Attached files
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| 8-K - FORM 8-K - SALISBURY BANCORP, INC. | sal1027form8k.htm |
Exhibit 99.1
Friday, October 30, 2020
Company Press Release
Source: Salisbury Bancorp, Inc.
Salisbury Contact: Richard J. Cantele, Jr., President and Chief Executive Officer
860-435-9801 or rcantele@salisburybank.com
FOR IMMEDIATE RELEASE
SALISBURY BANCORP, INC. REPORTS STRONG RESULTS FOR THIRD QUARTER 2020; DECLARES 29 CENT DIVIDEND
| · | Third Quarter 2020 Net Income of $1.53 per Basic Common Share |
| · | Common Equity Tier 1 and Total Capital Ratios of 12.3% and 13.6%, Respectively |
| · | Non-Performing Assets were 0.36% of Total Assets Compared with 0.35% at December 31, 2019 |
| · | Book Value and Tangible Book Value Per Common Share Increased 7% and 8%, Respectively in 2020 |
Lakeville, Connecticut, October 30, 2020 /GlobeNewswire…..Salisbury Bancorp, Inc. (“Salisbury”), (NASDAQ Capital Market: “SAL”), the holding company for Salisbury Bank and Trust Company (the “Bank”), announced results for its third quarter ended September 30, 2020.
Net income allocated to common shareholders was $4.3 million, or $1.53 per common share, for the quarter ended September 30, 2020 (third quarter 2020), compared with $2.7 million, or $0.96 per common share, for the second quarter ended June 30, 2020 (second quarter 2020), and $2.9 million, or $1.06 per common share, for the third quarter ended September 30, 2019 (third quarter 2019). Results for third quarter 2020 included a loan loss provision of $686 thousand, and a non-recurring non-taxable gain of $601 thousand, or $0.21 per basic common share, related to proceeds received from a bank-owned life insurance policy (“BOLI”) due to the death of a covered former employee.
Salisbury’s President and Chief Executive Officer, Richard J. Cantele, Jr., stated, “I am extremely proud of our Salisbury Bank team, which has successfully met the challenges of serving our customers and communities during these difficult times. During this pandemic we extended $100 million in PPP loans and worked with numerous commercial and residential customers to accommodate their needs for temporary loan payment deferrals. Our efforts have assisted the economic survival of our customers. We reported strong earnings for the third quarter and we continued to bolster our allowance for loan losses and our capital base. We have also been able to increase book value and tangible book value per common share by 7% and 8%, respectively so far for this year. As we enter the colder months, however, the uncertainty surrounding COVID-19 and its impact on businesses is extremely high. As a result, we continue to closely monitor our loan portfolio and our lenders constantly communicate with our customers. Salisbury remains committed to providing outstanding customer service and supporting our local communities during this crisis.”
Net-Interest and Dividend Income
Tax equivalent net interest income of $10.1 million for the third quarter 2020 increased $313 thousand, or 3.2%, versus second quarter 2020, and increased $1.3 million, or 14.4%, versus third quarter 2019. Interest income was essentially unchanged compared to second quarter 2020 and third quarter 2019. Third quarter 2020 included PPP fees and interest of $651 thousand compared with $561 thousand in second quarter 2020. The cost of interest bearing liabilities declined $0.2 million, or 18.8%, from second quarter 2020 and declined $1.3 million, or 54.3%, from third quarter 2019.
Average earning assets increased $42.1 million, or 3.6%, versus second quarter 2020, and increased $150.9 million, or 14.1%, versus third quarter 2019. Average earning assets for third quarter 2020 included average PPP loan balances of $97.0 million. Average total interest bearing liabilities increased $23.0 million, or 2.8%, versus second quarter 2020 and increased $64.9 million, or 8.4%, versus third quarter 2019. The increase from third quarter 2019 primarily reflected the funding of PPP loans.
The tax equivalent net interest margin for the third quarter 2020 was 3.29% compared with 3.31% for the second quarter 2020 and 3.29% for the third quarter 2019. See SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income on pages 9-10 of this release for additional details.
Non-Interest Income
Non-interest income of $3.3 million for third quarter 2020 increased $1.0 million compared with second quarter 2020 and third quarter 2019. Non-interest income for third quarter 2020 included a non-recurring non-taxable BOLI gain of $601 thousand due to the death of a covered former employee. The increase in non-interest income from the comparative quarters also reflected higher realized gains on the sale of residential mortgages.
Trust and Wealth Advisory fees of $1.1 million increased slightly compared with both second quarter 2020 and third quarter 2019. Assets under administration were $748.2 million as of September 30, 2020 compared with $704.1 million at June 30, 2020 and $752.5 million as of September 30, 2019. Discretionary assets under administration of $515.0 million in third quarter 2020 increased from $480.5 million in second quarter 2020 and $475.5 million in third quarter 2019. The growth from second quarter 2020 primarily reflected higher market valuations whereas the growth versus third quarter 2019 primarily reflected new business activity. Non-discretionary assets under administration were $233.2 million in third quarter 2020 compared with $223.6 million in second quarter 2020 and $277.0 million in third quarter 2019. The increase from second quarter 2020 primarily reflected higher valuations whereas the decline from third quarter 2019 primarily reflected a lower valuation of shares in a partnership for one significant client relationship for which the trust and wealth business recorded only a nominal annual fee.
