                                                             111.43 %           152.05 %




Real estate mortgages comprise 86.6% of the loan portfolio as of December 31,
2020, as compared to 85.7% as of December 31, 2019. Real estate mortgages
consist of both residential and commercial real estate loans. The real estate
loan portfolio is well diversified in terms of borrowers, collateral, interest
rates, and maturities. Also, the residential real estate loan portfolio is
largely comprised of fixed rate mortgages. The real estate loans are
concentrated primarily in the Corporation's market area and are subject to risks
associated with the local economy. The commercial real estate loans typically
reprice approximately every three to five years and are also concentrated in the
Corporation's market area. The Corporation's loss exposure on its impaired loans
continues to be mitigated by collateral positions on these loans. The allocated
allowance for loan losses associated with impaired loans is generally computed
based upon the related collateral value of the loans. The collateral values are
determined by recent appraisals or Certificates of Inspection, but are generally
discounted by management based on historical dispositions, changes in market
conditions since the last valuation and management's expertise and knowledge of
the borrower and the borrower's business.

DEPOSITS, OTHER BORROWING AND SUBORDINATED DEBT

Consumer and commercial retail deposits are attracted primarily by the
Corporation's eighteen full service office locations, one loan production
office, and through its internet banking presence. The Corporation offers a
broad selection of deposit products and continually evaluates its interest rates
and fees on deposit products. The Corporation regularly reviews competing
financial institutions' interest rates, especially when establishing interest
rates on certificates of deposit.

Deposits increased by $175,860,000, or 23.1% for the year ending December 31,
2020 as compared to December 31, 2019. The increase in deposits in 2020 can be
attributed to increases in non-interest bearing, interest bearing and savings
deposits. The increase in deposits was the result of many different factors
including the deposit of stimulus funds, PPP loan proceeds, an $83,000,000
increase in highly rate sensitive deposits and other normal fluctuations in
deposits during 2020.

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  Table of Contents

The following table reflects the remaining maturities of term deposits and other open term deposits of $ 100,000 or more at December 31, 2020.

(Dollars in thousands)                Time        Other Time Open
                                    Deposits         Deposits
                                   ?$100,000         ?$100,000
Less than or equal to 3 months     $   10,053    $               -
Over 3 months through 6 months         11,399                    -
Over 6 months through 12 months        16,894                  855
Over 12 months                         29,776                    -
                                   $   68,122    $             855




Total borrowings were $64,494,000 as of December 31, 2020, compared to
$109,663,000 at December 31, 2019. During 2020, long-term borrowings decreased
from $55,000,000 to $45,000,000. The decrease in long-term borrowings in 2020
was the result of the maturity of two individual term notes with FHLB.

Short-term debt decreased from $54,663,000 in 2019 to $19,494,000 as of December
31, 2020 as a result of increased deposit balances. Short-term borrowings are
comprised of federal funds purchased, securities sold under agreements to
repurchase, Federal Discount Window and short-term borrowings from FHLB.
Short-term borrowings from FHLB are commonly used to offset seasonal
fluctuations in deposits.

In connection with the FHLB borrowings, the federal discount window and securities sold under repurchase agreements, the Company retains certain eligible assets as collateral.

The following table presents information on the Company’s short-term borrowings as of December 31, 2020 and 2019.

Table 13 – Short-term loans

(Dollars in thousands)


                                                                        2020
                                                                               Maximum
                                                   Month End     Average      Month End     Average
                                                    Balance      Balance       Balance       Rate
Federal funds purchased                           $         -    $      -    $         -       0.37 %
Securities sold under agreements to repurchase         19,494      18,350
      23,453       0.58 %
Federal Discount Window                                     -           -              -       0.37 %
Federal Home Loan Bank                                      -      25,396         54,434       1.00 %
                                                  $    19,494$ 43,746$    77,887       0.82 %




(Dollars in thousands)


                                                                        2019
                                                                               Maximum
                                                   Month End      Average     Month End     Average
                                                    Balance       Balance      Balance       Rate
Federal funds purchased                           $         -    $       -    $        -       2.01 %
Securities sold under agreements to repurchase         14,042       15,632
      17,540       1.03 %
Federal Discount Window                                     -            -             -       2.92 %
Federal Home Loan Bank                                 40,621       96,377       178,160       2.59 %
                                                  $    54,663$ 112,009$  195,700       2.37 %




On December 10, 2020, the Corporation issued $25,000,000 aggregate principal
amount of Subordinated Notes due December 31, 2030 (the "2020 Notes"). The 2020
Notes are intended to be treated as Tier 2 capital for regulatory capital
purposes. The 2020 Notes bear a fixed interest rate of 4.375% per year for the
first five years and then float based on a benchmark rate (as defined).



