Skyline Bankshares, Inc. Announces Second Quarter 2023 Results.

FLOYD, Va. and INDEPENDENCE, Va: Skyline Bankshares, Inc. (the "Company") (OTC QX: SLBK) - the holding company for Skyline National Bank (the "Bank") - announced its results of operations for the second quarter of 2023.

The Company recorded net income of $2.8 million, or $0.49 per share, for the quarter ended June 30, 2023, compared to net income of $2.2 million, or $0.40 per share, for the same period in 2022. For the six months ended June 30, 2023, net income was $5.5 million, or $0.98 per share, compared to net income of $4.6 million, or $0.83 per share, for the six months ended June 30, 2022. Second quarter 2023 earnings represented an annualized return on average assets ("ROAA") of 1.10% and an annualized return on average equity ("ROAE") of 14.35%, compared to 0.88% and 11.67%, respectively, for the same period last year.

President and CEO Blake Edwards stated, "We are pleased to report strong earnings for the second quarter, and first half, of 2023. Our earnings per share increased by 22.50% compared to the second quarter of 2022. This increase comes despite the significant increase in interest expense on deposits that we have seen throughout the banking industry since the Federal Reserve began to aggressively increase interest rates last year. While our total deposits have remained relatively stable this year, customers are continuing to move their deposits out of lower rate transactional accounts and into higher earning time deposits. This trend has resulted in an increase in certificates of deposit of $63.1 million from June 30, 2022 to June 30, 2023."

Edwards continued, "Fortunately, solid loan growth continues to help us offset the increase in interest expense. Our core loans grew at an annualized rate of over 7% in the quarter, and over 9% for the past year. As a result, our net interest margin increased to 3.82% when compared to 3.54% for the second quarter of 2022, and fell only slightly when compared to the 3.89% level in the first quarter of 2023."

Edwards concluded, "We expect competition for deposits and increased interest expense to continue throughout 2023, and because of this we expect to see continued pressure on our net interest margin. As such, we will continue to focus on our long-term strategy of growing our Skyline franchise with an emphasis on low-cost core deposit accounts while minimizing our reliance on more expensive time deposits or secondary funding sources. I believe we remain well positioned for growth...

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