Mifflinburg Bancorp : 2021 Annual Audit Report

ANNUAL REPORT

2021

Mifflinburg

Bancorp, Inc.

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1872	-2022

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TABLE OF

CONTENTS

Letter from the President ......................................................................................	1
Management Team & Board of Directors ......................................................	2
150 Years of Success ................................................................................................	3
Statistical Information ............................................................................................	5
Independent Auditors' Report ............................................................................	6
Consolidated Balance Sheets ...............................................................................	8
Consolidated Statements of Income .................................................................	9
Consolidated Statements of Comprehensive Income .............................	10
Consolidated Statements of Changes in Stockholders' Equity ............	11
Consolidated Statements of Cash Flows .......................................................	12
Notes to Consolidated Financial Statements ..............................................	13

Letter from the President

Dear Shareholders,

For 150 years, Mifflinburg Bank and Trust Company (MBTC) has been a trusted financial institution in the communities of central Pennsylvania. Since MBTC's establishment in May of 1872, we have assisted businesses, homeowners and local government agencies grow and succeed for the benefit of our communities. The company was established with $50,000 in capital from 35 shareholders, which has grown to $55 million and nearly 500 shareholders, while paying 299 consecutive, semi-annual dividends. MBTC is the 14th oldest bank in Pennsylvania, which is directly attributable to dedicated employees, community loyalty and strategic management. The enthusiasm and reliability of the MBTC team was demonstrated once again this past year. Net income for 2021 was a record $5,950,000 compared to $5,352,000 in 2020 representing earnings per share of $3.18 and $2.86, respectively. This 11.17% net income growth was primarily due to the recognition of Paycheck Protection Program fee income included in interest income, and a decrease in interest expense as deposits repriced lower for the majority of the year. Return on average assets and return on average equity were 1.11% and 10.84% for 2021 as compared to 1.09% and 10.33% for 2020. We also achieved record assets of $555 million in 2021 compared to $511 million in 2020, an 8.64% increase. The continuation of government stimulus into the economy during 2021 contributed to an increase in deposits of $56 million or 13.56%. These funds were utilized to increase loans by $17 million year over year and pay down Federal Home Loan Bank borrowings by $13 million, while increasing cash and cash equivalents by $18 million. The stimulus directly helped consumers with credit

assistance as our past due and non-accrual loan ratio was only 0.61% of total loans as of December 31, 2021, compared to 1.26% as of December 31, 2020. Early in 2021, we underwent a core-processing conversion. We decided it was an ideal time to upgrade to a new platform knowing our current system was slowly being phased out and our current contract was expiring. The conversion team worked for months to prepare for the transition and we continue to learn more each day. Later this year, a traditional utilization study will be performed to help us gain a broader understanding and increase our efficiency in utilizing the capabilities of the new system. In February 2021, we opened our new Milton branch. The expansion into this market started in 2015 when we purchased our first property there at a desirable location. We are very pleased with the first year's growth of the office and congratulate the Milton team for an outstanding performance. We are anticipating the new year will bring new challenges like we have not seen in quite some time. Interest rates are rising, inflation is at a record high and the economic and political issues continue to yield uncertainty. We are mindful the pandemic will persist, prompting a change in how we operate and offer services. By working together as we have in the past, I believe our future successes will continue the bank's legacy for many years to come. Sincerely,

Jeffrey J. Kapsar

President & CEO

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Management Team

	Top row, from left to right:	Bottom row, from left to right:
	Thomas C. Graver, Jr.	Garry R. Benfer
	Thomas E. Beck	Mandi L. Ruhl
	Jeffrey J. Kapsar (President and CEO)	Lisa K. Erickson
	Thomas R. Crissinger, Jr.	Thomas L. Eberhart

Board of Directors

Top row, from left to right:

Richard J. Drzewiecki

Robert S. Pierce

Jeffery J. Kapsar (President and CEO)

Robert C. Musser

Bottom row, from left to right:

John R. Showers

Thomas E. Boop (Chairman)

Betsy K. Robertson

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