                                       42

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CAPITAL STRENGTH

Normal increases in capital are generated by net income, less cash dividends
paid out. Also, the net unrealized gains or losses on debt securities
available-for-sale, net of taxes, referred to as accumulated other comprehensive
income, may increase or decrease total equity capital. The total net increase in
capital was $15,490,000 in 2020 after an increase of $11,996,000 in 2019. The
increase in equity capital in 2020 was due to the retention of $5,529,000 in
earnings and the issuance of new shares through the Corporation's Dividend
Reinvestment Program ("DRIP") amounting to $1,312,000. Accumulated other
comprehensive income increased $8,649,000 in 2020 as a result of market
fluctuations in the investment portfolio.

The Corporation had 231,612 shares of common stock as of December 31, 2020 and
December 31, 2019, at a cost of $5,709,000, as treasury stock, authorized and
issued but not outstanding.

Return on average equity ("ROE") is computed by dividing net income by average
stockholders' equity. This ratio was 8.61% for 2020 and 8.17% for 2019. Refer to
Performance Ratios on page 24 - Selected Financial Data for a more expanded
listing of the ROE.

Adequate capitalization of banks and bank holding companies is required and
monitored by regulatory authorities. Table 14 reflects risk-based capital ratios
and the leverage ratio for the Bank. The Bank's leverage ratio was 10.81% at
December 31, 2020 and 9.42% at December 31, 2019.

The Bank has consistently maintained regulatory capital ratios at or above the
"well capitalized" standards. To be categorized as "well capitalized", the Bank
must maintain minimum tier 1 risk-based capital, common equity tier 1 risk based
capital, total risk-based capital and tier 1 leverage ratios of 8.0%, 6.5%,
10.0% and 5.0%, respectively. For additional information on capital ratios, see
Note 14 - Regulatory Matters. The risk-based capital calculation assigns various
levels of risk to different categories of bank assets, requiring higher levels
of capital for assets with more risk. Also measured in the risk-based capital
ratio is credit risk exposure associated with off-balance sheet contracts and
commitments.

Table 14 - Capital Ratios

At December 31, 2020, the Bank met the definition of a "well-capitalized"
institution under the regulatory framework for prompt corrective action and the
minimum capital requirements under Basel III. The following table presents the
Bank's capital ratios as of December 31, 2020 and December 31, 2019:





                                                                                      To Be Well
                                                                                      Capitalized
                                                                                     Under Prompt
                                                 December 31,     December 31,     Corrective Action
                                                     2020             2019            Regulations
Tier 1 leverage ratio (to average assets)                10.81 %           9.42 %               5.00 %
Common Equity Tier 1 capital ratio (to
risk-weighted assets)                                    15.99 %          13.50 %               6.50 %
Tier 1 risk-based capital ratio (to
risk-weighted assets)                                    15.99 %          13.50 %               8.00 %
Total risk-based capital ratio                           17.05 %          14.53 %              10.00 %




The increase in the Bank's capital ratios was mainly due to $22,500,000
contributed by the Corporation from proceeds of a $25,000,000 subordinated debt
issuance. The subordinated debt is treated as tier 1 capital at the Bank level
and tier 2 capital at the Corporation level for regulatory capital purposes.

Under the final capital rules that became effective on January 1, 2015, there
was a requirement for a common equity tier 1 capital conservation buffer of 2.5%
of risk-weighted assets which is in addition to the other minimum risk-based
capital standards in the rule. Institutions that do not maintain this required
capital buffer will become subject to progressively more stringent limitations
on the percentage of earnings that can be paid out in dividends or used for
stock repurchases and on the payment of discretionary bonuses to senior
executive management. The capital buffer

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requirement was phased in over three years beginning in 2016. The capital buffer
requirement effectively raises the minimum required common equity tier 1 capital
ratio to 7.0%, the tier 1 capital ratio to 8.5%, and the total capital ratio to
10.5% on a fully phased-in basis on January 1, 2019. As of December 31, 2020,
the Bank meets all capital adequacy requirements under the Basel III Capital
Rules on a fully phased-in basis.

The Company’s capital ratios are not significantly different from those of the Bank.

LIQUIDITY MANAGEMENT

The Corporation's objective is to maintain adequate liquidity to meet funding
needs at a reasonable cost and provide contingency plans to meet unanticipated
funding needs or a loss of funding sources, while minimizing interest rate risk.
Adequate liquidity is needed to provide the funding requirements of depositors'
withdrawals, loan growth, and other operational needs.

