Stockholder Letter
This past year we saw change and progress for our bank. A full year ago, prior to the rapid rise in interest rates, I told you that we expected moderate asset growth coupled with a noticeable decline in earnings. Well, as normal when I try to predict the future, I was wrong. Our assets declined a bit as our earnings increased with higher interest rates. In addition to higher earnings, we have experienced a marked decrease in problem assets to near zero as well as solid growth in new loans. Plus, our plans to expand into new markets are coming to fruition.
Let me first address the recent turmoil you see in today's banking market and point out to you the differences between your bank and the banks in the news. As you know, Queensborough is a community bank serving the basic financial needs of Augusta, Savannah and the rural counties in between. These economies, and therefore your bank, are not involved in crypto-currency, tech startups or the venture capitalists that created the turmoil to begin with. We focus on the deposits and loans of small businesses that serve our area. The vast majority of our deposits are FDIC insured and virtually all of our loans are to financially capable customers. We are a diversified, sound, profitable, well‐capitalized, conservatively managed community bank. And we plan to stay that way. No specialty finance, no high-tech hocus-pocus, no national lending platform, just plain banking.
That focus on just plain banking resulted in another record year for profits for 2022 topping out at $19,217,000. The change in interest rates was beneficial to us at the start of the rate cycle; however, I expect our deposit rates to increase rapidly this year and so we may very well see a decline in profits despite a robust year of loan growth. We are excited to open a new branch this year in Hinesville, Georgia. I expect that Melissa Deal, our very capable and experienced market leader there will soon be recognized as a leader for the bank as well.
The rising interest rates are designed to slow the national economy and no doubt that will happen. However, we expect the Augusta and Savannah markets will continue to grow beyond the national trend. Your bank is in prime position to take advantage of that growth and we will do all we can to penetrate these markets as we have in the past. If you have the chance, please congratulate your bankers on another year of controlling risks while pushing the bank forward.
You may very well have questions about today's environment as it affects Queensborough National Bank. Please do not hesitate to call me as I am always willing to discuss banking in general and Queensborough in particular.
Read more in the Annual Report