Chesapeake Financial Shares Inc (OTCQX:CPKF), which operates as the bank holding company for Chesapeake Bank, reported Tuesday third-quarter earnings of $3.38 million, a 4.8% year-over-year increase.
In a statement, the company said earnings per share were $0.692 fully diluted, compared to $0.649 fully diluted for the third quarter of 2019.
Total assets ended the quarter at $1.17 billion, a 24.2% increase since September 30.
READ: Chesapeake Bank channels Q2 Holdings’ digital banking platform to enhance its customers' banking experience
"We have had a good 2020 thus far," said CEO Jeffrey Szyperski. "Through September 30 we've recognized net income of $8.80 million representing a 7.2% decrease from the first nine months of 2019. Coming off of a record year in 2019, we are very pleased to be where we are at this point in 2020, considering the international effects of COVID-19."
The company said nonperforming assets were 0.868% of total gross loans as of September 30, compared to 0.983% in the year-ago period.
"We have been rigorously reviewing our loan portfolio since March 2020 and have been closely monitoring the effect the pandemic has had on our customers,” the CEO said.
“We have also been adding to our loan loss reserve during 2020. At September 30, 2020, our loan loss reserve was 1.40% of total loans (excluding $76.88 million in Paycheck Protection Program loans) as compared to 0.97% for the previous year. For the year we have provided $1.77 million to the provision for loan losses as compared to $0.96 million for the same period in 2019."
The company said overall 2020 net income has been supported by a 10.2% increase in net interest income and a 66.1% increase in other income primarily driven by strong mortgage loan origination. This increase has offset COVID-related decreases in both merchant services income and cash management fees.
Earlier this year Chesapeake Bank was recognized for the 13th-consecutive year by American Banker magazine as a "Top 200 Community Bank" in the nation based on a three-year average return on equity. Additionally, the bank was recognized for the eighth-consecutive year by the same publication as one of the "Best Banks to Work For."
At its October 15, 2020 meeting, the board declared a $0.125 per share dividend, payable on or about December 15, 2020, to shareholders of record as of December 1.
"We feel this is a very strong dividend given the current market price of our stock. This translates into an approximate 2.46% dividend yield on the current stock price,” said Szyperski.
"This is the fourth consecutive quarter at this dividend rate. Given the increase in total assets and the pending Paycheck Protection Program forgiveness anticipated, we felt holding the dividend constant was prudent.”
Chesapeake Financial Shares is a one-bank holding company originally chartered in 1900 and based in Kilmarnock, Virginia. In addition to Chesapeake Bank, it operates another subsidiary called Chesapeake Wealth Management Inc, which is an independent wealth management firm offering brokerage, trust, and estate management services.
Contact the author: [email protected]
Follow him on Twitter @PatrickMGraham