Service charges and fees of $711 thousand increased $113 thousand versus second quarter 2020 and decreased $292 thousand versus third quarter 2019. The increase from second quarter 2020 primarily reflected higher interchange fees whereas the decline from third quarter 2019 reflected lower deposit fees. To help support the financial needs of our customers and the communities in our markets, the Bank waived approximately $289 thousand and $558 thousand of deposit and transaction fees in the third quarter and the nine month period ended September 30, 2020, respectively.
Income from sales and servicing of mortgage loans of $736 thousand increased $418 thousand versus second quarter 2020 and increased $618 thousand from third quarter 2019. Mortgage loans of $26.6 million were sold during the third quarter 2020 compared with sales of $14.7 million for second quarter 2020 and $5.6 million in third quarter 2019.
Non-Interest Expense
Non-interest expense of $7.3 million for third quarter 2020 increased $470 thousand versus second quarter 2020 and increased $75 thousand versus third quarter 2019. Compensation expense of $4.2 million for third quarter 2020 increased $727 thousand from second quarter 2020 and decreased $48 thousand versus third quarter 2019. The second quarter 2020 included the deferral of approximately $540 thousand of compensation costs associated with originating PPP loans. These deferred costs will be amortized into income over the term of the PPP loans as an offset to loan interest income, which is a component of net interest margin. Third quarter 2020 also reflected higher salary expense and production accruals, which were driven by increased loan origination volume.
Excluding compensation, other non-interest expenses of $3.1 million for third quarter 2020 decreased $257 thousand from second quarter 2020 and increased $123 thousand from third quarter 2019. The decrease from second quarter 2020 primarily reflected lower consulting and director fees as well as a decline in community support donations, which were accelerated in second quarter 2020. The increase from third quarter 2019 primarily reflected FDIC assessment credits recorded in the prior year third quarter.
The effective income tax rates for third quarter 2020, second quarter 2020 and third quarter 2019 were 17.3%, 18.1% and 18.0%, respectively. The lower tax rate in third quarter 2020 primarily reflected the non-taxable BOLI proceeds received during the quarter.
Loans
Gross loans for third quarter 2020 of $1.0 billion included $99.9 million in PPP loans, which are categorized as commercial & industrial loans in the below table, and net deferred fees of $2.3 million. Excluding PPP loans, gross loans receivable were $947.0 million at September 30, 2020, compared with $955.8 million at June 30, 2020, and $923.9 million at September 30, 2019. Including PPP loans, the ratio of gross loans to deposits for third quarter 2020 was 95.4% compared with 97.0% for second quarter 2020 and 95.6% for third quarter 2019. Balances by loan type for the comparative periods were as follows:
| Loan Type | Q3 2020 | Q2 2020 | Q3 2019 | |||||||||
| Residential Real Estate | $ | 429,221 | $ | 436,364 | $ | 421,843 | ||||||
| Commercial Real Estate | 333,412 | 323,634 | 296,302 | |||||||||
| Commercial & Industrial | 237,448 | 247,440 | 164,078 | |||||||||
| Farm Land | 3,295 | 3,324 | 3,686 | |||||||||
| Vacant Land | 13,694 | 13,879 | 8,111 | |||||||||
| Municipal | 20,797 | 20,707 | 22,260 | |||||||||
| Consumer | 7,686 | 7,886 | 6,290 | |||||||||
| Deferred (Fees) Costs | (959 | ) | (1,339 | ) | 1,359 | |||||||
| Gross Loans Receivable | $ | 1,044,594 | $ | 1,051,895 | $ | 923,929 |
Asset Quality
In March 2020, Salisbury implemented a loan payment deferral program which allowed residential, commercial and consumer borrowers, who have been adversely affected by the COVID-19 pandemic, to defer loan payments for up to three months. Customers may also apply for additional deferments. As of September 30, 2020, loan payments were deferred on 21 residential and consumer loans ($7 million loan balance) and 37 commercial loans ($56 million loan balance).
Non-performing assets decreased $0.1 million during third quarter 2020 to $4.7 million, or 0.36% of total assets at September 30, 2020, from $4.8 million, or 0.37% of total assets at June 30, 2020, and decreased $1.0 million from $5.7 million, or 0.50% of total assets, at September 30, 2019.
The amount of total impaired and potential problem loans decreased $0.1 million during the third quarter 2020 to $26.8 million, or 2.56% of gross loans receivable, at September 30, 2020 compared to $26.9 million, or 2.55% of gross loans receivable, at June 30, 2020, and increased $4.2 million from $22.6 million, or 2.44% of gross loans receivable, at September 30, 2019.
Accruing loans receivable 30-to-89 days past due decreased $1.0 million during third quarter 2020 to $1.6 million, or 0.16% of gross loans receivable, from $2.7 million, or 0.25% of gross loans receivable at June 30, 2020, and decreased $0.2 million from $1.8 million, or 0.19% of gross loans receivable at September 30, 2019.
