Eagle Financial Bancorp : Financial Reports 12-31-21

Eagle Financial Bancorp, Inc. Announces Cash Dividend, 2021 Annual Meeting Date and Fourth Quarter 2020 Results

CINCINNATI - January 29, 2021, Eagle Financial Bancorp, Inc. (the "Company") (OTCQB: EFBI), the holding company for Eagle Savings Bank, today announced that its Board of Directors declared a cash dividend of $0.05 per common share. The dividend will be paid on or about February 28, 2021, to stockholders of record as of the close of business on February 15, 2021.

The Company also announced today that the 2021 annual meeting of stockholders of Eagle Financial Bancorp, Inc. will be held on April 20, 2021.

The Company announced net income of $754,000, or $0.53 per common share on approximately 1.4 million shares outstanding for the quarter ended December 31, 2020, as compared to $226,000 or $0.15 per common share on approximately 1.5 million shares outstanding for the quarter ended December 31, 2019. The improvement was largely driven by a $1.0 million increase in total non-interest income, and a $37,000 increase in net interest income, offset by a $367,000 increase in total non-interest expense, and a $147,000 increase in income taxes.

Net income for the year ended December 31, 2020 increased $1.4 million to $2.1 million, or $1.43 per common share as compared to $658,000, or $0.43 per common share for the year ended December 31, 2019. The improvement was largely driven by a $2.7 million, or 99.1% increase in total non-interest income, offset by a $290,000 increase in provision for loan losses, a $462,000 increase in non-interest expense, and a $389,000 increase in income taxes.

The increase in net interest income for the three months ended December 31, 2020 was largely driven by a decline in the weighted average yield on total interest bearing liabilities to 0.69% for the quarter ended December 31, 2020 from 1.14% for the comparable 2019 period. This decrease was primarily the result of declining interest rates, especially interest rates on interest bearing liabilities which saw a decline in the weighted average yield of 45 basis points for the quarter ended December 31, 2020 as compared to the quarter ended December 31, 2019.

FINANCIAL HIGHLIGHTS

• Net income of $754,000 for the three months ended December 31, 2020 compared to $226,000 for the comparable period in 2019, representing an increase of $528,000, or 233.6%.
• Net income of $2.1 million for the year ended December 31, 2020 compared to $658,000 for the comparable period in 2019, representing an increase of $1.4 million, or 216.7%.
• Net income before taxes of $959,000 for the three months ended December 31, 2020 compared to $284,000 for the comparable period in 2019, representing an increase of $675,000, or 237.7%.
• Net income before taxes of $2.7 million for the year ended December 31, 2020 compared to $845,000 for the comparable period in 2019, representing an increase of $1.8 million, or 214.8%
• Non-interestincome of $5.5 million for the year ended December 31, 2020 compared to $2.8 million for the comparable period in 2019, representing an increase of $2.7 million, or 99.1%.
• Capital ratios of 15.5%, 17.3% and 18.3% for the Tier 1 Leverage ratio, Tier 1 Risked Based Capital ratio and Total Risked Based Capital ratio, respectively at December 31, 2020.

Comparison of Financial Condition at December 31, 2020 and December 31, 2019

Total assets were $160.4 million at December 31, 2020, an increase of $17.7 million, or 12.4%, over the $142.8 million at December 31, 2019. The increase was primarily due to an increase in loans, net of allowance for loan losses of $12.8 million and an increase in loans held for sale of $7.6 million, offset by a decrease in interest-bearing time deposits in other banks of $2.7 million. The increase in assets was funded primarily by a $16.4 million increase in deposits.

Net loans totaled $119.4 million at December 31, 2020, as compared to $106.6 million at December 31, 2019, an increase of $12.8 million or 12.0%. During the year ended December 31, 2020, we originated $210.6 million of loans, $167.2 million of which were one- to four-family residential real estate loans, and sold $147.4 million of loans in the secondary market. During the year ended December 31, 2020, one- to four-family residential real estate loans decreased $581,000, or 1.0%, to $59.3 million, multi-family loans increased $287,000, or 27.0%, to $1.4 million, commercial real estate loans and land loans increased $69,000, or 0.3%, to $20.9 million, construction loans decreased $1.0 million, or 8.7%, to $10.7 million, home equity and other consumer loans decreased $2.5 million, or 25.9% to $7.2 million, and commercial loans increased $19.7 million, or 332.2% to $25.6 million, of which $20.4 million was due to loans made under the Small Business Administration's Payment Protection Program (or "PPP"). Management continues to emphasize the origination of high quality loans for retention in the loan portfolio.

