Salisbury Bancorp, Inc. Reports Record Full Year 2020 Results; Declares 29 Cent Dividend
· *Fourth Quarter and Record Full Year 2020 Net Income of $0.99 and $4.21 per Basic Common Share, Respectively*
· *Common Equity Tier 1 and Total Capital Ratios of 12.3% and 13.6%, Respectively*
· *Non-Performing Assets were 0.44% of Total Assets Compared with 0.35% at December 31, 2019*
· *Book Value and Tangible Book Value Per Common Share Increased 9% and 11% to $43.88 and $38.78 per Common Share, Respectively in 2020*
LAKEVILLE, Conn., Jan. 27, 2021 (GLOBE NEWSWIRE) -- Salisbury Bancorp, Inc. (“Salisbury”), (NASDAQ Capital Market: “SAL”), the holding company for Salisbury Bank and Trust Company (the “Bank”), announced results for its fourth quarter ended December 31, 2020.
The record results for 2020 reflected an increase in income available to common shareholders to $11.8 million, or $4.21 per basic common share, compared with $11.0 million, or $3.95 per basic common share in 2019.
Net income allocated to common shareholders was $2.8 million, or $0.99 per basic common share, for the quarter ended December 31, 2020 (fourth quarter 2020), compared with $4.3 million, or $1.53 per common share (basic), for the third quarter ended September 30, 2020 (third quarter 2020), and $3.0 million, or $1.06 per basic common share, for the fourth quarter ended December 31, 2019 (fourth quarter 2019). Results for fourth quarter 2020 included a loan loss provision of $840 thousand compared to $686 thousand in third quarter 2020 and $417 thousand in fourth quarter 2019.
Salisbury’s President and Chief Executive Officer, Richard J. Cantele, Jr., stated, “2020 was a challenging year for many in the communities in which we operate. I am extremely proud of the resiliency of our employees who navigated the pandemic to provide outstanding service to our customers. During 2020, we processed $100 million of loan applications under the Paycheck Protection Program (“PPP”) in support of our customers and local communities and we worked with our commercial and residential customers to address their needs for temporary payment deferrals in response to the COVID-19 pandemic. I am pleased that as of year-end, there are no outstanding residential or consumer loans on deferral and only fifteen commercial loans remain in some sort of deferral. We reported record earnings for the year as a result of the dedication and hard work of our employees as we experienced record volume in our residential lending business. Unfortunately, COVID-19 will continue to challenge us in 2021. As we enter the new year, we remain focused on providing outstanding customer service and supporting our local communities while prudently growing the bank and enhancing profitability.”
Net-Interest and Dividend Income
Tax equivalent net interest income of $10.0 million for the fourth quarter 2020 decreased $108 thousand, or 1.1%, versus third quarter 2020, and increased $1.2 million, or 13.1%, versus fourth quarter 2019. Tax equivalent interest income of $10.9 million for fourth quarter 2020 decreased $232 thousand, or 2.1%, versus third quarter 2020 and was essentially unchanged compared to fourth quarter 2019. Fourth quarter 2020 interest income included PPP fees and interest of $855 thousand compared with $651 thousand in third quarter 2020. The cost of interest bearing liabilities of $1.0 million for fourth quarter 2020 decreased $124 thousand, or 11.5%, compared to third quarter 2020 and declined $1.1 million, or 53.3% from fourth quarter 2019.
Average earning assets of $1.3 billion for fourth quarter 2020 increased $31.0 million, or 2.5%, versus third quarter 2020, and increased $198.7 million, or 18.9%, versus fourth quarter 2019. Average earning assets for fourth quarter 2020 included average PPP loan balances of $93.4 million, net of deferred fees. Average total interest bearing liabilities of $0.9 billion for fourth quarter 2020 increased $30.1 million, or 3.6%, versus third quarter 2020 and increased $116.9 million, or 15.6%, versus fourth quarter 2019. The increase from fourth quarter 2019 primarily reflected the funding of PPP loans.
The tax equivalent net interest margin for the fourth quarter 2020 was 3.17% compared with 3.29% for the third quarter 2020 and 3.34% for the fourth quarter 2019. See SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income on pages 8-9 of this release for additional details.
Non-Interest Income
Non-interest income of $2.5 million for fourth quarter 2020 decreased $810 thousand compared with third quarter 2020 and increased $57 thousand compared to fourth 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.