The allowance for loan losses at September 30, 2020 was $13.0 million compared with $12.4 million at June 30, 2020 and $8.8 million at September 30, 2019. The provision for loan losses expense was $0.7 million for third quarter 2020 versus $1.8 million for second quarter 2020, and $94 thousand for third quarter 2019. The provision for third quarter reflected management’s assessment of the impact of the COVID-19 pandemic on certain qualitative and environmental factors and impaired loans. Net loan charge-offs were $56 thousand for the third quarter 2020, $53 thousand for second quarter 2020 and $135 thousand for the third quarter 2019. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, was 1.24% for the third quarter 2020, versus 1.18% for second quarter 2020 and 0.96% for third quarter 2019. Excluding PPP loans and deferred net fees, the ratio of the allowance for loan losses to gross loans was 1.37% for third quarter 2020 compared with 1.29% for second quarter 2020.
Salisbury endeavors to work constructively to resolve its non-performing loan issues with customers. Substantially all non-performing loans are collateralized with real estate and the repayment of such loans is largely dependent on the return of such loans to performing status or the liquidation of the underlying real estate collateral.
Deposits and Borrowings
Deposits of $1.1 billion at September 30, 2020 increased $9.5 million from June 30, 2020 and increased $129.0 million from September 30, 2019. Deposits at September 30, 2020 included brokered deposits, including CDARS one-way buys, of $18.0 million compared with $38.2 million at June 30, 2020 and $32.9 million at September 30, 2019. Average total deposits for third quarter 2020 were $1.1 billion compared with $1.0 billion at June 30, 2020 and $938.5 million at September 30, 2019. Average total deposits for third quarter 2020 included average brokered deposits of $24.9 million compared with $44.2 million for second quarter 2020 and $31.6 million for third quarter 2019.
FHLB advances of $43.9 million at September 30, 2020 decreased $11.2 million from June 30, 2020 and increased $6.1 million from September 30, 2019. Salisbury’s excess borrowing capacity at FHLBB was approximately $234 million at September 30, 2020.
Capital
Book value per common share increased $1.33 during the third quarter 2020 to $42.99 per share and increased $3.47 from the third quarter 2019. Tangible book value per common share increased $1.36 during third quarter 2020 to $37.87 and increased $3.63 from the third quarter 2019.
Shareholders’ equity increased $3.8 million in third quarter 2020 to $122.2 million at September 30, 2020 as net income of $4.4 million and the issuance of restricted stock awards of $0.2 million were partly offset by common stock dividends paid of $0.8 million.
The Bank’s regulatory capital ratios remain in compliance with regulatory “well capitalized” requirements. At September 30, 2020, the Bank’s Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 8.93%, 13.6%, and 12.3%, respectively, compared with regulatory “well capitalized” minimums of 5.00%, 10.00%, and 6.5%, respectively.
Dividends on Common Shares
The Board of Directors of Salisbury declared a $0.29 per common share quarterly cash dividend at its October 30, 2020 meeting. The dividend will be paid on November 27, 2020 to shareholders of record as of November 13, 2020.
Background
Salisbury Bancorp, Inc. is the parent company of Salisbury Bank and Trust Company, a Connecticut chartered commercial bank serving the communities of northwestern Connecticut and proximate communities in New York and Massachusetts, since 1848, through full service branches in Canaan, Lakeville, Salisbury and Sharon, Connecticut; Great Barrington, South Egremont and Sheffield, Massachusetts; and Dover Plains, Fishkill, Millerton, Newburgh, New Paltz, Poughkeepsie, and Red Oaks Mill, New York. The Bank offers a broad spectrum of consumer and business banking products and services as well as trust and wealth advisory services.
Forward-Looking Statements
This news release may contain statements relating to Salisbury’s and the Bank’s future results that are considered “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and expectations of management as well as the assumptions and estimates made by management using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions, including among others: changes in market interest rates and general and regional economic conditions; changes in laws and regulations; changes in accounting principles; and the quality or composition of the loan and investment portfolios, technological changes and cybersecurity matters, and other factors that may be described in Salisbury’s quarterly reports on Form 10-Q and its annual report on Form 10-K, which are available at the Securities and Exchange Commission’s website (www.sec.gov) and to which reference is hereby made. Forward-looking statements made by Salisbury in this news release speak only as of the date they are made. Events or other facts that could cause Salisbury’s actual results to differ may arise from time to time and Salisbury cannot predict all such events and factors. Salisbury undertakes no obligation to publicly update any forward-looking statement unless as may be required by law.
Investor presentation slides, which include a review of financial results and trends through the period ended September 30, 2020, are available in the Shareholder Relations section of Salisbury’s website at salisburybank.com under Shareholder Relations/News & Market Information/Presentations simultaneously with this Release.