Deposits increased by $16.4 million, or 14.7%, to $128.4 million at December 31, 2020 from $112.0 million at December 31, 2019. Our core deposits, which are all deposits other than certificates of deposit, increased $21.3 million, or 33.1%, to $85.7 million at December 31, 2020 from $64.4 million at December 31, 2019. Certificates of deposit decreased $4.9 million, or 10.2%, to $42.7 million at December 31, 2020 from $47.6

million at December 31, 2019. During the year ended December 31, 2020, management continued its strategy of pursuing growth in demand accounts and other lower cost core deposits. Management intends to continue its efforts to increase core deposits, with a special emphasis on growth in consumer and business demand deposits.

Shareholders' equity increased $1.1 million, or 4.0%, to $29.0 million at December 31, 2020 from $27.9 million at December 31, 2019. The increase resulted from net income of $2.1 million during the year ended December 31, 2020, expense of $104,000 related to the ESOP shares committed to be released and expense of $246,000 related to stock-based compensation, offset by a repurchase of 68,305 shares of common stock for $1.1 million and dividends paid of $232,000.

EAGLE FINANCIAL BANCORP, INC.

STATEMENTS OF CONDITION

December 31, 2020 (Unaudited) and December 31, 2019 (Audited)

(In Thousands)

ASSETS	12/31/2020		12/31/2019
Cash and cash equivalents	$	13,585			15,301
Interest-bearing time deposits in other banks		249			2,988
Loans held for sale		14,020			6,390
Loans		120,784			107,734
Less: Allowance for loan losses		(1,386)		(1,166)
Loans, net		119,398			106,568
Premises and equipment, net		4,098				4,062
Other assets		9,095				7,479
Total Assets
$	160,445		$	142,788
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing	$	7,410			$	5,967
Interest bearing		121,030				106,024
Total Deposits		128,440				111,991
Other Liabilities		2,989				2,894
Total Liabilities		131,429				114,885
Total Shareholders' Equity		29,016					27,903
Total Liabilities and Shareholders' Equity	$	160,445			$	142,788

Comparison of Operating Results for the Three Months Ended December 31, 2020 and December 31, 2019

General. Our net income for the three months ended December 31, 2020 was $754,000, compared to a net income of $226,000 for the three months ended December 31, 2019, an increase of $528,000, or 233.6%. The increase in net income was primarily due to a $1.0 million increase in noninterest income, primarily the result of an $879,000 increase in net gain on loan sales, and a $37,000 increase in net interest income, offset by a $367,000 increase in total non-interest expense, and a $147,000 increase in income taxes.

Interest Income. Interest income decreased $56,000, or 4.2%, to $1.27 million for the three months ended December 31, 2020 from $1.33 million for the three months ended December 31, 2019. This decrease was primarily attributable to a $68,000 decrease in dividend income on Federal Home Loan Bank ("FHLB") stock and interest income on other interest earning deposits, offset by an increase of $12,000 on interest on loans. The average balance of interest earning assets increased $7.7 million for the three months ended December 31, 2020, or 6.1%, from the average balance for the three months ended December 31, 2019, while the average yield on interest earning assets decreased by 41 basis points to 3.78% for the three months ended December 31, 2020 from 4.19% for the three months ended December 31, 2019.

Interest Expense. Total interest expense decreased $93,000, or 31.0%, to $207,000 for the three months ended December 31, 2020 from $300,000 for the three months ended December 31, 2019. This decrease is primarily the result of a decrease in deposit interest rates for the three months ended December 31, 2020. The average balance of deposits for the three months ended December 31, 2020 increased by $13.6 million, or 12.9% from the average balance for the three months ended December 31, 2019, while the average cost of deposits decreased by 45 basis points to 0.69% for the three months ended December 31, 2020 from 1.14% for the three months ended December 31, 2019.

Net Interest Income. Net interest income increased $37,000, or 3.6%, to $1.1 million for the three months ended December 31, 2020, compared to $1.0 million for the three months ended December 31, 2019. The increase reflected an increase in interest on loans of $12,000, and a decrease in

total interest expense of $93,000, offset by a decrease in dividend income on Federal Home Loan Bank ("FHLB") stock and interest income on other interest earning deposits of $68,000. Our net interest margin decreased to 3.17% for the three months ended December 31, 2020 from 3.24% for the three months ended December 31, 2019. Our net interest rate spread increased to 3.09% for the three months ended December 31, 2020 from 3.05% for the three months ended December 31, 2019.