The sources of liquidity are as follows:

? Growth of the base of basic deposits;

? The proceeds from sales or maturities of investment securities;

? Payments received on loans and mortgage-backed securities;

? Corresponding day-to-day bank loans on different lines of credit, banknotes, etc.,

with different levels of capacity;

? Securities sold under repurchase agreements; and

? CDs negotiated.

At December 31, 2020, the Corporation had $402,240,000 in available borrowing
capacity at FHLB (which takes into account FHLB long-term notes and FHLB
short-term borrowings); the maximum borrowing capacity at ACBB was $15,000,000
and the maximum borrowing capacity of the Federal Discount Window was
$4,215,000.

The Corporation enters into "Repurchase Agreements" in which it agrees to sell
securities subject to an obligation to repurchase the same or similar
securities. Because the agreement both entitles and obligates the Corporation to
repurchase the assets, the Corporation may transfer legal control of the
securities while still retaining effective control. As a result, the repurchase
agreements are accounted for as collateralized financing agreements (secured
borrowings) and act as an additional source of liquidity. Securities sold under
agreements to repurchase were $19,494,000 at December 31, 2020.

Asset liquidity is provided by investment securities maturing in one year or
less, other short-term investments, federal funds sold, and cash and due from
banks. The liquidity is augmented by repayment of loans and cash flows from
mortgage-backed and asset-backed securities. Liability liquidity is accomplished
primarily by maintaining a core deposit base, acquired by attracting new
deposits and retaining maturing deposits. Also, short-term borrowings provide
funds to meet liquidity needs.

Net cash flows used in operating activities were $1,957,000 as of December 31,
2020, compared to net cash flows provided by operating activities of $12,539,000
as of December 31, 2019. Net income amounted to $11,837,000 for the year ended
December 31, 2020 and $10,227,000 for the year ended December 31, 2019. During
the years ended December 31, 2020 and 2019, net premium amortization on
investment securities amounted to $2,003,000 and $2,624,000, respectively.
Originations of mortgage loans originated for resale exceeded proceeds
(including gains) from sales of mortgage loans originated for resale by
$15,115,000 and $1,664,000 for the years ended December 31, 2020 and 2019,
respectively. Net securities losses were $58,000 for the year ended December 31,
2020, compared to net securities gains of $911,000 for the year ended December
31, 2019. Accrued interest receivable increased by $1,139,000 during the year
ended December 31, 2020 and decreased by $636,000 during the year ended December
31, 2019. Other assets decreased by $550,000 during the year ended December 31,
2020 and increased by $916,000 during the year ended December 31, 2019. Other
liabilities decreased by $867,000 during the year ended December 31, 2020,
compared to an increase of $1,667,000 during the year ended December 31, 2019.

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Investing activities used cash of $135,264,000 during the year ended December
31, 2020 and provided cash of $11,986,000 during the year ended December 31,
2019. Net activity in the available-for-sale securities portfolio (including
proceeds from sale, maturities, and redemptions net against purchases) used cash
of $79,609,000 during the year ended December 31, 2020 and provided cash of
$45,660,000 during the year ended December 31, 2019. Net cash used to originate
loans amounted to $57,415,000 and $39,504,000 during the years ended December
31, 2020 and 2019, respectively.

Financing activities provided cash of $150,677,000 during the year ended
December 31, 2020 and used cash of $24,751,000 during the year ended December
31, 2019. Deposits increased by $175,860,000 and $90,075,000 during the years
ended December 31, 2020 and 2019, respectively. Short-term borrowings decreased
by $35,169,000 and $119,782,000 during the years ended December 31, 2020 and
2019, respectively. There were no proceeds from long-term borrowings during the
year ended December 31, 2020, compared to proceeds from long-term borrowings of
$30,000,000 for the year ended December 31, 2019. Repayment of long-term
borrowings amounted to $10,000,000 for the year ended December 31, 2020 and
$20,000,000 for the year ended December 31, 2019. Proceeds from issuance of
subordinated debentures amounted to $25,000,000 for the year ended December 31,
2020, compared to the year ended December 31, 2019 when there were no issuances
of subordinated debentures. Dividends paid amounted to $6,308,000 and $6,247,000
during the years ended December 31, 2020 and 2019, respectively.

Managing liquidity remains an important segment of asset/liability management.
The overall liquidity position of the Corporation is maintained by an active
asset/liability management committee. The Corporation believes that its core
deposit base is stable even in periods of changing interest rates. Liquidity and
funds management are governed by policies and measured on a monthly basis. These
measurements indicate that liquidity generally remains stable and exceeds the
Corporation's minimum defined levels of adequacy. Other than the trends of
continued competitive pressures and volatile interest rates, there are no known
demands, commitments, events or uncertainties that will result in, or that are
reasonably likely to result in, liquidity increasing or decreasing in any
material way. Given our financial strength, we expect to be able to maintain
adequate liquidity as we manage through the current environment, utilizing
current funding options and possibly exploring new options, such as the Federal
Reserve's Paycheck Protection Program Liquidity Facility ("PPPLF").