Salisbury Bancorp, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
| (dollars in thousands, except share data) | September 30, 2020 | December 31, 2019 | ||||||
| ASSETS | (unaudited) | |||||||
| Cash and due from banks | $ | 6,828 | $ | 7,406 | ||||
| Interest bearing demand deposits with other banks | 88,513 | 19,479 | ||||||
| Total cash and cash equivalents | 95,341 | 26,885 | ||||||
| Interest bearing Time Deposits with Financial Institutions | 750 | 750 | ||||||
| Securities | ||||||||
| Available-for-sale at fair value | 95,720 | 91,801 | ||||||
| CRA mutual fund at fair value | 916 | 882 | ||||||
| Federal Home Loan Bank of Boston stock at cost | 3,158 | 3,242 | ||||||
| Loans held-for-sale | 2,761 | 332 | ||||||
| Loans receivable, net (allowance for loan losses: $13,001 and $8,895) | 1,031,593 | 927,413 | ||||||
| Other real estate owned | — | 314 | ||||||
| Bank premises and equipment, net | 18,727 | 17,385 | ||||||
| Goodwill | 13,815 | 13,815 | ||||||
| Intangible assets (net of accumulated amortization: $5,132 and $4,884) | 748 | 995 | ||||||
| Accrued interest receivable | 6,055 | 3,415 | ||||||
| Cash surrender value of life insurance policies | 17,572 | 20,580 | ||||||
| Deferred taxes | 2,252 | 1,249 | ||||||
| Other assets | 3,352 | 3,390 | ||||||
| Total Assets | $ | 1,292,760 | $ | 1,112,448 | ||||
| LIABILITIES and SHAREHOLDERS' EQUITY | ||||||||
| Deposits | ||||||||
| Demand (non-interest bearing) | $ | 313,742 | $ | 237,852 | ||||
| Demand (interest bearing) | 201,760 | 153,314 | ||||||
| Money market | 270,097 | 239,504 | ||||||
| Savings and other | 181,691 | 161,112 | ||||||
| Certificates of deposit | 127,851 | 127,724 | ||||||
| Total deposits | 1,095,141 | 919,506 | ||||||
| Repurchase agreements | 10,885 | 8,530 | ||||||
| Federal Home Loan Bank of Boston advances | 43,880 | 50,887 | ||||||
| Subordinated debt | 9,877 | 9,859 | ||||||
| Note payable | 218 | 246 | ||||||
| Finance lease obligations | 1,685 | 1,718 | ||||||
| Accrued interest and other liabilities | 8,834 | 8,047 | ||||||
| Total Liabilities | 1,170,520 | 998,793 | ||||||
| Shareholders' Equity | ||||||||
| Common stock - $0.10 per share par value | ||||||||
| Authorized: 5,000,000 | ||||||||
| Issued: 2,843,292 and 2,825,912 | ||||||||
| Outstanding: 2,843,292 and 2,825,912 | 284 | 283 | ||||||
| Unearned compensation - restricted stock awards | (906 | ) | (795 | ) | ||||
| Paid-in capital | 45,171 | 44,490 | ||||||
| Retained earnings | 74,995 | 68,320 | ||||||
| Accumulated other comprehensive income, net | 2,696 | 1,357 | ||||||
| Total Shareholders' Equity | 122,240 | 113,655 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 1,292,760 | $ | 1,112,448 |
Salisbury Bancorp, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
| Three months ended | Nine months ended | |||||||||||||||
| Periods ended September 30, (in thousands, except per share amounts) | 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Interest and dividend income | ||||||||||||||||
| Interest and fees on loans | $ | 10,362 | $ | 10,045 | $ | 30,662 | $ | 29,859 | ||||||||
| Interest on debt securities | ||||||||||||||||
| Taxable | 396 | 530 | 1,260 | 1,734 | ||||||||||||
| Tax exempt | 157 | 166 | 513 | 355 | ||||||||||||
| Other interest and dividends | 87 | 282 | 229 | 761 | ||||||||||||
| Total interest and dividend income | 11,002 | 11,023 | 32,664 | 32,709 | ||||||||||||
| Interest expense | ||||||||||||||||
| Deposits | 764 | 1,879 | 3,261 | 5,674 | ||||||||||||
| Repurchase agreements | 6 | 9 | 16 | 16 | ||||||||||||
| Finance lease | 35 | 43 | 106 | 135 | ||||||||||||
| Note payable | 3 | 4 | 11 | 12 | ||||||||||||
| Subordinated debt | 156 | 156 | 468 | 468 | ||||||||||||
| Federal Home Loan Bank of Boston advances | 113 | 265 | 472 | 956 | ||||||||||||
| Total interest expense | 1,077 | 2,356 | 4,334 | 7,261 | ||||||||||||
| Net interest and dividend income | 9,925 | 8,667 | 28,330 | 25,448 | ||||||||||||
| Provision for loan losses | 686 | 94 | 4,198 | 539 | ||||||||||||
| Net interest and dividend income after provision for loan losses | 9,239 | 8,573 | 24,132 | 24,909 | ||||||||||||
| Non-interest income | ||||||||||||||||
| Trust and wealth advisory | 1,068 | 1,023 | 3,129 | 2,973 | ||||||||||||