Provision for Loan Losses. No provision expense was recorded for the three months ended December 31, 2020. No provision was recorded for the same period ended December 31, 2019. The allowance for loan losses was $1.4 million, or 1.08% of total loans, at December 31, 2020, compared to $1.2 million, or 1.02% of total loans, at December 31, 2019. Total nonperforming loans were $1.0 million at December 31, 2020, compared to $1.1 million at December 31, 2019.

Non-InterestIncome. Non-interest income increased $1.0 million, or 113.6%, to $1.9 million for the three months ended December 31, 2020 from $885,000 for the three months ended December 31, 2019. The increase was primarily due to a $879,000 increase in the net gain on sale of loans during the three months ended December 31, 2020 as compared to the three months ended December 31, 2019.

Non-InterestExpense. Non-interest expense increased $367,000, or 22.6%, to $2.0 million for the three months ended December 31, 2020, compared to $1.6 million for the three months ended December 31, 2019. The increase was primarily the result of an increase in compensation and employee benefits of $282,000, and an increase in foreclosed real estate expenses of $47,000.

Federal Income Taxes. Federal income taxes increased by $147,000 to an income tax expense of $205,000 for the three months ended December 31, 2020, compared to an income tax expense of $58,000 for the three months ended December 31, 2019. The increase in income tax expense for the three months ended December 31, 2020 was a direct result of the increase in gain on loans sales, and the resulting increase in net income.

Comparison of Operating Results for the Year Ended December 31, 2020 and December 31, 2019

General. Our net income for the year ended December 31, 2020 was $2.1 million, compared to a net income of $658,000 for the year ended December 31, 2019, an increase of $1.4 million, or 216.7%. The increase in net income was due to an increase in non-interest income of $2.7 million, offset by an increase in provision for loan losses of $290,000, a decrease in net interest income of $182,000, and an increase in income taxes of $389,000 for the year ended December 31, 2020 as compared to the year ended December 31, 2019.

Interest Income. Interest income decreased $281,000, or 5.2%, to $5.1 million for the year ended December 31, 2020 from $5.4 million for the year ended December 31, 2019. This decrease was attributable to a $83,000 decrease in interest income on loans receivable, a decrease on FHLB stock dividends of $25,000, and a decrease in interest income on other interest-earning deposits of $173,000. The average balance of loans for the year ended December 31, 2020 increased by $7.9 million, or 7.1%, from the average balance for the year ended December 31, 2019, but the average yield on loans decreased by 38 basis points to 4.25% for the year ended December 31, 2020 from 4.63% for the year ended December 31, 2019, resulting from approximately $22.3 million in loans originated under the SBA Paycheck Protection Program at reduced interest rates. The average balance of interest earning deposits increased $493,000, however, the average yield on those deposits decreased by 138 basis points to 0.68% for the year ended December 31, 2020 from 2.06% for the year ended December 31, 2019.

Interest Expense. Total interest expense decreased $99,000, or 9.0%, to $1.0 million for the year ended December 31, 2020 from $1.1 million for the year ended December 31, 2019. Interest expense on deposit accounts decreased $103,000, or 9.3%, to $1.0 million for the year ended December 31, 2020 from $1.1 million for the year ended December 31, 2019. The average balance of deposits during the year ended December 31, 2020 increased by $10.9 million, or 10.6% from the average balance for the year ended December 31, 2019, while the average cost of deposits decreased by 19 basis points to 0.88% for the year ended December 31, 2020 from 1.07% for the year ended December 31, 2019.

Interest expense on FHLB advances totaled $4,000 for the year ended December 31, 2020. The average balance of FHLB advances during the year ended December 31, 2020 increased by $1.4 million from the average balance for the year ended December 31, 2019, and the average cost of FHLB advances increased by 28 basis points to 0.28% for the year ended December 31, 2020.

