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2019 Annual Report Released

As I write this letter, our nation is struggling with the proliferating COVID-19 pandemic. Business activity, travel, dining and, indeed, life as we know it has been suspended while we assess how to contain the spread of this illness.

In his first inaugural address in 1933, President Franklin D. Roosevelt said, “...The only thing we have to fear is fear itself.” There is an element of truth to that, but it is also true that we must be diligent as we brace for the uncertainties this pandemic brings with it. Many of you are familiar with compound interest. That is often the way a virus works, with growth feeding on growth. That is why we must be so careful in all of our dealings with our customers and staff.

We have taken a number of steps to help prevent the spread of the virus, including remote work for much of our operations, loan, and administrative staff, some changes to how we handle business in our branch lobbies, and some adjustments to our personnel policies to allow our staff time to care for themselves and their families. While we are currently operating at full capacity, we strongly encourage customers to utilize our drive-through locations and our online banking platform, which provides a complete suite of products and services. And of course, if you need to speak to us, your personal banker is never more than a phone call away. In the meantime, we will continue to develop policies and procedures designed to safeguard everyone with whom we do business.

Looking at the year just completed, let me begin by saying that it was our best ever. Earnings achieved another record high, continuing their strong and consistent advance. Our profitability metrics—such as the efficiency ratio, return on equity and return on assets—were among the best in the industry. Balance sheet growth was superior, particularly in terms of loans. Asset quality was excellent, with year-end nonperforming assets at a multi-year low. And, finally, we built upon our capital base, finishing the year in a solid position to sustain our growth. The market took note of our success, including some industry-leading publications.

Here are a few of the specifics:

  • Grew earnings 21% to a record level exceeding $12 million
  • Expanded the balance sheet, with gross loans increasing an impressive 14%
  • Maintained excellent asset quality, with nonperforming assets dropping to its lowest level in five years
  • Boosted our deposit market share in Knox County and maintained the dominant number one position in Unicoi County
  • Achieved high profitability metrics, with ROAE reaching 14.6% and efficiency ratio, maintaining it’s 48.4% level
  • Received accolades from industry-leading sources, including being named to American Banker’s Top 200 list
  • Added key members to our staff, providing for greater depth and expertise on the team

While there are clearly uncertainties in the current market, we are highly profitable, well-capitalized and have a winning team. And we pledge to remain focused on our strategic plan and adhere to the standards you have come to expect.


William E. Edwards III
President and Chief Executive Officer