Bill Hickerson, president and CEO of Andrew Johnson Bank, reported the bank’s net income increased 55 percent in 2012 over the previous year. Pre-tax earnings were $3,949,361 and the bank’s net income was $2,514,223.
A better than expected earnings performance for the year enabled the bank to pay dividends of 75 cents per share in July and December. An additional special dividend of 75 cents per share was paid in December in anticipation of higher tax rates being applied to dividend income in 2013. The aggregated dividend in 2012 was $2.25 per share.
Hickerson said that in 2012 the bank continued in a positive trend by holding margins, improving credit quality and increasing market share. The bank successfully maintained a fiscally conservative business plan that controlled risk and improved capital adequacy while emphasizing core business practices such as customer service and providing modern and relevant financial products.
Hickerson said, “Our goal is to be the best community bank in Northeast Tennessee and ‘best’ means wellcapitalized, well managed, and exhibiting exemplary service to provide for the financial needs of our customers in the communities we serve.”
Hickerson reported the improved earnings in 2012 allowed the bank to increase its tier 1 capital ratio (the ratio most commonly used by regulators in assessing a bank’s capital adequacy), from 8.73 percent of average assets at Dec. 31, 2011 to 9.02 at Dec. 31, 2012. This is significant in that many banks are experiencing extreme difficulty in raising equity capital in this banking environment, according to Hickerson.
The net result of the efforts was an increase in shareholder value.(increasing equity capital)
“I feel that the bank must be managed in a conservative manner, but should not be averse to taking advantage of growth opportunities in existing and contiguous markets that would enhance shareholder value over time.” Hickerson said.
Hickerson characterized 2012 as a year in which the bank continued to increase its core earnings while improving asset quality. He believes that our region will continue to face economic difficulties in 2013, but is confident that the bank’s board of directors and management have taken the steps necessary to maintain positive earnings and increased capital. The Bank is better prepared to continue to support the economic growth in the communities with loans.
“We remain strong for the community,” Hickerson said. “I realize that the challenges facing community banks are unprecedented and that government intrusion and more regulation will only negatively impact all community banks; however, I sincerely believe that well managed community banks will not only survive but prosper,” he said.
From a meeting of community bankers in 2012, Sandra Thompson, the director of the Division of Risk Management Supervision of the FDIC said. “Our examiners are reporting intense competition in credit and deposit markets. They also note challenges from demographic changes, technology and meeting regulatory obligations. Attracting and retaining expert talent is another issue.”
Hickerson said in response, “We recognize the challenges and opportunities facing our community bank. We remain competitive with rates for deposits and loans in all our markets. We have responded positively to regulatory requirements while providing advances in secure technology to our customer and our internal processes. As far as the talent of our employees, we now have the best trained and qualified staff since my tenure here and continue to recruit new employees that enhance the Andrew Johnson Bank brand and bottom line.”
Headquartered in Greeneville, Tennessee, Andrew Johnson Bank is a privately owned community bank chartered in 1975 with assets of approximately $280 million. The Bank has seven full service offices with locations in Greeneville, Morristown, Jonesborough, Johnson City and Cleveland, Tennessee.
In addition, the Bank provides wealth management, brokerage and insurance services through its subsidiary, Andrew Johnson Insurance and Investment Services (formerly Greeneville Insurance Agency). The bank is privately owned; its stock is not publicly traded on any listed exchange.