Net Interest Income. Net interest income decreased $182,000, or 4.2, to $4.1 million for the year ended December 31, 2020, compared to $4.3 million for the year ended December 31, 2019. The decrease reflected a decrease in total interest and dividend income of $281,000, and a decrease in total interest expense of $99,000. Our net interest margin decreased to 3.09% for the year ended December 31, 2020 from 3.44% for the year ended December 31, 2019. Our net interest rate spread decreased to 2.98% for the year ended December 31, 2020 from 3.26% for the year ended December 31, 2019. The interest rate spread and net interest margin were impacted by declining interest rates in the year ended December 31, 2020.

Provision for Loan Losses. We recorded a $290,000 provision for loan losses for the year ended December 31, 2020, as compared to $0 for the year ended December 31, 2019. The allowance for loan losses was $1.4 million, or 1.08% of total loans, at December 31, 2020, compared to $1.2 million, or 1.02% of total loans, at December 31, 2019. Total nonperforming loans were $1.0 million at December 31, 2020, compared to $1.1 million at December 31, 2019. Classified loans increased to $2.8 million at December 31, 2020, compared to $1.4 million at December 31, 2019. Total loans past due 30 days or more were $2.4 million and $952,000 at December 31, 2020 and December 31, 2019, respectively. Net charge-offs totaled $69,000 for the year ended December 31, 2020, compared to $21,000 of net loan charge-off for the year ended December 31, 2019. The allowance for loan losses reflects the estimate we believe to be appropriate to cover incurred probable losses which were inherent in the loan portfolio at December 31, 2020 and 2019. While we believe the estimates and assumptions used in our determination of the adequacy of the allowance are reasonable, such estimates and assumptions could be proven incorrect in the future, and the actual amount of future provisions may

exceed the amount of past provisions, and the increase in future provisions that may be required may adversely impact our financial condition and results of operations. In addition, bank regulatory agencies periodically review our allowance for loan losses and may require an increase in the provision for possible loan losses or the recognition of further loan charge-offs, based on judgments different than those of management.

Non-InterestIncome. Non-interest income increased $2.7 million, or 99.1%, to $5.5 million for the year ended December 31, 2020 from $2.8 million for the year ended December 31, 2019. The increase was primarily due to an increase in the net gain on sale of loans of $2.6 million, and a $173,000 increase in other service charges and fees during the year ended December 31, 2020 as compared to the year ended December 31, 2019.

Non-InterestExpense. Non-interest expense increased $462,000, or 7.4%, to $6.7 million for the year ended December 31, 2020, compared to $6.2 million for the year ended December 31, 2019. The increase was primarily the result of an increase in compensation and employee benefits of $478,000, offset by a $127,000 decrease in other operating expenses.

Federal Income Taxes. Federal income taxes increased by $389,000 to an income tax expense of $576,000 for the year ended December 31, 2020, compared to an income tax expense of $187,000 for the year ended December 31, 2019. The increase in income tax expense for the year ended December 31, 2020 was a direct result of the increase in gain on loans sales, and the resulting increase in net income.

EAGLE FINANCIAL BANCORP, INC.

STATEMENTS OF INCOME

Three Months and Year End December 31, 2020 and 2019 (Unaudited) (In Thousands, except share and per share data)

	Three Months	Three Months		Year		Year
		Ended		Ended		Ended		Ended
	12/31/2020	12/31/2019	12/31/2020	12/31/2019
Total interest income	$	1,270		$	1,326		$	5,122	$	5,403
Total interest expense		207				300				1,006		1,105
Net interest income
	1,063			1,026			4,116		4,298
Provision for loan losses		---				----				290			----
Net interest income after
provision for loan loss		1,063			1,026			3,826		4,298
Total non-interest income		1,890			885				5,524		2,775
Compensation and benefits		1,436			1,154			4,770		4,292
Occupancy and equipment		90				68				307			255
Data processing		108				80				369			317
Legal and professional fees		99				98				358			359
FDIC Premium Expense		9				---				24			16
Other operating expenses		252				227				862			989
Total non-interest expense		1,994			1,627			6,690		6,228
Net Income Before Taxes		959				284				2,660		845
Provision for income taxes		205				58				576			187
Net Income	$	754			$	226			$	2,084	$	658
Basic and Diluted Earnings per Share	$	0.53		$	0.15		$	1.43	$	0.43
Weighted-average shares outstanding
Basic and Diluted		1,397,438			1,460,358	1,423,564	1,475,876

EAGLE FINANCIAL BANCORP, INC.