Trust and Wealth Advisory fees of $1.1 million were essentially unchanged compared to third quarter 2020 and up slightly from fourth quarter 2019. Assets under administration were $944.3 million as of December 31, 2020 compared with $748.2 million at September 30, 2020 and $777.5 million as of December 31, 2019. Discretionary assets under administration of $555.0 million in fourth quarter 2020 increased from $515.0 million in third quarter 2020 and $498.7 million in fourth quarter 2019. The growth from prior quarters primarily reflected higher market valuations. Non-discretionary assets under administration were $389.4 million as of fourth quarter 2020 compared with $233.2 million in third quarter 2020 and $278.8 million in fourth quarter 2019. The increase from prior quarters primarily reflected higher valuations and net new business activity. The trust and wealth business records nominal annual fees on non-discretionary assets under administration.
Service charges and fees of $858 thousand for fourth quarter 2020 increased $147 thousand versus third quarter 2020 and decreased $234 thousand versus fourth quarter 2019. The increase from third quarter 2020 was primarily due to the reinstatement of deposit fees in late fourth quarter 2020 whereas the decline from fourth quarter 2019 reflected higher deposit fees in the prior year quarter. To help support the financial needs of our customers and the communities in our markets, the Bank waived approximately $200 thousand and $754 thousand of deposit and transaction fees in the fourth quarter and the twelve month period ended December 31, 2020, respectively.
Income from sales and servicing of mortgage loans of $439 thousand in fourth quarter 2020 decreased $297 thousand versus third quarter 2020 and increased $297 thousand from fourth quarter 2019. Mortgage loans of $10.5 million were sold during the fourth quarter 2020 compared with sales of $26.6 million for third quarter 2020 and $3.6 million in fourth quarter 2019.
Non-Interest Expense
Non-interest expense of $8.1 million for fourth quarter 2020 increased $0.8 million versus third quarter 2020 and increased $1.0 million versus fourth quarter 2019. Compensation expense of $4.7 million for fourth quarter 2020 increased $0.6 million from third quarter 2020 and increased $0.7 million versus fourth quarter 2019. The increase from third quarter 2020 and fourth quarter 2019 primarily reflected higher salary expense and incentive compensation as well as higher production accruals, which were driven by increased loan origination volume. Compensation expense for fourth quarter 2019 included a one-time reduction of $328 thousand due to the modification of key terms of agreements related to BOLI policies.
Excluding compensation, other non-interest expenses of $3.3 million for fourth quarter 2020 increased $228 thousand from third quarter 2020 and increased $263 thousand from fourth quarter 2019. The increase from third quarter 2020 primarily reflected higher premises and equipment and professional fees. The increase from fourth quarter 2019 primarily reflected higher professional fees as well as an FDIC assessment credit recorded in the prior year fourth quarter.
The effective income tax rates for fourth quarter 2020, third quarter 2020 and fourth quarter 2019 were 17.5%, 17.3% and 16.1%, respectively. The tax rate in third quarter 2020 and fourth quarter 2019 primarily reflected the non-taxable BOLI proceeds and non-taxable compensation credit related to BOLI recorded in those respective periods.
Full Year Results
Full year 2020 net income available to common shareholders was $11.8 million, or $4.21 per basic common share, compared with $11.0 million, or $3.95 per basic common share for full year 2019. Results for full year 2020 included a loan loss provision of $5.0 million compared with $1.0 million for full year 2019.
Tax equivalent net interest income of $38.8 million for 2020 increased $4.1 million, or 11.9%, from $34.7 million in 2019. Average earning assets of $1.2 billion increased $120.3 million, or 11.4%, from 2019 and average total interest bearing liabilities of $821.1 million increased $51.3 million, or 6.7%, from $769.8 million in 2019. The tax equivalent net interest margin for 2020 was 3.28% compared with 3.27% for 2019.
Non-interest income of $10.3 million for 2020 increased $1.0 million from 2019. The increase primarily reflected higher gains on the sale and servicing of mortgage loans and non-recurring BOLI gains, which were offset by waived deposit fees. Mortgage loans of $59.8 million were sold during full year 2020 compared with sales of $6.4 million for full year 2019.
The effective tax rate for 2020 was 17.0% compared with 17.5% for 2019. The tax rate for 2020 and 2019 reflected the non-taxable BOLI proceeds received and the BOLI compensation credit recorded in those respective periods.