Table 15 represents the expected maturities of the Company’s contractual obligations as a function of the time remaining until maturity at December 31, 2020.

Table 15 – Contractual obligations

(Dollars in thousands)


                                     Less than      1 - 3        4 -5        Over
December 31, 2020                      1 Year       Years       Years      5 Years       Total
Time deposits                        $   99,609$ 68,597$ 25,178$    444$  193,828
Securities sold under agreement
to repurchase                            19,494           -           -           -        19,494
Long-term borrowings                     10,000      13,000      20,000       2,000        45,000
Subordinated debentures                       -           -           -      25,000        25,000
Operating lease obligations                 140         154         136       2,258         2,688
Financing lease obligations                  19          34          18          16            87
                                     $  129,262$ 81,785$ 45,332$ 29,718$  286,097

Off-balance sheet arrangements

The Corporation is party to financial instruments with off-balance sheet risk in
the normal course of business to meet the financing needs of its customers.
These financial instruments include commitments to extend credit and, to a
lesser extent, standby letters of credit. At December 31, 2020, the Corporation
had outstanding unfunded commitments to extend credit of $114,836,000 and
outstanding standby letters of credit of $4,623,000. Because these commitments
generally have fixed expiration dates and many will expire without being drawn
upon, the total commitment level does not necessarily represent future cash
requirements. Please refer to Note 15 - Financial Instruments with Off-Balance

                                       45

  Table of Contents

Risk and credit risk concentrations sheet for an analysis of the nature, business purpose and importance of the Company’s off-balance sheet arrangements.

MARKET RISK

Market risk is the risk of loss arising from adverse changes in the fair value
of financial instruments due to changes in interest rates, exchange rates and
equity prices. The Corporation's market risk is composed primarily of interest
rate risk. The Corporation's interest rate risk results from timing differences
in the repricing of assets, liabilities, off-balance sheet instruments, and
changes in relationships between rate indices and the potential exercise of
explicit or embedded options.

Increases in the level of interest rates also may adversely affect the fair
value of the Corporation's securities and other earning assets. Generally, the
fair value of fixed-rate instruments fluctuates inversely with changes in
interest rates. As a result, increases in interest rates could result in
decreases in the fair value of the Corporation's interest-earning assets, which
could adversely affect the Corporation's results of operations if sold, or, in
the case of interest-earning assets classified as available-for-sale, the
Corporation's stockholders' equity, if retained. Under FASB ASC 320-10,
Investments - Debt Securities, changes in the unrealized gains and losses, net
of taxes, on debt securities classified as available-for-sale are reflected in
the Corporation's stockholders' equity. The Corporation does not own any trading
assets.

Asset/Liability Management

The principal objective of asset/liability management is to manage the
sensitivity of the net interest margin to potential movements in interest rates
and to enhance profitability through returns from managed levels of interest
rate risk. The Corporation actively manages the interest rate sensitivity of its
assets and liabilities. Table 16 presents an interest sensitivity analysis of
assets and liabilities as of December 31, 2020. Several techniques are used for
measuring interest rate sensitivity. Interest rate risk arises from the
mismatches in the repricing of assets and liabilities within a given time
period, referred to as a rate sensitivity gap. If more assets than liabilities
mature or reprice within the time frame, the Corporation is asset sensitive.
This position would contribute positively to net interest income in a rising
rate environment. Conversely, if more liabilities mature or reprice, the
Corporation is liability sensitive. This position would contribute positively to
net interest income in a falling rate environment.

Limitations of interest rate sensitivity gap analysis as illustrated in Table 16
include: a) assets and liabilities which contractually reprice within the same
period may not, in fact, reprice at the same time or to the same extent; b)
changes in market interest rates do not affect all assets and liabilities to the
same extent or at the same time, and c) interest rate sensitivity gaps reflect
the Corporation's position on a single day (December 31, 2020 in the case of the
following schedule) while the Corporation continually adjusts its interest
sensitivity throughout the year. The Corporation's cumulative gap at one year
indicates the Corporation is asset sensitive at December 31, 2020.

