Pioneer Bankshares : 2021 Annual Financial Report

2021 Annual Financial Report

INDEX

Page
Market Data	3
Financial Highlights	4
General Business Description	5
Report of Independent Auditor	6-7
Consolidated Balance Sheets as of December 31, 2021 and 2020	8
Consolidated Statements of Income for the years ended
December 31, 2021 and 2020	9
Consolidated Statements of Comprehensive Income for the
years ended December 31, 2021 and 2020	10
Consolidated Statements of Changes in Stockholders' Equity
for the years ended December 31, 2021 and 2020	11
Consolidated Statements of Cash Flows for the years ended
December 31, 2021 and 2020	12
Notes to Consolidated Financial Statements	13 - 52

Market Data

The Common Stock of the Company trades on the OTC Bulletin Board under the symbol "PNBI" and transactions generally involve a small number of shares. The Company's transfer agent is Computershare, Inc. located at 480 Washington Boulevard, 29th Floor, in Jersey City, New Jersey, 07013. The following table shows actual trade prices during the year. Other transactions may have occurred which were not included in the table.

COMMON STOCK TRADE PRICES

2020

• First Quarter

  $

  High 29.80

  Low

  • $ 23.00

• Second Quarter

• Third Quarter

• Fourth Quarter 2021

24.95 22.00 24.00 23.00 24.25 22.00

• First Quarter

  $

  High 27.75

  Low

  • $ 23.00

• Second Quarter

• Third Quarter

• Fourth Quarter

29.99 24.76 29.65 28.00 29.65 28.86

The Company has declared dividends on its Common Stock as follows:

Declared	Record	Payment
Date	Date	Date
2/20/20	3/20/20	3/31/20	$	.23
5/21/20	6/19/20	6/30/20	.23
8/20/20	9/18/20	9/30/20	.23
11/19/20	12/17/20	12/31/20	.23
Total for 2020	$	.92
2/18/21	3/18/21	3/31/21	$	.24
5/20/21	6/17/21	6/30/21	.24
8/19/21	9/16/21	9/30/21	.24
11/18/21	12/16/21	12/31/21	.24
Total for 2021	$	.96

Per Share Amount

The Company's ability to pay dividends is subject to certain restrictions imposed by the Federal Reserve and capital requirements of Federal and Virginia banking statutes and regulations. Additionally, the Company intends to follow a policy of retaining sufficient earnings in order to maintain the net worth and reserves of the Bank at adequate levels and to provide for the Company's growth and ability to compete in its market area.

FINANCIAL HIGHLIGHTS

(In thousands, except for per share information)Results of Operations

Interest and dividend income

Interest expense

Net interest income

Provision for loan losses

Net interest income after provision for loan losses

Noninterest income

Noninterest expense

Income before income taxes

Income tax expense

Net Income

Financial Condition, At Year End

2021

2020

$

11,899 $ 10,948

569 1,068

11,330 9,880

(283) 854

11,613 9,026

1,890 1,694

9,275 7,883

4,228 2,837

660 277

$

3,568 $ 2,560

Assets

Deposits

$

290,405$ 264,419252,331 227,816

Loans, net of allowance 176,680195,678

Stockholders' Equity

Per Share Data

Net income per share, basic and diluted

Dividends per share

Book value per share

Performance Ratios

Return on average assets 1 Return on average equity 1 Dividend payout ratio

Average equity to average assets 1

1Ratios are based primarily on daily average balances

34,825 32,823

$

3.60 $ 2.60 .96 .92 34.9633.19

1.26%1.03%10.52% 8.04% 26.71%35.45%11.99% 12.81%

General Business Description

Pioneer Bankshares, Inc. (the "Company"), a Virginia one bank holding company headquartered in Stanley, Virginia, was incorporated under the laws of the Commonwealth of Virginia on November 4, 1983. The Company's wholly-owned subsidiary, Pioneer Bank, Inc. (the "Bank") was established as a national bank in 1909. The Bank converted from a national bank to a state chartered bank, effective April 1994, and changed its name to Pioneer Bank, effective April 1999.

Pioneer Bank's main branch and corporate office are located in Stanley, Virginia, with other branch locations in Shenandoah, Luray, Harrisonburg, Stanardsville, Ruckersville, and Charlottesville, Virginia. The Bank also operates a small finance company known as Valley Finance Services, a Division of Pioneer Bank, which specializes in consumer and auto lending.

Pioneer Bank also owns and operates two subsidiaries, one of which is Pioneer Financial Services, LLC. Income received from insurance services and non-banking investment services is handled through Pioneer Financial Services, LLC. The second subsidiary owned by Pioneer Bank is Pioneer Special Assets, LLC, which is generally used in conjunction with foreclosed properties, as a means of minimizing the risk of liability to the Bank.

The assets of the Company consist primarily of all of the stock of the Bank, real estate holdings leased to the Bank, a portfolio of equity investment securities, and minimal cash accounts.

The Bank is engaged in the general commercial banking business, primarily serving the counties of Page, Greene, Rockingham, and Albemarle, Virginia. In addition, the close proximity and mobile nature of individuals and businesses in adjoining Virginia counties and nearby cities places these markets within the Bank's targeted trade area. The Bank also anticipates serving some individuals and businesses from other areas, including, but not limited to, the counties surrounding Page County.

The Bank offers a full range of banking and related financial services focused primarily towards serving individual consumers, small to medium size commercial businesses, and the professional community. The Bank strives to serve the banking needs of its customers while developing personal, hometown relationships. The Bank's Board of Directors and management believe that the marketing of customized banking services will enable the Bank to continue its position in the financial services marketplace.

The Bank provides individual consumers, professionals and small and medium size commercial businesses in its market area with responsive and technologically advanced banking services. These services include competitively priced loans that are based on deposit relationships, easy access to the Bank's decision-makers, and quick and innovative action necessary to meet a customer's banking needs. The Bank's capitalization and lending limit enables it to satisfy the credit needs of a large portion of the targeted market segment. In the event there are customers whose loan requirements exceed the Bank's lending limit, the Bank will seek to arrange such loans on a participation basis with other financial institutions or private investors. The Board of Directors and management believe the Bank's present capitalization will support substantial growth in deposits and loans.