Traditions Bancorp sees decline in second quarter earnings

York-based Traditions Bancorp reported net income of $1.5 million for the second quarter, a 22% decrease from the second quarter 2021.  

The bank, in a press release, said the decrease in the quarter ended June 20 was caused by a $1.3 million decline in mortgage banking gains on the sale of loans due to waning home inventories and intense inflation pressure on mortgage rates.  

The second quarter 2022 earnings compared to $1.5 million in the first quarter and $2 million for the second quarter 2021. 

However, the company said favorable offsets to the trend in residential mortgage gains include continued strength in commercial loan production, retention of higher-yielding adjustable-rate residential mortgage loans, improved variable rate loan yields associated with the Federal Reserve Bank’s recent short-term interest rate increases, and prudent management of loan funding costs.  

These factors resulted in a 16% increase in net interest income compared to the second quarter of 2021, the press release said.  

On a per share basis, the company reported 54 cents earnings per share (diluted) for the second quarter ended June 30, 2022, compared to 52 cents per share in the linked quarter and 62 cents per share for the second quarter of 2021.  

Due to unrealized investment portfolio losses, Accumulated Other Comprehensive Loss was $9.7 million at quarter-end. It resulted in a book value per common share of $20.37 on June 30, 2022, versus $21.46 in the linked quarter and $22.08 for the second quarter of 2021. 

“Traditions Bancorp continues to successfully navigate the headwinds of economic uncertainty and record inflation by focusing on its core strategies of generating superior business loan growth, optimizing balance sheet mix to take advantage of the recent increase in interest rates, prudently managing funding costs in a rising rate environment, and maintaining credit underwriting discipline,” said Eugene J. Draganosky, president and CEO.  

“In the second quarter of 2022, we improved our margin and net interest income through increased commercial loan activity, retention of mortgage loans at favorable yields, and proactive management of our deposit betas while supporting balance sheet growth,” he said. 

 He said the bank continues to capitalize on opportunities in its Lancaster and Capital Region markets, strengthening its franchise value.  

“These efforts, coupled with the ongoing execution of our stock repurchase program and the recent announcement of the company’s intention to pay regular quarterly cash dividends, will continue to enhance our long-term shareholder value under challenging circumstances,” he said. 

On April 19 the company announced its first quarterly regular cash dividend of eight cents per common share that was paid on May 13. Subsequently, a second-quarter eight cent per common share cash dividend was declared on July 21 and is payable on August 15 to shareholders of record at the close of business on August 5. 

As part of its Share Repurchase Plan announced on March 24, the company has repurchased 51,817 shares during the second quarter.