| Service charges and fees | 711 | 1,003 | 2,214 | 2,935 | ||||||||||||
| Gains on sales of mortgage loans, net | 707 | 42 | 1,020 | 50 | ||||||||||||
| Mortgage servicing, net | 29 | 76 | 162 | 232 | ||||||||||||
| Gains on CRA mutual fund | — | 6 | 22 | 29 | ||||||||||||
| Gains (losses) on available-for-sale securities, net | 34 | (9 | ) | 216 | 263 | |||||||||||
| BOLI income and gains | 719 | 86 | 986 | 252 | ||||||||||||
| Other | 18 | 29 | 97 | 97 | ||||||||||||
| Total non-interest income | 3,286 | 2,256 | 7,846 | 6,831 | ||||||||||||
| Non-interest expense | ||||||||||||||||
| Salaries | 3,114 | 3,042 | 8,375 | 8,994 | ||||||||||||
| Employee benefits | 1,061 | 1,181 | 3,244 | 3,408 | ||||||||||||
| Premises and equipment | 1,005 | 974 | 2,897 | 2,950 | ||||||||||||
| Data processing | 569 | 534 | 1,666 | 1,620 | ||||||||||||
| Professional fees | 635 | 572 | 2,020 | 1,690 | ||||||||||||
| OREO gains, losses and write-downs, net | — | 84 | — | 406 | ||||||||||||
| Collections and other real estate owned | 108 | 119 | 212 | 328 | ||||||||||||
| FDIC insurance | 123 | (9 | ) | 331 | 294 | |||||||||||
| Marketing and community support | 126 | 141 | 419 | 448 | ||||||||||||
| Amortization of intangibles | 78 | 93 | 247 | 297 | ||||||||||||
| Other | 440 | 453 | 1,572 | 1,398 | ||||||||||||
| Total non-interest expense | 7,259 | 7,184 | 20,983 | 21,833 | ||||||||||||
| Income before income taxes | 5,266 | 3,645 | 10,995 | 9,907 | ||||||||||||
| Income tax provision | 910 | 657 | 1,858 | 1,781 | ||||||||||||
| Net income | $ | 4,356 | $ | 2,988 | $ | 9,137 | $ | 8,126 | ||||||||
| Net income available to common stock | $ | 4,288 | $ | 2,940 | $ | 9,006 | $ | 8,016 | ||||||||
| Basic earnings per common share | $ | 1.53 | $ | 1.06 | $ | 3.22 | $ | 2.88 | ||||||||
| Diluted earnings per common share | $ | 1.53 | $ | 1.05 | $ | 3.21 | $ | 2.87 | ||||||||
| Common dividends per share | $ | 0.29 | $ | 0.28 | $ | 0.87 | $ | 0.84 | ||||||||
Salisbury Bancorp, Inc. and Subsidiary
SELECTED CONSOLIDATED FINANCIAL DATA (unaudited)
| At or for the quarters ended | ||||||||||||||||||||
| (in thousands, except per share amounts and ratios) | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2019 | |||||||||||||||
| Total assets | $ | 1,292,760 | $ | 1,287,137 | $ | 1,145,751 | $ | 1,112,448 | $ | 1,144,240 | ||||||||||
| Loans receivable, net | 1,031,593 | 1,039,524 | 949,142 | 927,413 | 915,083 | |||||||||||||||
| Total securities | 99,794 | 93,717 | 94,966 | 95,925 | 98,270 | |||||||||||||||
| Deposits | 1,095,141 | 1,085,599 | 965,620 | 919,506 | 966,178 | |||||||||||||||
| FHLBB advances | 43,880 | 55,118 | 40,932 | 50,887 | 37,828 | |||||||||||||||
| Shareholders’ equity | 122,240 | 118,444 | 116,143 | 113,655 | 111,580 | |||||||||||||||
| Wealth assets under administration | 748,188 | 704,052 | 639,457 | 777,503 | 752,467 | |||||||||||||||
| Discretionary wealth assets under administration | 514,988 | 480,456 | 425,359 | 498,737 | 475,482 | |||||||||||||||
| Non-discretionary wealth assets under administration | 233,200 | 223,596 | 214,098 | 278,766 | 276,985 | |||||||||||||||
| Non-performing loans | 4,681 | 4,815 | 3,188 | 3,621 | 5,370 | |||||||||||||||
| Non-performing assets | 4,681 | 4,815 | 3,188 | 3,935 | 5,687 | |||||||||||||||
| Accruing loans past due 30-89 days | 1,638 | 2,656 | 6,109 | 2,077 | 1,784 | |||||||||||||||
| Net interest and dividend income | 9,925 | 9,617 | 8,787 | 8,665 | 8,667 | |||||||||||||||
| Net interest and dividend income, tax equivalent(1) | 10,101 | 9,786 | 8,954 | 8,839 | 8,830 | |||||||||||||||
| Provision for loan losses | 686 | 1,806 | 1,706 | 417 | 94 | |||||||||||||||
| Non-interest income | 3,286 | 2,316 | 2,245 | 2,419 | 2,256 | |||||||||||||||
| Non-interest expense | 7,259 | 6,789 | 6,936 | 7,080 | 7,184 | |||||||||||||||
| Income before income taxes | 5,266 | 3,338 | 2,390 | 3,587 | 3,645 | |||||||||||||||
| Income tax provision | 910 | 604 | 343 | 578 | 657 | |||||||||||||||
| Net income | 4,356 | 2,734 | 2,047 | 3,009 | 2,988 | |||||||||||||||
| Net income allocated to common shareholders | 4,288 | 2,691 | 2,013 | 2,960 | 2,940 | |||||||||||||||
| Per share data | ||||||||||||||||||||
