About Us

Message from the President

October 15, 2009

For the three quarters ended September 30th, the combined Bank reported over $1 million in after-tax profits and average assets in the $280 million range. However, the third quarter represented a period of adjustment from the strong earnings of the previous two quarters. Stress in the banking industry is evidenced by increasing bank closures (mostly in the south and west) and regulatory pressures to raise bank reserves against continuing loan losses – two visible signs of such stress. Our own reserve levels (the balance in the Allowance for Loan and Lease Losses, ALLL) were deemed too low by management in this recessionary environment. Consequently, income was charged with extraordinary loan loss provisions in the third quarter and earnings were eliminated (the combined Bank reported a $205,000 loss). For the third quarter, the Bank allocated $850,000 for losses and simultaneously charged off, net of recoveries, about the same amount. Thus, we ended the third quarter with an ALLL balance equal to 1.09% of loans outstanding, about the same as reported at the end of the second quarter.

Physicians National Bank maintained a fairly static balance sheet in the third quarter, however short term pipeline and recent prospecting efforts suggest we will see a spike in funded loan assets and core deposit growth in the fourth quarter and beyond.

We believe our approach in this niche healthcare banking market will continue to build short and long term value for our shareholders, and will be substantiated by the balance sheet metrics of this division.

I welcome any customers, prospects, shareholders or other stakeholders to contact me directly with any questions or feedback at 484.455.2810 (direct dial) or 610.209.1890 (mobile).

Grant M. Conway
President & COO