Loans
Gross loans outstanding as of December 31, 2020 of $1.0 billion included net PPP loans of $84.9 million, which are categorized as commercial & industrial loans in the below table. Excluding PPP loans, gross loans receivable were $956.5 million at December 31, 2020, compared with $947.0 million at September 30, 2020, and $936.3 million at December 31, 2019. Including PPP loans, the ratio of gross loans to deposits for fourth quarter 2020 was 92.2% compared with 95.4% for third quarter 2020 and 101.8% for fourth quarter 2019. Balances by loan type for the comparative periods were as follows:
Loan Type Q4 2020 Q3 2020 Q4 2019
Residential Real Estate $ 425,677 $ 429,221 $ 427,441
Commercial Real Estate 342,563 333,412 298,261
Commercial & Industrial 227,148 237,448 169,411
Farm Land 3,198 3,295 3,641
Vacant Land 14,079 13,694 7,893
Municipal 21,512 20,797 21,914
Consumer 7,687 7,686 6,385
Deferred (Fees) Costs (372 ) (959 ) 1,362
Gross Loans Receivable $ 1,041,492 $ 1,044,594 $ 936,308
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 December 31, 2020, loan payments were deferred on 15 commercial loans ($30 million loan balance). There were no outstanding deferrals related to residential and consumer loans as of December 31, 2020.
Non-performing assets increased $1.0 million during fourth quarter 2020 to $5.6 million, or 0.44% of total assets at December 31, 2020, from $4.7 million, or 0.36% of total assets at September 30, 2020, and increased $1.7 million from $3.9 million, or 0.35% of total assets, at December 31, 2019. The increase from third quarter 2020 was primarily driven by one commercial loan for which Salisbury is no longer accruing interest.
The amount of total impaired and potential problem loans increased $3.3 million during the fourth quarter 2020 to $30.1 million, or 2.89% of gross loans receivable, at December 31, 2020 compared to $26.8 million, or 2.55% of gross loans receivable, at September 30, 2020, and increased $8.8 million from $21.3 million, or 2.27% of gross loans receivable, at December 31, 2019. The increase from third quarter 2020 primarily related to one borrower in the hospitality industry whose business has been adversely affected by COVID-19. Salisbury is currently deferring loan payments for this borrower.
Accruing loans receivable 30-to-89 days past due increased $5.2 million during fourth quarter 2020 to $6.9 million, or 0.66% of gross loans receivable, from $1.6 million, or 0.16% of gross loans receivable at September 30, 2020, and increased $4.8 million from $2.1 million, or 0.22% of gross loans receivable at December 31, 2019. The increase from third quarter 2020 included loans of $2.7 million that matured in fourth quarter 2020, most of which are expected to renew in first quarter 2021.
The allowance for loan losses at December 31, 2020 was $13.8 million compared with $13.0 million at September 30, 2020 and $8.9 million at December 31, 2019. The provision for loan losses expense was $0.8 million for fourth quarter 2020 versus $0.7 million for third quarter 2020, and $0.4 million for fourth quarter 2019. The provision for fourth 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 $87 thousand for the fourth quarter 2020, $56 thousand for third quarter 2020 and $368 thousand for the fourth quarter 2019. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, was 1.32% for the fourth quarter 2020, versus 1.24% for third quarter 2020 and 0.95% for fourth quarter 2019. Excluding PPP loans and deferred net fees, the ratio of the allowance for loan losses to gross loans was 1.44% for fourth quarter 2020 compared with 1.37% for third 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 December 31, 2020 increased $33.9 million from September 30, 2020 and increased $209.6 million from December 31, 2019. Deposits at December 31, 2020 included brokered deposits, including CDARS one-way buys, of $18.0 million compared with $18.0 million at September 30, 2020 and $2.9 million at December 31, 2019. Average total deposits for fourth quarter 2020 were $1.1 billion compared with $1.1 billion at September 30, 2020 and $932.4 million at December 31, 2019. Average total deposits for fourth quarter 2020 included average brokered deposits of $18.0 million compared with $24.9 million for third quarter 2020 and $22.1 million for fourth quarter 2019.
FHLB advances of $12.6 million at December 31, 2020 decreased $31.2 million from September 30, 2020 and decreased $38.2 million from December 31, 2019. Salisbury’s excess borrowing capacity at FHLBB was approximately $255 million at December 31, 2020.