| Basic earnings per common share | $ | 1.53 | $ | 0.96 | $ | 0.72 | $ | 1.06 | $ | 1.06 | ||||||||||
| Diluted earnings per common share | 1.53 | 0.96 | 0.72 | 1.06 | 1.05 | |||||||||||||||
| Dividends per common share | 0.29 | 0.29 | 0.29 | 0.28 | 0.28 | |||||||||||||||
| Book value per common share | 42.99 | 41.66 | 41.05 | 40.22 | 39.52 | |||||||||||||||
| Tangible book value per common share - Non-GAAP ⁽2⁾ | 37.87 | 36.51 | 35.85 | 34.98 | 34.24 | |||||||||||||||
| Common shares outstanding at end of period (in thousands) | 2,843 | 2,843 | 2,829 | 2,826 | 2,823 | |||||||||||||||
| Weighted average common shares outstanding, to calculate basic earnings per share (in thousands) | 2,799 | 2,796 | 2,788 | 2,781 | 2,783 | |||||||||||||||
| Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands) | 2,807 | 2,803 | 2,797 | 2,794 | 2,795 | |||||||||||||||
| Profitability ratios | ||||||||||||||||||||
| Net interest margin (tax equivalent) (1) | 3.29 | % | 3.31 | % | 3.35 | % | 3.34 | % | 3.29 | % | ||||||||||
| Efficiency ratio (3) | 56.33 | 56.23 | 61.36 | 61.81 | 62.90 | |||||||||||||||
| Effective income tax rate | 17.28 | 18.11 | 14.35 | 16.11 | 18.02 | |||||||||||||||
| Return on average assets | 1.34 | 0.89 | 0.73 | 1.07 | 1.05 | |||||||||||||||
| Return on average common shareholders’ equity | 14.14 | 9.36 | 7.07 | 10.56 | 10.73 | |||||||||||||||
| Credit quality ratios | ||||||||||||||||||||
| Non-performing loans to loans receivable, gross | 0.45 | 0.46 | 0.33 | 0.39 | 0.58 | |||||||||||||||
| Accruing loans past due 30-89 days to loans receivable, gross | 0.16 | 0.25 | 0.64 | 0.22 | 0.19 | |||||||||||||||
| Allowance for loan losses to loans receivable, gross | 1.24 | 1.18 | 1.11 | 0.95 | 0.96 | |||||||||||||||
| Allowance for loan losses to non-performing loans | 277.8 | 256.9 | 333.0 | 245.64 | 164.73 | |||||||||||||||
| Non-performing assets to total assets | 0.36 | 0.37 | 0.28 | 0.35 | 0.50 | |||||||||||||||
| Capital ratios | ||||||||||||||||||||
| Common shareholders' equity to assets | 9.46 | % | 9.20 | % | 10.14 | % | 10.22 | % | 9.75 | % | ||||||||||
| Tangible common shareholders' equity to tangible assets - Non-GAAP(2) | 8.42 | 8.16 | 8.97 | 9.01 | 8.56 | |||||||||||||||
| Tier 1 leverage capital (4) | 8.93 | 8.95 | 9.65 | 9.60 | 9.27 | |||||||||||||||
| Total risk-based capital (4) | 13.60 | 13.15 | 12.97 | 12.84 | 12.58 | |||||||||||||||
| Common equity tier 1 capital (4) | 12.35 | 11.90 | 11.79 | 11.83 | 11.57 | |||||||||||||||
(1) Adjusted to reflect the U.S. federal statutory benefit on income derived from tax-exempt securities and loans.
(2) Refer to schedule
labeled “Supplemental Information – Non-GAAP Financial Measures”.
(3) Calculated as follows: Noninterest expense before OREO expense, amortization of intangibles, and goodwill impairments
as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains from securities transactions
and litigation expenses.
(4) Represents
the capital ratios of the Bank.
Salisbury Bancorp, Inc. and Subsidiary
SUPPLEMENTAL INFORMATION – Non-GAAP Financial Measures (unaudited)
| At or for the quarters ended | ||||||||||||||||||||
| (in thousands, except per share amounts and ratios) | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2019 | Q3 2019 | |||||||||||||||
| Common Shareholders' Equity | $ | 122,240 | $ | 118,444 | $ | 116,143 | $ | 113,655 | $ | 111,580 | ||||||||||
| Less: Goodwill | (13,815 | ) | (13,815 | ) | (13,815 | ) | (13,815 | ) | (13,815 | ) | ||||||||||
| Less: Intangible assets | (748 | ) | (825 | ) | (908 | ) | (995 | ) | (1,086 | ) | ||||||||||
| Tangible Common Shareholders' Equity | $ | 107,677 | $ | 103,804 | $ | 101,420 | $ | 98,845 | $ | 96,679 | ||||||||||
| Total Assets | $ | 1,292,760 | $ | 1,287,137 | $ | 1,145,751 | $ | 1,112,448 | $ | 1,144,240 | ||||||||||
| Less: Goodwill | (13,815 | ) | (13,815 | ) | (13,815 | ) | (13,815 | ) | (13,815 | ) | ||||||||||
| Less: Intangible assets | (748 | ) | (825 | ) | (908 | ) | (995 | ) | (1,086 | ) | ||||||||||
| Tangible Total Assets | $ | 1,278,197 | $ | 1,272,497 | $ | 1,131,028 | $ | 1,097,638 | $ | 1,129,339 | ||||||||||
| Common Shares outstanding | 2,843 | 2,843 | 2,829 | 2,826 | 2,823 | |||||||||||||||