Table 16 – Interest rate sensitivity analysis

(Dollars in thousands)




                                                            December 31, 2020
                                       One         1 - 5        Beyond        Not Rate
                                      Year         Years        5 Years      Sensitive        Total
Assets                              $ 274,042$ 489,665$   322,069$   93,271$ 1,179,047

Liabilities / Equity 260,020 182,963 569,102

    166,962      1,179,047

Interest Rate Sensitivity Gap       $  14,022$ 306,702$ (247,033)$ (73,691)

Cumulative Gap                      $  14,022$ 320,724$    73,691             -




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Earnings at Risk
The Bank's Asset/Liability Committee ("ALCO") is responsible for reviewing the
interest rate sensitivity position and establishing policies to monitor and
limit exposure to interest rate risk. The guidelines established by ALCO are
reviewed by the Corporation's Board of Directors. The Corporation recognizes
that more sophisticated tools exist for measuring the interest rate risk in the
balance sheet beyond interest rate sensitivity gap. Although the Corporation
continues to measure its interest rate sensitivity gap, the Corporation utilizes
additional modeling for interest rate risk in the overall balance sheet.
Earnings at risk and economic values at risk are analyzed.

Earnings simulation modeling addresses earnings at risk and net present value
estimation addresses economic value at risk. While each of these interest rate
risk measurements has limitations, taken together they represent a reasonably
comprehensive view of the magnitude of interest rate risk to the Corporation.

Modeling of revenue simulation

The Corporation's net income is affected by changes in the level of interest
rates. Net income is also subject to changes in the shape of the yield curve.
For example, a flattening of the yield curve would result in a decline in
earnings due to the compression of earning asset yields and increased liability
rates, while a steepening would result in increased earnings as earning asset
yields widen.

Earnings simulation modeling is the primary mechanism used in assessing the
impact of changes in interest rates on net interest income. The model reflects
management's assumptions related to asset yields and rates paid on liabilities,
deposit sensitivity, size and composition of the balance sheet. The assumptions
are based on what management believes at that time to be the most likely
interest rate environment. Earnings at risk is the change in net interest income
from a base case scenario under various scenarios of rate shock increases and
decreases in the interest rate earnings simulation model.

Table 17 presents an analysis of the changes in net interest income and net
present value of the balance sheet resulting from various increases or decreases
in the level of interest rates, such as two percentage points (200 basis points)
in the level of interest rates. The calculated estimates of change in net
interest income and net present value of the balance sheet are compared to
current limits approved by ALCO and the Board of Directors. The earnings
simulation model projects net interest income would decrease 3.62%, 7.76% and
11.61% in the 100, 200 and 300 basis point increasing rate scenarios presented.
In addition, the earnings simulation model projects net interest income would
decrease 2.52% and 7.79% in the 100 and 200 basis point decreasing rate
scenarios presented, respectively. All of these forecasts are within the
Corporation's one year policy guidelines.

The analysis and model used to quantify the sensitivity of net interest income
becomes less reliable in a decreasing rate scenario given the current
unprecedented low interest rate environment with federal funds trading in the 0
- 25 basis point range. Results of the decreasing basis point declining
scenarios are affected by the fact that many of the Corporation's
interest-bearing liabilities are at rates below 1% and therefore likely may not
decline 100 or more basis points. However, the Corporation's interest-sensitive
assets are able to decline by these amounts. For the years ended December 31,
2020 and 2019, the cost of interest-bearing liabilities averaged 0.84% and
1.38%, respectively, and the yield on average interest-earning assets, on a
fully taxable equivalent basis, averaged 4.09% and 4.33%, respectively.

Estimated Net Present Value

The net present value measures economic value at risk and is used for helping to
determine levels of risk at a point in time present in the balance sheet that
might not be taken into account in the earnings simulation model. The net
present value of the balance sheet is defined as the discounted present value of
asset cash flows minus the discounted present value of liability cash flows. At
December 31, 2020, the 100 and 200 basis point immediate decreases in rates are
estimated to affect net present value with a decrease of 46.58% and 117.55%,
respectively. Additionally, net present value is projected to increase 26.71%,
40.95%, and 46.03% in the 100, 200 and 300 basis point immediate increase
scenarios, respectively. All scenarios presented are within the Corporation's
policy limits, aside from the 100 basis point

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Contents

immediate downside scenario to (46.58)% from a policy limit of (20)% and immediate downward scenario of 200 basis points to (117.55)% from a policy limit of (30 )%.

The computation of the effects of hypothetical interest rate changes are based
on many assumptions. They should not be relied upon solely as being indicative
of actual results, since the computations do not account for actions management
could undertake in response to changes in interest rates.

