Exhibit 99.1

 

 

August 20, 2021

 

 

Dear Shareholder:

 

The second quarter of 2021 has come to a close and Uwharrie Capital Corp’s continued growth and strong earnings has allowed our mission of making a difference® to continue in the communities we serve. Those communities are defined by more than geography, they are defined by people who share our values. Our mission is to empower ourselves with the financial literacy and capital resources necessary to sustain our desired future of economic prosperity.  

 

While 2020 was a year of endurance and adaptation, 2021 has been a year of positioning for the future. For the first six months of 2021, your Company’s earnings were $6.2 million, an increase of $4.3 million or 221% when compared to the same period in 2020. Several factors contributed to this large variance. The risk and uncertainty associated with the effects of COVID-19 in early 2020 required a $1.4 million increase in provision for loan losses. Your Company, during 2021, recognized an increase in interest income from the forgiveness of the Small Business Administration (SBA) Paycheck Protection Program (PPP) loans. Further, cost of funds for Uwharrie Bank remain low, relative to peers, as a result of our strong base of core deposits. Additionally, our other strategic business units, Uwharrie Bank Mortgage and Uwharrie Investment Advisors experienced increases in revenue from growth in their customer base and favorable markets.

 

Net Income Available to Common Shareholders after dividends for June 30, 2021 was $5.9 million, compared to $1.6 million reported for the same period in 2020, an increase of 258%. Earnings per share of common stock for the six months ended June 30, 2021 was $0.84 compared to $0.23 for the same period in 2020.

 

Assets increased from $748.2 million at June 30, 2020 to $845.3 million at June 30, 2021, a 12.98% growth in assets. The strong growth in both our balance sheet and earnings contributed to higher levels of capital, which better prepares your Company for any future uncertainties.

 

Henry Ford reminds us not to be complacent with current thinking in his famous quote, “If I had asked people what they wanted, they would have said faster horses.” We work hard to understand the needs of our communities and the people we serve. However, just like the mode of transportation changed at the turn of the 20th Century, so is the mode of financial services delivery at the turn of the 21st Century. While our founding purpose remains unchanged, our methods have evolved so that we remain relevant in fulfilling our mission now and in the future. Working together with a common set of values we are making a difference®.

 

Thank you for being a part of our family, as together we continue to work to make the communities we serve a better place.

 


 

For more information on Uwharrie Capital Corp and its subsidiaries and to find out how we are making a difference® please visit us at www.uwharrie.com or follow us on Facebook, Instagram and Twitter.

 

Sincerely,

 

UWHARRIE CAPITAL CORP

 

 

 

/s/ Roger L. Dick

 

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This Report may contain, among other things, certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, (i) statements regarding certain of the Company's goals and expectations with respect to earnings, income per share, revenue, expenses and the growth rate in such items, as well as other measures of economic performance, including statements relating to estimates of credit quality trends, and (ii) statements preceded by, followed by or that include the words “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “projects,” “outlook,” or similar expressions. These statements are based upon the current belief and expectations of the Company‘s management and are subject to significant risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company’s control).


Uwharrie Capital Corp and Subsidiaries

 

 

 

 

 

 

 

Consolidated Balance Sheets (Unaudited)

 

 

 

 

 

 

 

 

June 30,

 

 

June 30,

 

(Amounts in thousands except share and per share data)

2021

 

 

2020

 

 

 

 

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Cash and due from banks

$

5,069

 

 

$

5,922

 

Interest-earning deposits with banks

 

122,001

 

 

 

106,010

 

Securities available for sale

 

200,148

 

 

 

110,593

 

Securities held to maturity (fair value $29,282 and $28,357, respectively)

 

27,803

 

 

 

27,344

 

Equity securities, at fair value

 

411

 

 

 

1,234

 

Loans held for sale

 

10,394

 

 

 

4,369

 

Loans held for investment

 

438,053

 

 

 

454,856

 

     Less: Allowance for loan losses

 

(4,174

)

 

 

(3,426

)

     Net loans held for investment

 

433,879

 

 

 

451,430

 

Interest receivable

 

2,171

 

 

 

2,284

 

Premises and equipment, net

 

16,451

 

 

 

16,728

 

Restricted stock

 

921

 

 

 

1,166

 

Bank-owned life insurance

 

9,000

 

 

 

8,866

 

Other real estate owned

 

-

 

 

 

359

 

Other assets

 

17,012

 

 

 

11,941

 

     Total assets

$

845,260

 

 

$

748,246

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

     Demand, noninterest-bearing

$

235,335

 

 

$

205,643

 

     Interest checking and money market accounts

 

368,870

 

 

 

338,508

 

     Savings accounts

 

87,074

 

 

 

66,221

 

     Time deposits, $250,000 and over

 

19,979

 

 

 

9,678

 

     Other time deposits

 

48,035

 

 

 

54,048

 

          Total deposits

 

759,293

 

 

 

674,098

 

Interest payable

 

12

 

 

 

29

 

Short-term borrowed funds

 

1,271

 

 

 

499

 

Long-term debt

 

9,992

 

 

 

10,992

 

Other liabilities

 

13,132

 

 

 

9,973

 

     Total liabilities

 

783,700

 

 

 

695,591

 

 

 

 

 

 

 

 

 

Shareholders' Equity

 

 

 

 

 

 

 

Common stock, $1.25 par value:  20,000,000 shares authorized;

 

 

 

 

 

 

 

     issued and outstanding or in process of issuance

 

 

 

 

 

 

 

     6,964,242 and 6,970,141 shares, respectively.