| Book value per Common Share – GAAP | $ | 42.99 | $ | 41.66 | $ | 41.05 | $ | 40.22 | $ | 39.52 | ||||||||||
| Tangible book value per Common Share - Non-GAAP | 37.87 | 36.51 | 35.85 | 34.98 | 34.24 | |||||||||||||||
| Tangible common shareholders’ equity to tangible total assets - Non-GAAP | 8.42 | % | 8.16 | % | 8.97 | % | 9.01 | % | 8.56 | % | ||||||||||
| Consolidated: | ||||||||||||||||||||
| Non-interest expense | $ | 7,259 | $ | 6,789 | $ | 6,936 | $ | 7,080 | $ | 7,184 | ||||||||||
| Less: Amortization of core deposit intangibles | (78 | ) | (83 | ) | (87 | ) | (91 | ) | (93 | ) | ||||||||||
| Less: Foreclosed property expense including OREO gains, losses and Write downs | 2 | (7 | ) | 13 | (27 | ) | (115 | ) | ||||||||||||
| Adjusted non-interest expense | $ | 7,183 | $ | 6,699 | $ | 6,862 | $ | 6,962 | $ | 6,976 | ||||||||||
| Net interest and dividend income, tax equivalent | $ | 10,101 | $ | 9,786 | $ | 8,955 | $ | 8,839 | $ | 8,831 | ||||||||||
| Non-interest income | 3,286 | 2,316 | 2,245 | 2,419 | 2,256 | |||||||||||||||
| (Gains) losses on securities | (34 | ) | (188 | ) | (15 | ) | 4 | 3 | ||||||||||||
| BOLI proceeds | (601 | ) | — | — | — | — | ||||||||||||||
| Adjusted revenue | $ | 12,752 | $ | 11,914 | $ | 11,185 | $ | 11,262 | $ | 11,090 | ||||||||||
| Efficiency Ratio – Non-GAAP 1 | 56.33 | % | 56.23 | % | 61.36 | % | 61.81 | % | 62.90 | % | ||||||||||
1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q3 2020: 54.76%; Q2 2020: 54.29%; Q1 2020: 59.83%; Q4 2019: 60.19%; Q3 2019: 61.13%. If Q3 2020 results were normalized to exclude the impact of the COVID-19 pandemic, non-interest expense would increase by $48 thousand for deferred compensation costs and revenue would be adjusted to include waived deposit fees of $289 thousand and exclude PPP loan interest and fee income of $251 thousand and $400 thousand, respectively. The resulting normalized efficiency ratio for Q3 2020 would have been 58.37% or 56.94%, excluding trust & wealth advisory.
Salisbury Bancorp, Inc. and Subsidiary
SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income (unaudited)
| At or for the quarters ended | Average Balance | Income / Expense | Average Yield / Rate | |||||||||||||||||||||||||||||||||
| (dollars in thousands) | Q3 2020 | Q2 2020 | Q3 2019 | Q3 2020 | Q2 2020 | Q3 2019 | Q3 2020 | Q2 2020 | Q3 2019 | |||||||||||||||||||||||||||
| Loans (a)(d) | $ | 1,049,313 | $ | 1,038,551 | $ | 920,946 | $ | 10,485 | $ | 10,428 | $ | 10,158 | 3.97 | % | 4.02 | % | 4.41 | % | ||||||||||||||||||
| Securities (c)(d) | 89,220 | 86,987 | 96,317 | 606 | 634 | 747 | 2.72 | 2.92 | 3.10 | |||||||||||||||||||||||||||
| FHLBB stock | 3,440 | 3,580 | 3,024 | 34 | 39 | 46 | 3.96 | 4.36 | 6.08 | |||||||||||||||||||||||||||
| Short term funds (b) | 78,306 | 49,105 | 49,057 | 53 | 12 | 236 | 0.27 | 0.10 | 1.92 | |||||||||||||||||||||||||||
| Total earning assets | 1,220,279 | 1,178,223 | 1,069,344 | 11,178 | 11,113 | 11,187 | 3.64 | 3.77 | 4.18 | |||||||||||||||||||||||||||
| Other assets | 64,943 | 60,288 | 57,196 | |||||||||||||||||||||||||||||||||
| Total assets | $ | 1,285,222 | $ | 1,238,511 | $ | 1,126,540 | ||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 195,253 | $ | 172,811 | $ | 156,803 | 110 | 103 | 160 | 0.22 | 0.24 | 0.41 | ||||||||||||||||||||||||
| Money market accounts | 258,257 | 237,667 | 242,310 | 195 | 239 | 700 | 0.30 | 0.40 | 1.16 | |||||||||||||||||||||||||||
| Savings and other | 176,963 | 171,436 | 165,297 | 69 | 102 | 323 | 0.15 | 0.24 | 0.78 | |||||||||||||||||||||||||||
| Certificates of deposit | 135,238 | 157,288 | 152,475 | 390 | 544 | 697 | 1.15 | 1.38 | 1.83 | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 765,711 | 739,202 | 716,885 | 764 | 988 | 1,880 | 0.40 | 0.53 | 1.05 | |||||||||||||||||||||||||||
| Repurchase agreements | 12,218 | 4,773 | 7,266 | 6 | 4 | 9 | 0.20 | 0.34 | 0.50 | |||||||||||||||||||||||||||
| Capital lease | 2,928 | 2,987 | 4,356 | 35 | 35 | 42 | 4.80 | 4.69 | 3.86 | |||||||||||||||||||||||||||
| Note payable | 221 | 231 | 258 | 3 | 4 | 4 | 6.08 | 6.93 | 6.20 | |||||||||||||||||||||||||||
| Subordinated debt (net of issuance costs) | 9,872 | 9,866 | 9,849 | 156 | 156 | 156 | 6.32 | 6.32 | 6.34 | |||||||||||||||||||||||||||
