construction lending decreased $31,630 during the nine months ended September 30, 2021. Investment securities increased $28,010, or 27.0%, in the nine months ended September 30, 2021. Noninterest-bearing deposits increased $18,956, while interest-bearing deposits increased $35,158 during the nine months ended September 30, 2021. Total stockholders’ equity increased $10,144, to $107,576 at September 30, 2021 from $97,432 at
year-end
2020. The increase in stockholders’ equity was caused primarily by the recognition of net income offset partially by a change in accumulated other comprehensive income. For the nine months ended September 30, 2021, total assets averaged $1,301,414, an increase of $56,838 from $1,244,576 for the same period in 2020.
The Company’s entire investment portfolio is held as
which allows for greater flexibility in using the investment portfolio for liquidity purposes by allowing securities to be sold when favorable market opportunities exist. Investment securities
totaled $131,705 at September 30, 2021, an increase of $28,010, or 27.0%, from $103,695 at December 31, 2020. Activity in the investment portfolio during the nine months of 2021, included purchases of $74,503, sales of $30,442 and repayments of $13,073.
For the nine months ended September 30, 2021, the investment portfolio averaged $139,504, an increase of $64,311 compared to $75,193 for the same period last year. The
tax-equivalent
yield on the investment portfolio decreased 68 basis points to 2.01% for the nine months ended September 30, 2021, from 2.69% for the comparable period of 2020.
Securities
are carried at fair value, with unrealized gains or losses net of deferred income taxes reported in the accumulated other comprehensive income (loss) component of stockholders’ equity. We reported net unrealized losses of $80, net of deferred income tax of $17 at September 30, 2021, and net unrealized gains of $1,962, net of deferred income taxes of $412 at December 31, 2020. The change in the unrealized holding gain was the result of increases in general market rates.
Loans, net, decreased to $866,140 at September 30, 2021 from $1,139,239 at December 31, 2020, a decrease of $273,099, or 24.0%. The decrease in the loan portfolio was attributable to forgiveness payments on PPP loans totaling $247,625 and a decrease in organic loan growth of $44,868, offset partially by the origination of PPP loans of $19,394. Business loans, including commercial and commercial real estate loans, decreased $224,997, or 26.1%, to $636,576 at September 30, 2021 from $861,575 at December 31, 2020. Retail loans, including residential real estate and consumer loans, decreased $16,472, or 8.1%, to $187,790 at September 30, 2021 from $204,262 at December 31, 2020. Construction lending decreased $31,630, or 43.1%, to $41,772 at September 30, 2021 from $73,402 at December 31, 2020. PPP loans, net of unearned loan fees, totaled $23,579 at September 30, 2021 and $251,810 at December 31, 2020.
For the nine months ended September 30, 2021, loans averaged $1,017,390, a decrease of $21,868 compared to $1,039,258 for the same period in 2020. The
tax-equivalent
yield on the loan portfolio was 4.38% for the nine months ended September 30, 2021, a 20 basis point increase from 4.18% for the comparable period last year. The increase in the loan yield was caused by an increase in fees earned on PPP loans. However, the continuation of the low interest rate environment may cause a decline in loan yield as higher yields from payments and prepayments on existing loans are replaced by lower yields originated on new and refinanced loans. Concerns about the spread of
COVID-19
and its anticipated negative impact on economic activity, severely disrupted domestic financial markets prompting the Federal Open Market Committee of the Federal Reserve Board to aggressively cut the target Federal Funds rate by
150-basis
points in the first half of 2020.
In addition to the risks inherent in our loan portfolio in the normal course of business, we are also a party to financial instruments with
off-balance
sheet risk to meet the financing needs of our customers. These instruments include legally binding commitments to extend credit, unused portions of lines of credit and commercial letters of credit made under the same underwriting standards as
on-balance
sheet instruments, and may involve, to varying degrees, elements of credit risk and interest rate risk (“IRR”) in excess of the amount recognized in the consolidated financial statements. With the onset of the
COVID-19
pandemic, we are continually monitoring draws on unused portions of lines of credit and construction loans.
The contractual amounts of
off-balance
sheet commitments at September 30, 2021 and December 31, 2020 are summarized as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unused portions of lines of credit
|
|
$
|
104,774
|
|
|
$
|
92,848
|
|
Construction loans
|
|
|
19,111
|
|
|
|
24,751
|
|
Commitments to extend credit
|
|
|
30,104
|
|
|
|
10,275
|
|
Deposit overdraft protection
|
|
|
17,039
|
|
|
|
18,117
|
|
Standby and performance letters of credit
|
|
|
9,512
|
|
|
|
6,577
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
180,540
|
|
|
$
|
152,568
|
|
|
|
|
|
|
|
|
|
|
24