 

 

 

 

 

 

 

     Book value per share $7.31 in 2021 and $5.91 in 2020 (1)

 

8,705

 

 

 

8,713

 

Additional paid-in capital

 

12,030

 

 

 

12,250

 

Undivided profits

 

28,907

 

 

 

17,874

 

Accumulated other comprehensive income (loss)

 

1,263

 

 

 

3,163

 

     Total Uwharrie Capital Corp shareholders' equity

 

50,905

 

 

 

42,000

 

Noncontrolling interest

 

10,655

 

 

 

10,655

 

     Total shareholders' equity

 

61,560

 

 

 

52,655

 

     Total liabilities and shareholders' equity

$

845,260

 

 

$

748,246

 

 

 

 

 

 

 

 

 

(1) Net income per share, book value per share and weighted average shares outstanding have been adjusted to reflect the 2% stock dividend in 2020.

 

 

 

 

 

 

 


 

Uwharrie Capital Corp and Subsidiaries

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Statements of Income (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

(Amounts in thousands except share and per share data)

2021

 

2020

 

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

5,335

 

$

5,031

 

 

$

11,397

 

$

9,584

 

Interest on investment securities

 

922

 

 

764

 

 

 

2,001

 

 

1,355

 

Interest-earning deposits with banks and federal funds sold

 

27

 

 

38

 

 

 

43

 

 

590

 

Total interest income

 

6,284

 

 

5,833

 

 

 

13,441

 

 

11,529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest paid on deposits

 

175

 

 

372

 

 

 

386

 

 

1,100

 

Interest paid on borrowed funds

 

133

 

 

145

 

 

 

270

 

 

277

 

Total interest expense

 

308

 

 

517

 

 

 

656

 

 

1,377

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

5,976

 

 

5,316

 

 

 

12,785

 

 

10,152

 

Provision for (recovery of) loan losses

 

(141

)

 

767

 

 

 

(175

)

 

1,399

 

Net interest income after provision for (recovery of) loan losses

 

6,117

 

 

4,549

 

 

 

12,960

 

 

8,753

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges on deposit accounts

 

240

 

 

209

 

 

 

482

 

 

522

 

Interchange and card transaction fees

 

339

 

 

182

 

 

 

558

 

 

374

 

Other service fees and commissions

 

800

 

 

558

 

 

 

1,430

 

 

1,323

 

Gain on sale of securities

 

51

 

 

-

 

 

 

991

 

 

58

 

Realized/unrealized gain (loss) on equity securities

 

7

 

 

102

 

 

 

(12

)

 

333

 

Income from mortgage banking

 

2,069

 

 

3,701

 

 

 

7,175

 

 

4,766

 

Other income (loss)

 

668

 

 

(324

)

 

 

657

 

 

58

 

Total noninterest income

 

4,174

 

 

4,428

 

 

 

11,281

 

 

7,434

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

5,233

 

 

5,030

 

 

 

10,622

 

 

9,454

 

Occupancy expense

 

460

 

 

416

 

 

 

886

 

 

831

 

Equipment expense

 

165

 

 

179

 

 

 

337

 

 

362

 

Data processing

 

165

 

 

162

 

 

 

330

 

 

320

 

Other operating expenses

 

2,229

 

 

1,159

 

 

 

4,222

 

 

2,776

 

Total  noninterest expense

 

8,252

 

 

6,946

 

 

 

16,397

 

 

13,743

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

2,039

 

 

2,031

 

 

 

7,844

 

 

2,444

 

Provision for income taxes

 

435

 

 

429

 

 

 

1,657

 

 

514

 

Net Income

$

1,604

 

$

1,602

 

 

$

6,187

 

$

1,930

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated net income

$

1,604

 

$

1,602

 

 

$

6,187

 

$

1,930

 

  Less: Net income attributable to noncontrolling interest

 

(141

)

 

(141

)

 

 

(280

)

 

(282

)

Net income attributable to Uwharrie Capital Corp and common shareholders

$

1,463

 

$

1,461

 

 

$

5,907

 

$

1,648

 

Net Income Per Common Share (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

     Basic

$

0.21

 

$

0.21

 

 

$

0.84

 

$

0.23

 

     Assuming dilution

$

0.21

 

$

0.21

 

 

$

0.84

 

$

0.23

 

Weighted Average Common Shares Outstanding (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

     Basic

 

7,014,214

 

 

7,123,163

 

 

 

7,032,401

 

 

7,166,134

 

     Assuming dilution

 

7,014,214

 

 

7,123,163

 

 

 

7,032,401

 

 

7,166,134

 

 

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