| FHLBB advances | 44,522 | 55,374 | 31,983 | 113 | 140 | 266 | 0.99 | 1.01 | 3.33 | |||||||||||||||||||||||||||
| Total interest-bearing liabilities | 835,472 | 812,433 | 770,597 | 1,077 | 1,327 | 2,357 | 0.51 | 0.65 | 1.22 | |||||||||||||||||||||||||||
| Demand deposits | 321,392 | 302,965 | 238,689 | |||||||||||||||||||||||||||||||||
| Other liabilities | 7,592 | 6,029 | 6,669 | |||||||||||||||||||||||||||||||||
| Shareholders’ equity | 120,766 | 117,084 | 110,585 | |||||||||||||||||||||||||||||||||
| Total liabilities & shareholders’ equity | $ | 1,285,222 | $ | 1,238,511 | $ | 1,126,540 | ||||||||||||||||||||||||||||||
| Net interest income | $ | 10,101 | $ | 9,786 | $ | 8,830 | ||||||||||||||||||||||||||||||
| Spread on interest-bearing funds | 3.13 | 3.12 | 2.96 | |||||||||||||||||||||||||||||||||
| Net interest margin (e) | 3.29 | 3.31 | 3.29 | |||||||||||||||||||||||||||||||||
| (a) | Includes non-accrual loans. |
| (b) | Includes interest-bearing deposits in other banks and federal funds sold. |
| (c) | Average balances of securities are based on historical cost. |
| (d) | Includes tax exempt income benefit of $176,000, $170,000 and $164,000, respectively, for Q3 2020, Q2 2020 and Q3 2019 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2020 and 2019. |
| (e) | Net interest income divided by average interest-earning assets. |
Salisbury Bancorp, Inc. and Subsidiary
SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income (unaudited)
| Nine months ended September 30, | Average Balance | Income / Expense | Average Yield / Rate | |||||||||||||||||||||
| (dollars in thousands) | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
| Loans (a)(d) | $ | 1,012,070 | $ | 920,925 | $ | 31,010 | $ | 30,179 | 4.07 | % | 4.36 | % | ||||||||||||
| Securities (c)(d) | 88,603 | 97,337 | 1,939 | 2,201 | 2.92 | 3.02 | ||||||||||||||||||
| FHLBB stock | 3,354 | 3,487 | 106 | 183 | 4.24 | 7.03 | ||||||||||||||||||
| Short term funds (b) | 50,312 | 38,682 | 123 | 577 | 0.33 | 2.00 | ||||||||||||||||||
| Total earning assets | 1,154,339 | 1,060,431 | 33,178 | 33,140 | 3.83 | 4.18 | ||||||||||||||||||
| Other assets | 63,265 | 56,769 | ||||||||||||||||||||||
| Total assets | $ | 1,217,604 | $ | 1,117,200 | ||||||||||||||||||||
| Interest-bearing demand deposits | $ | 174,299 | $ | 154,885 | 331 | 458 | 0.25 | 0.40 | ||||||||||||||||
| Money market accounts | 245,581 | 217,290 | 994 | 1,732 | 0.54 | 1.07 | ||||||||||||||||||
| Savings and other | 170,880 | 177,873 | 405 | 1,229 | 0.32 | 0.92 | ||||||||||||||||||
| Certificates of deposit | 149,080 | 164,979 | 1,531 | 2,255 | 1.37 | 1.83 | ||||||||||||||||||
| Total interest-bearing deposits | 739,840 | 715,027 | 3,261 | 5,674 | 0.59 | 1.06 | ||||||||||||||||||
| Repurchase agreements | 7,572 | 4,463 | 16 | 16 | 0.29 | 0.48 | ||||||||||||||||||
| Capital lease | 2,988 | 4,314 | 106 | 135 | 4.74 | 4.16 | ||||||||||||||||||
| Note payable | 231 | 266 | 11 | 12 | 6.08 | 6.06 | ||||||||||||||||||
| Subordinated debt (net of issuance costs) | 9,867 | 9,844 | 468 | 468 | 6.32 | 6.34 | ||||||||||||||||||
| FHLBB advances | 45,667 | 42,938 | 472 | 957 | 1.36 | 2.94 | ||||||||||||||||||
| Total interest-bearing liabilities | 806,165 | 776,852 | 4,334 | 7,262 | 0.72 | 1.25 | ||||||||||||||||||
| Demand deposits | 286,608 | 226,182 | ||||||||||||||||||||||
| Other liabilities | 6,847 | 6,560 | ||||||||||||||||||||||
| Shareholders’ equity | 117,984 | 107,606 | ||||||||||||||||||||||
| Total liabilities & shareholders’ equity | $ | 1,217,604 | $ | 1,117,200 | ||||||||||||||||||||
| Net interest income | $ | 28,844 | $ | 25,878 | ||||||||||||||||||||
| Spread on interest-bearing funds | 3.11 | 2.93 | ||||||||||||||||||||||
| Net interest margin (e) |
| 3.32 | 3.24 | |||||||||||||||||||||
| (a) | Includes non-accrual loans. |
| (b) | Includes interest-bearing deposits in other banks and federal funds sold. |
| (c) | Average balances of securities are based on historical cost. |
| (d) | Includes tax exempt income benefit of $514,000 and $432,000, respectively for 2020 and 2019 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2020 and 2019. |
| (e) | Net interest income divided by average interest-earning assets. |