Table 17 – Effect of changes in interest rates



                                                Projected Change
Effect on Net Interest Income
1-Year Net Income Simulation Projection
+300 bp Shock vs. Stable Rate                            (11.61) %
+200 bp Shock vs. Stable Rate                             (7.76) %
+100 bp Shock vs. Stable Rate                             (3.62) %
Flat rate
-100 bp Shock vs. Stable Rate                             (2.52) %
-200 bp Shock vs. Stable Rate                             (7.79) %

Effect on Net Present Value of Balance Sheet
Static Net Present Value Change
+300 bp Shock vs. Stable Rate                              46.03 %
+200 bp Shock vs. Stable Rate                              40.95 %
+100 bp Shock vs. Stable Rate                              26.71 %
Flat rate
-100 bp Shock vs. Stable Rate                            (46.58) %
-200 bp Shock vs. Stable Rate                           (117.55) %



Table 18 presents the Company’s quarterly operating results for the years ended. December 31, 2020 and 2019:

Table 18 – Quarterly operating results (unaudited)

(Dollars in thousands, except per share data)

                                                                    Three Months Ended
2020                                              March 31     June 30     September 30      December 31
Interest income                                  $    9,768$  9,631$       9,852$      10,316
Interest expense                                      2,392       1,513            1,231            1,224
Net interest income                                   7,376       8,118            8,621            9,092
Provision for loan losses                               194         194
         294              518
Non-interest income                                     983       1,621            1,515            1,893
Non-interest expense                                  5,915       5,655            6,256            6,779
Income before income tax expense                      2,250       3,890
       3,586            3,688
Income tax expense                                      197         509              449              422
Net income                                       $    2,053$  3,381$       3,137$       3,266
Basic and diluted earnings per share             $     0.35$   0.58
$        0.54$        0.56













                                       48

  Table of Contents

(Dollars in thousands, except per
share data)
                                                          Three Months Ended
2019                                      March 31    June 30    September 30     December 31
Interest income                          $    9,514$  9,479$       9,728$       9,806
Interest expense                              2,693      2,597           2,589           2,364
Net interest income                           6,821      6,882           7,139           7,442
Provision for loan losses                        92         46             175             137
Non-interest income                           1,507      1,616           2,226           1,580
Non-interest expense                          5,855      5,655           5,859           6,053
Income before income tax expense              2,381      2,797           3,331           2,832
Income tax expense                              138        267             408             301
Net income                               $    2,243$  2,530$       2,923$       2,531

Basic and diluted earnings per share $ 0.39$ 0.440.50 USD$ 0.44

Critical accounting estimates

The Corporation has chosen accounting policies that it believes are appropriate
to accurately and fairly report its operating results and financial position,
and the Corporation has applied those policies in a consistent manner.

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America require that the Corporation
make estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses. These estimates and assumptions are based on
historical or other factors believed to be reasonable under the circumstances.
The Corporation evaluates these estimates and assumptions on an ongoing basis
and may retain outside consultants, lawyers and actuaries to assist in its
evaluation. These estimates, assumptions and judgments are based on information
available as of the date of the consolidated financial statements; accordingly,
as this information changes, the consolidated financial statements could reflect
different estimates, assumptions and judgments.

The Corporation considers three accounting policies to be critical because they
involve the most significant judgments and estimates used in preparation of its
consolidated financial statements. The three policies are the determination of
other-than-temporary impairment of securities, the determination of the
allowance for loan losses, and the assessment of goodwill for possible
impairment.

Other-Than-Temporary Impairment of Securities. Valuations for the securities
portfolio are determined using quoted market prices, where available. If quoted
market prices are not available, securities valuation is based on pricing
models, quotes for similar securities, and observable yield curves and spreads.
In addition to valuation, management must assess whether there are any declines
in value below the carrying value of the securities that should be considered
other than temporary or otherwise require an adjustment in carrying value and
recognition of the loss in the Corporation's Consolidated Statements of Income.

Allowance for Loan Losses. The allowance for loan losses represents management's
estimate of probable credit losses inherent in the loan portfolio. Determining
the amount of the allowance for loan losses is considered a critical accounting
estimate because it requires significant judgment and the use of estimates
related to the amount and timing of expected future cash flows on impaired
loans, estimated losses on pools of homogeneous loans based on historical loss
experience, and consideration of current economic trends and conditions, all of
which may be susceptible to significant change. The loan portfolio also
represents the largest asset type on the Corporation's Consolidated Balance
Sheets.



Goodwill. Goodwill represents the excess purchase consideration over the fair
value of net assets acquired in connection with acquisitions. Goodwill is not
amortized but is periodically evaluated for impairment. Impairment testing is
performed using either a qualitative or quantitative approach. The Corporation
has selected September 30 as the date to perform the annual goodwill impairment
test. Additionally, a goodwill impairment evaluation is performed on an interim
basis when events or circumstances indicate impairment potentially exists.