Capital
Book value per common share increased $0.89 during the fourth quarter 2020 to $43.88 per share and increased $3.66 from the fourth quarter 2019. Tangible book value per common share increased $0.91 during fourth quarter 2020 to $38.78 and increased $3.80 from the fourth quarter 2019.
Shareholders’ equity increased $2.5 million in fourth quarter 2020 to $124.8 million at December 31, 2020 as net income of $2.8 million, unrealized gains in the Available-For-Sale portfolio of $0.3 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 December 31, 2020, the Bank’s Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 8.90%, 13.57%, and 12.31%, 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 January 27, 2021 meeting. The dividend will be paid on February 26, 2021 to shareholders of record as of February 12, 2021.
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 December 31, 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.
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*Salisbury Bancorp, Inc. and Subsidiary
**CONSOLIDATED BALANCE SHEETS*
(dollars in thousands, except share data) December 31, 2020 December 31, 2019
*ASSETS* (unaudited)
Cash and due from banks $ 10,599 $ 7,406
Interest bearing demand deposits with other banks 82,563 19,479
Total cash and cash equivalents 93,162 26,885
Interest bearing Time Deposits with Financial Institutions 750 750
Securities Available-for-sale at fair value 98,411 91,801 CRA mutual fund at fair value 917 882 Federal Home Loan Bank of Boston stock at cost 1,713 3,242
Loans held-for-sale 2,735 332
Loans receivable, net (allowance for loan losses: $13,754 and $8,895) 1,027,738 927,413
Other real estate owned - 314
Bank premises and equipment, net 20,355 17,385
Goodwill 13,815 13,815
Intangible assets (net of accumulated amortization: $5,206 and $4,884) 674 995
Accrued interest receivable 6,373 3,415
Cash surrender value of life insurance policies 21,182 20,580
Deferred taxes 2,412 1,249
Other assets 3,423 3,155 *Total Assets* $ 1,293,660 $ 1,112,448
*LIABILITIES and SHAREHOLDERS' EQUITY*
Deposits Demand (non-interest bearing) $ 310,769 $ 237,852 Demand (interest bearing) 218,869 153,314 Money market 278,146 239,504 Savings and other 189,776 161,112 Certificates of deposit 131,514 127,724 Total deposits 1,129,074 919,506
Repurchase agreements 7,116 8,530
Federal Home Loan Bank of Boston advances 12,639 50,887
Subordinated debt 9,883 9,859
Note payable 208 246
Finance lease obligations 1,673 1,718
Accrued interest and other liabilities 8,315 8,047 *Total Liabilities* 1,168,908 998,793
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 (774 ) (795 ) Paid-in capital 45,266 44,490 Retained earnings 76,972 68,320 Accumulated other comprehensive income, net 3,004 1,357 *Total Shareholders' Equity* 124,752 113,655 *Total Liabilities and Shareholders' Equity* $ 1,293,660 $ 1,112,448
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*Salisbury Bancorp, Inc. and Subsidiary
**CONSOLIDATED STATEMENTS OF INCOME* (unaudited)
Three months ended Twelve months ended
Periods ended December 31, (in thousands except share data) 2020 2019 2020 2019
*Interest and dividend income*
Interest and fees on loans $ 10,135 $ 9,883 $ 40,796 $ 39,742
Interest on debt securities
Taxable 411 490 1,671 2,223
Tax exempt 159 190 672 545
Other interest and dividends 65 142 295 903
Total interest and dividend income 10,770 10,705 43,434 43,413
*Interest expense*
Deposits 629 1,650 3,890 7,324
Repurchase agreements 3 8 20 24
Finance lease 35 36 141 170
Note payable 3 4 14 16
Subordinated debt 150 156 618 624
Federal Home Loan Bank of Boston advances 133 186 605 1,143
Total interest expense 953 2,040 5,288 9,301
Net interest and dividend income 9,817 8,665 38,146 34,112
*Provision for loan losses* 840 417 5,038 955