OTHER FINANCIAL INFORMATION

(In Thousands) (Unaudited)

	12/31/2020	9/30/2020	6/30/2020	3/31/2020	12/31/19
Asset Quality
Allowance for Loan Losses	$	1,386	$ 1,386	$ 1,319	$	1,196	$ 1,166
Nonperforming Loans/Total Loans		0.79%	0.90%	0.77%		1.09%	0.74%
Nonperforming Assets/Total Assets		0.65%	1.05%	1.08%		1.06%	0.80%
ALLL / Nonperforming Loans		136.69%	115.5%	105.94%		115.67%	101.83%
ALLL / Loans, Gross		1.08%	1.04%	0.98%		1.05%	1.02%
Profitability (For the three months ended)
Yield on Average Earning Assets		3.78%	3.86%	3.88%		4.00%	4.19%
Cost of Avg. Interest Bearing Liabilities		0.69%	0.94%	0.92%		1.08%	1.14%
Net Spread		3.09%	2.89%	2.96%		2.92%	3.05%
Net Margin		3.17%	3.00%	3.08%		3.10%	3.24%
	12/31/2020	9/30/2020	6/30/2020	3/31/2020	12/31/19
Capital (Bank Only)
Tier 1 Capital Ratio		15.5%	15.3%	14.7%		15.7%	15.4%
Tier 1 Risk Based Capital Ratio		17.3%	17.2%	17.1%		16.3%	16.3%
Total Risk Based Capital Ratio		18.3%	18.2%	18.1%		17.2%	17.2%

Coronavirus Disease 2019 (COVID-19) Impact

Loan Modifications

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law by the President on March 27, 2020. The CARES Act provides financial institutions the option of temporarily not accounting for eligible loans as troubled debt restructurings in accordance with GAAP. In addition, Interagency Statements were issued on March 22, 2020 and April 7, 2020 by bank regulatory agencies to encourage financial institutions to work prudently with borrowers. The agencies confirmed with the FASB that loans that were not more than 30 days past due as of December 31, 2019 and receive short-term modifications of six months or less, are not considered to be delinquent or troubled debt restructurings and are not reported as nonaccrual.

We began receiving requests from borrowers for loan deferrals in March 2020. Modifications include the deferral of principal and interest for generally 90 days. Requests were evaluated individually and approved modifications were based on the unique circumstances of each borrower. We are committed to working with our clients to allow time to work through the challenges of this pandemic. The Company will be using the provisions of the CARES Act and the Interagency Statements to account for the loans receiving forbearance, which means the loans will remain on accrual status unless the borrower is unable to satisfy the terms of the loans once the forbearance period ends. At this time, it is uncertain what future impact loan modifications related to COVID-19 difficulties will have on our financial condition, results of operations and reserve for loan losses. The following table shows coronavirus (COVID-19) loan modifications outstanding at December 31, 2020. Of these modifications, all were performing in accordance with their modified terms. Details with respect to actual modifications are as follows:

	Number
Types of Loans	of Loans	Balance (in thousands)
Non-Residential mortgage loans……………………………..…	1	$1,732
Commercial loans…………………………………………………….	2	1,148
Total……………………………………………………………………	3	$2,880

Paycheck Protection Program (PPP)

As part of the CARES Act, approved by the President on March 27, 2020, the Small Business Administration (SBA) was authorized to guarantee loans made under the PPP through June 30, 2020 for small businesses who meet the necessary eligibility requirements in order to keep their workers on the payroll. At December 31, 2020, the Bank has 64 loans for $20.4 million of loans under the PPP. At December 31, 2020, the Bank has recognized interest and fees on these loans of $374,000. As of December 31, 2020 the SBA has forgiven 20 PPP loans for $2.0 million.

This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements can be identified by the use of words such as "estimate," "project," "believe," "intend," "anticipate," "assume," "plan," "seek," "expect," "will," "may," "should," "indicate," "would," "contemplate," "continue," "target" and words of similar meaning. These forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;
• statements regarding our business plans, prospects, growth and operating strategies;
• statements regarding the asset quality of our loan and investment portfolios; and
• estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date of this report.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

