Stockholder Letter
Last year, 2020, saw unusual activity in so many areas I am hard pressed to report the more significant events and their lasting effects on your bank. Let me focus first on the financial results which you can read in the accompanying annual report.
At first glance you can see that our size as measured by total assets jumped significantly from $1.22 billion to $1.65 billion, an increase of approximately 37%. This remarkable increase comes despite the pandemic and despite our branch doors being locked. Much of the growth comes from the several federal stimulus bills and especially from the Payroll Protection Program. But more importantly, we found many businesses who needed our help with the PPP process and most of those businesses from Savannah to Atlanta are now our newest customers. Let me give you an idea of how remarkable this growth truly is — our average branch has about $45 million in assets, thus our organic growth approximates some 10 new branches. And yet we have no new locations. A remarkable change due entirely to the efficiency and dedication of our many talented staff members.
You will next see that our loans increased more than 20% which is also very unusual. This increase is due primarily to the PPP program. You can read a more complete description of our participation in that much welcomed program in Footnote 3 on page 29 of this annual report.
Finally, you may see that our profits are down some 15%. This time last year I reported that the pandemic would likely have a significantly negative effect on our customers and perhaps cause losses in our loan portfolio. In anticipation, we increased our loan reserves by $4.1 million or 32%. I am pleased to report that, thus far, we have not seen the need to increase these reserves further as our Covid-related losses, thanks in large part to the federal stimulus bills, have been minimal.
Beyond our balance sheet and income statement, the pandemic brought in and accelerated other business and cultural changes, not the least of which is working from home. At the height of the pandemic fully 1/3 of our employees, some 125 people, worked remotely thus protecting themselves, their families and others. Additionally, our customers learned to use our mobile banking technologies, and starting this January, learned how to complete transactions via our Integrated Teller Machines, or as we call it, the QNBTNOW team.
A remarkable year, 2020 — the year of Covid. At the moment, millions of people are receiving the vaccine every day, including me. Cases of the disease are down significantly and folks are looking past the pandemic with the usual American fervor for the future. It is hard not to be optimistic about the coming months of recovery and economic growth. I know I am ready!
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