First Quarter Report March 31, 2016

First Quarter Report March 31, 2016

Dear Shareholders:

Net income for the quarter ended March 31, 2016 totaled $294,000, or $0.61 per share.  This represents a decrease of $27,000 compared with net income reported for the quarter ended March 31, 2015 of $321,000, or $0.64 per share.  The decrease in earnings is mostly attributed to lower noninterest income of $49,000 as a result of nonrecurring fees from trust department executorships.  Net interest income increased by $40,000 due to a $130,000 increase in income and fees earned on loans offset by an $82,000 reduction in interest earned on investment securities.  Noninterest expenses increased $26,000.

Loan balances increased 5% during the most recent quarter and represented a continuation of the growth trend of last year. New loan production totaled $6.8 million with $5.4 million in commercial loans and leases and $1.0 million in residential mortgages.  The bank’s loan portfolio continues to be a more significant component of earnings.

I enjoyed meeting with the shareholders who attended our recent 2016 Annual Meeting.  It is also a pleasure to report that several officers were promoted.  Barbara R. Calizzi is now Executive Vice President, Secretary and Chief Operating Officer.  Robert B. Kastan is Vice President, Treasurer and Chief Financial Officer and Lisa R. Ferguson is Assistant Vice President, Trust Officer. These dedicated individuals are congratulated on their outstanding professional accomplishments.

Please do not hesitate to contact me if you would like further information or if you have any questions.

Sincerely,

Nelson L. Person
President & CEO