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Contents

ITEM 7A. QUANTITATIVE AND QUALITATIVE INFORMATION ON MARKET RISK

Not required.

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Bristol city center businesses seek recovery from COVID-19 | Latest titles https://utahbbq.org/bristol-city-center-businesses-seek-recovery-from-covid-19-latest-titles/ Fri, 19 Mar 2021 08:43:46 +0000 https://utahbbq.org/bristol-city-center-businesses-seek-recovery-from-covid-19-latest-titles/

Believe in Bristol, an organization that supports inner-city businesses, helped.

“Our organization worked with our two cities to add temporary signage downtown for those offering curbside pickup, making it more efficient and convenient for our community to support these small businesses,” said Maggie Elliott , director of Believe in Bristol.

The organization has served as a communications agent and resource for businesses. Elliott said he has helped with funding, training and provided businesses with updates on reopening phases for both states.

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Believe in Bristol also facilitated the reorganization of the Downtown Revolving Loan Fund, run by People Inc., to be offered to businesses in the form of interest-free, deferred payment loans to help reduce cash flow – which was common for many people. companies in 2020.

Elliott said Believe in Bristol had also set up hand sanitizer stations in the city center, as well as safety reminder signs. He has also worked with the City of Bristol, Tennessee, to provide Outdoor Dining Mini Grants to food and beverage businesses to expand outdoor dining options.

Hester said she recognized early on that locals were “very responsible” and respected masked mandates and social distancing.

“We are extremely grateful for our community and their support,” said Hester, who also manages several Airbnbs that lost business during the pandemic.


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Stock market leverage increases historically: Another WTF chart from zoo that made nuts https://utahbbq.org/stock-market-leverage-increases-historically-another-wtf-chart-from-zoo-that-made-nuts/ Fri, 19 Mar 2021 08:43:46 +0000 https://utahbbq.org/stock-market-leverage-increases-historically-another-wtf-chart-from-zoo-that-made-nuts/

In an investment environment where nothing matters anymore – until it suddenly does.

Through Wolf richter for WOLF STREET.

In the current craze that encompasses everything from sneakers and NFT to stocks, where valuations don’t matter because of the widespread certainty that valuations will be even higher in a few days, and where people are looking for lottery-like returns, backed by the crackdown on interest rates from the Fed and $ 3 trillion in asset purchases, and government billions of dollars in donations and bailouts – well, in this perfect world there’s a fly in the ointment: vast amounts of leverage, including stock market leverage.

Margin debt – the amount that individuals and institutions borrow on their equity holdings according to FINRA’s tracking of its member brokerage firms – is only one indication of stock market leverage. But FINRA reports it every month. Other types of stock market leverage are either not reported at all, or are only disclosed on an ad hoc basis in SEC filings by brokers and banks that lend to their clients on their portfolios, such than securities-based lending (SBL). No one knows how much total market leverage there is. But margin debt is showing the trend.

In February, margin debt jumped another $ 15 billion to $ 813 billion, according to FINRA. Over the past four months, margin debt has climbed $ 154 billion, a historic leap to all-time highs. Compared with February of last year, margin debt skyrocketed by $ 269 billion, or nearly 50%, for another WTF sign that the zoo has gone mad:

But margin debt doesn’t come cheap, especially small amounts. For example, Fidelity charges 8.325% on margin balances below $ 25,000 – in an environment where banks, money market accounts, and treasury bills pay close to 0%. Margin debt becomes cheaper for larger balances, an incentive to borrow more. For margin debt of $ 1 million or more, Fidelity’s interest rate drops to 4.0%

“Whether you need extra cash for short-term financing or to buy more securities, a margin loan can help you get the money you need,” Fidelity says on its website. In other words, take out a margin loan to buy a car or some much-needed bitcoin or NFT.

Each broker has their own margin interest rate schedule. Morgan Stanley charges 7.75% for margin balances less than $ 100,000, compared to 6.875% for Fidelity for balances between $ 50,000 and $ 99,999. For margin balances over $ 50 million, Morgan Stanley charges 3.375%.

And it is risky leverage for the borrower. It seems like risk-free leverage when stocks go up, but when your stocks hurt and fall below a certain level, your broker will ask you to put more money in your account or sell stocks on. the tanking market, which will then allow you to join the legions of forced sellers.

In the past, a sharp increase in margin balances tended to precede historical declines in stock markets:

Over the two-decade period of the graph, the long-term changes in dollar amounts are smaller as the purchasing power of the dollar vis-à-vis stocks has fallen.