• our ability to continue to manage our operations successfully;
• effect of the Coronavirus Disease 2019 (COVID-19) pandemic on our Company, the communities where we have our branches, the state of Ohio and the United States, related to the economy and overall financial stability, which may also exacerbate the effects of the other factors listed herein;
• our ability to successfully implement our business plan of managed growth, diversifying our loan portfolio and increasing mortgage banking operations to improve profitability;
• our success in increasing our commercial business, commercial real estate, construction and home equity lending;
• adverse changes in the financial industry, securities, credit and national local real estate markets (including real estate values);
• significant increases in our loan losses, including as a result of our inability to resolve classified and non-performing assets or reduce risks associated with our loans, and management's assumptions in determining the adequacy of the allowance for loan losses;
• credit risks of lending activities, including changes in the level and trend of loan delinquencies and write-offs and in our allowance for loan losses and provision for loan losses;
• the use of estimates in determining fair value of certain of our assets, which may prove to be incorrect and result in significant declines in valuations;
• competition among depository and other financial institutions;
• our ability to attract and maintain deposits and our success in introducing new financial products;
• our ability to maintain our asset quality even as we increase our commercial business, commercial real estate, construction, and home equity lending;
• changes in interest rates generally, including changes in the relative differences between short term and long term interest rates and in deposit interest rates, that may affect our net interest margin and funding sources;
• fluctuations in the demand for loans, which may be affected by the number of unsold homes, land and other properties in our market areas and by declines in the value of real estate in our market area;
• changes in consumer spending, borrowing and saving habits;
• declines in the yield on our assets resulting from the current low interest rate environment;
• risks related to a high concentration of loans secured by real estate located in our market area;
• the results of examinations by our regulators, including the possibility that our regulators may, among other things, require us to increase our allowance for loan losses, write down assets, change our regulatory capital position, limit our ability to borrow funds or maintain or increase deposits, or prohibit us from paying dividends, which could adversely affect our dividends and earnings;
• changes in the level of government support of housing finance;
• our ability to enter new markets successfully and capitalize on growth opportunities;
• changes in laws or government regulations or policies affecting financial institutions, including the Dodd-Frank Act and the JOBS Act, which could result in, among other things, increased deposit insurance premiums and assessments, capital requirements, regulatory fees and compliance costs, particularly the new capital regulations, and the resources we have available to address such changes;
• changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission and the Public Company Accounting Oversight Board;
• changes in our compensation and benefit plans, and our ability to retain key members of our senior management team and to address staffing needs in response to product demand or to implement our strategic plans;
• loan delinquencies and changes in the underlying cash flows of our borrowers;
• our ability to control costs and expenses, particularly those associated with operating as a publicly traded company;
• the failure or security breaches of computer systems on which we depend;

• the ability of key third-party service providers to perform their obligations to us;
• changes in the financial condition or future prospects of issuers of securities that we own; and
• other economic, competitive, governmental, regulatory and operational factors affecting our operations, pricing, products and services described elsewhere in our SEC filings.

Given its ongoing and dynamic nature, it is difficult to predict the full impact of the COVID-19 outbreak on our business. The extent of such impact will depend on future developments, which are highly uncertain, including when the coronavirus that has caused the COVID-19 pandemic can be controlled and abated and when and how the economy may be reopened. As the result of the COVID-19 pandemic and the related adverse local and national economic consequences, our forward-looking statements are subject to the following additional risks, uncertainties and assumptions:

• demand for our products and services may decline;
• if the economy is unable to substantially reopen, and high levels of unemployment continue for an extended period of time, loan delinquencies, problem assets, and foreclosures may increase;
• collateral for loans, especially real estate, may decline in value;
• our allowance for loan losses may have to be increased if borrowers experience financial difficulties;
• the net worth and liquidity of loan guarantors may decline;
• as the result of the decline in the Federal Reserve Board's target federal funds rate to near 0%, the yield on our assets may decline to a greater extent than the decline in our cost of interest-bearing liabilities;
• a material decrease in net income or a net loss over several quarters could result in a decrease in the rate of our quarterly cash dividend;
• actions taken by the federal, state or local governments to cushion the impact of COVID-19 on consumers and businesses may have a negative impact on us and our business;
• our cyber security risks are increased as the result of an increase in the number of employees working remotely; and
• FDIC premiums may increase if the agency experiences additional resolution costs.

Because of these and a wide variety of other uncertainties our actual future results may be materially different from the results indicated by these forward-looking statements.

Contacts:

Gary Koester, President & Chief Executive Officer Patricia Walter, Executive Vice President

Kevin Schramm, Vice President & Chief Financial Officer [phone]