Stockholder Letter
As reported to you in my dividend letter in January of this year, 2021 was a very good year for The Queensborough Company. We continued our remarkable organic growth with assets increasing by 24% year over year to $2,072,325. Over the last two years Queensborough has grown from $1.2 billion to over $2.0 billion in total assets or 69% in two years. To put that $800 million growth into perspective, our average branch is about $50 million in assets. Thus, we grew the equivalent of 15-16 branches without the expense of new buildings, personnel or overhead costs. For another view, of the roughly 150 banks in the state of Georgia approximately 120 banks are less than $800 million. It is not unusual for a community bank like Queensborough to grow rapidly through mergers or acquisitions, but organic growth like this rarely occurs and is a testament to the dedication and commitment of all of our bankers.
The quick increase in our balance sheet starts with new deposit customers. Our loan customers and outstanding balances, however, have not grown as rapidly as the deposits. And I see that as a good thing. One of the axioms in community banking is that rapid loan growth often leads to unforeseen risks in the loan portfolio. Being wary of potential risks keeps our loans growing at a very modest pace and keeps our risks transparent and manageable. In fact, our loan balances barely changed at all during the year as many of the Paycheck Protection Plan (PPP) loans from last year were repaid.
Earnings for the year, driven by very good credit experience and lower pandemic related costs, increased by more than 50% to $18,948,000. Also, a good portion of the increase in earnings came from large scale mortgage refinancing, which we expect to dissipate in 2022 as this activity will no doubt be negatively affected by the increasing interest rates.
The remaining months of 2022 will bring about more interest rate increases and more uncertainties in our local economy and in the world at large. Hopefully leaders at home and abroad can avoid a wide-scale war in Europe and we can keep the US economy chugging along. Rest assured that no matter the course of events, your management team will be diligent in controlling risks while pushing the bank forward.
As always I am happy to discuss any questions or thoughts you may have about banking in general or The Queensborough Company specifically.
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