But in the short term, the changes show what happens to margin debt in the lead-up to the sale, and what happens during the sale when margin demands turn investors into legions of forced sellers.

Leverage is the great accelerator of stock prices, both up and down. Buying stocks with borrowed money creates buying pressure, and prices rise, and rising prices increase the margin balances a portfolio can support, which encourages more buying of. margin actions.

On the other hand, selling stocks to deal with margin calls adds increased selling pressure in an already declining market. The more the prices fall, the more exhausted forced sellers try to keep up with the margin demands on the sale.

Then, at a magical moment, the margin debt has been sufficiently reduced and its contribution to selling pressure fades.

The historic surge in margin balances in recent months is another indicator of how hyper-speculative and blindly brave the mega-bubble has become. All kinds of new theories are being put forward as to why fundamentals and valuations don’t make sense, and why all asset prices will shoot the moon no matter what.

These theories have run into bloodshed in high-quality treasury bills and corporate bonds with longer maturities as long-term yields have been rising for months, which I discuss in my podcast. . THE WOLF STREET REPORT: Market fads galore, but long-term interest rates smell like a rat

Do you like reading WOLF STREET and want to support it? You use ad blockers – I fully understand why – but want to support the site? You can donate. I really appreciate it. Click on the mug of beer and iced tea to find out how:

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Loans to Coombe and Hotel Indigo accepted but labeled as ‘taxpayer rescue’ https://utahbbq.org/loans-to-coombe-and-hotel-indigo-accepted-but-labeled-as-taxpayer-rescue/ Fri, 19 Mar 2021 08:43:46 +0000 https://utahbbq.org/loans-to-coombe-and-hotel-indigo-accepted-but-labeled-as-taxpayer-rescue/

Multi-million pound cash loans to support the Coombe Abbey Hotel and Indigo Hotel were approved in Coventry – despite criticism they amounted to a ‘taxpayer bailout’.

Council loans have been made for the authority-owned Coombe Abbey Hotel and developer Castlebridge Group for the construction of the Indigo hotel in Friargate.

Coombe has been hit hard by Covid-19 with revenues down 70%, with the authority saying it has exhausted its cash flow and could go out of business without further support.

Advisers have been told Castlebridge is investing £ 16million in the Indigo Hotel at Friargate but need more funding to ensure the start of the four star hotel.

Loan amounts have been kept private, but public council reports show Coombe will have received a £ 5.8million loan as of March 31, which includes a £ 1million loan last year .

Union advisers said the loans would support jobs and the economy.

Only freelance Cllr Glenn Williams voted against the two, exploding the authority to lend money “like it’s old-fashioned,” adding: “It is absolute madness that we find ourselves in a position of having to bail out companies to cover our own evil. investments. ”

Coombe was unable to access government aid Coronavirus Business Interruption Loan Program (CBILS), as it belongs to the board.

Speaking to the plenary council on Tuesday, March 16, finance cabinet member Cllr Richard Brown said: “In short, it’s about putting an arm around a much-loved asset, saving jobs and to allow Coombe to bounce back as fast as possible. ”

Opposition conservatives also supported Coombe ready, but Cllr frontman Gary Ridley said it was done “with very clenched teeth” to ensure that the council’s investment – having bought the site for an advertised price of £ 9.5million in 2017 – not be lost.

But he said the hotel had become a “taxpayer’s drain” since its purchase.

He added: “The irony is that if it was a private company it would have been bailed out by the government and not the Coventry taxpayer.

“We will support this as if we don’t lose it, we will lose everything that has been put so far. In the long run I seriously wonder if we will get the 10% we were promised [when it was purchased]. ”

The Tories opposed a loan to the Indigo Hotel, however, with Cllr Peter Male saying it would “put the authority more at risk – a risk the private sector is unwilling to accept under current market conditions.”

Jobs and Regeneration Cabinet member Cllr Jim O’Boyle said it was a small risk to take to get jobs and a high-quality hotel.

Cllr O’Boyle: “It’s about investing in our future, our city and our people. Failure to do this now would be wasting a massive amount of private investment.

“This is a £ 16million investment and it is estimated that it will bring in £ 40million to the economy by building it.

“This [loan] will be a small amount of money against the backdrop of the £ 16million construction costs and the return will be very generous to the local authority which can then be reinvested in our town’s utilities.

The 100-bed Hotel Indigo will be the first four-star hotel in the city center for almost 50 years. It was hoped to be completed in the spring of 2021, but the work is considerably delayed.

The historic Coombe hopes to open its outdoor patio for afternoon tea next month, before it fully reopens on May 17.

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