Net interest and dividend income after provision for loan losses 8,977 8,248 33,108 33,157
*Non-interest income*
Trust and wealth advisory 1,066 1,022 4,194 3,995
Service charges and fees 858 1,092 3,072 4,028
Gains on sales of mortgage loans, net 422 67 1,442 116
Mortgage servicing, net 17 75 179 307
(Losses) gains on CRA mutual fund (3 ) (4 ) 19 25
(Losses) gains on available-for-sale securities, net (21 ) - 196 263
BOLI income and gains 110 139 1,096 392
Other 27 28 125 124
Total non-interest income 2,476 2,419 10,323 9,250
*Non-interest expense*
Salaries 3,453 3,055 11,828 12,048
Employee benefits 1,289 976 4,533 4,384
Premises and equipment 1,122 1,066 4,019 4,016
Data processing 544 581 2,211 2,201
Professional fees 721 523 2,741 2,213
OREO gains, losses and write-downs, net - 3 - 408
Collections and other real estate owned 111 108 323 436
FDIC insurance 135 (33 ) 466 261
Marketing and community support 154 171 573 619
Amortization of intangibles 74 91 321 388
Other 451 539 2,023 1,938
Total non-interest expense 8,054 7,080 29,038 28,912
Income before income taxes 3,399 3,587 14,393 13,495
*Income tax provision* 596 578 2,453 2,359
*Net income* $ 2,803 $ 3,009 $ 11,940 $ 11,136
*Net income available to common stock* $ 2,764 $ 2,960 $ 11,775 $ 10,976
Basic earnings per common share $ 0.99 $ 1.06 $ 4.21 $ 3.95
Diluted earnings per common share $ 0.98 $ 1.06 $ 4.20 $ 3.93
Common dividends per share $ 0.29 $ 0.28 $ 1.16 $ 1.12*Salisbury Bancorp, Inc. and Subsidiary
**SELECTED CONSOLIDATED FINANCIAL DATA* (unaudited)
At or for the quarters ended
(in thousands, except per share amounts and ratios) Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019
Total assets $ 1,293,660 $ 1,292,760 $ 1,287,137 $ 1,145,751 $ 1,112,448
Loans receivable, net 1,027,738 1,031,593 1,039,524 949,142 927,413
Total securities 101,043 99,794 93,717 94,966 95,924
Deposits 1,129,074 1,095,141 1,085,599 965,620 919,506
FHLBB advances 12,639 43,880 55,118 40,932 50,887
Shareholders’ equity 124,752 122,240 118,444 116,143 113,655
Wealth assets under administration 944,349 748,188 704,052 639,457 777,503
Discretionary wealth assets under administration 554,997 514,988 480,456 425,359 498,737
Non-discretionary wealth assets under administration 389,352 233,200 223,596 214,098 278,766
Non-performing loans 5,648 4,681 4,815 3,188 3,621
Non-performing assets 5,648 4,681 4,815 3,188 3,934
Accruing loans past due 30-89 days 6,850 1,638 2,656 6,109 2,077
Net interest and dividend income 9,817 9,925 9,617 8,787 8,665
Net interest and dividend income, tax equivalent^(^1) 9,993 10,101 9,786 8,954 8,839
Provision for loan losses 840 686 1,806 1,706 417
Non-interest income 2,476 3,286 2,316 2,245 2,419
Non-interest expense 8,054 7,259 6,789 6,936 7,080
Income before income taxes 3,399 5,266 3,338 2,390 3,587
Income tax provision 596 910 604 343 578
Net income 2,803 4,356 2,734 2,047 3,009
Net income allocated to common shareholders 2,764 4,288 2,691 2,013 2,960
*Per share data*
Basic earnings per common share $ 0.99 $ 1.53 $ 0.96 $ 0.72 $ 1.06
Diluted earnings per common share 0.98 1.53 0.96 0.72 1.06
Dividends per common share 0.29 0.29 0.29 0.29 0.28
Book value per common share 43.88 42.99 41.66 41.05 40.22
Tangible book value per common share - Non-GAAP ⁽^2⁾ 38.78 37.87 36.51 35.85 34.98
*Common shares outstanding at end of period (in thousands)* 2,843 2,843 2,843 2,829 2,826
*Weighted average common shares outstanding, to calculate basic earnings per share (in thousands) * 2,803 2,799 2,796 2,788 2,781
*Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands) * 2,811 2,807 2,803 2,797 2,794
*Profitability ratios*
Net interest margin (tax equivalent) ^(1) 3.17 % 3.29 % 3.31 % 3.35 % 3.34 %
Efficiency ratio ^(3) 63.88 56.33 56.23 61.36 61.81
Effective income tax rate 17.52 17.28 18.11 14.35 16.11
Return on average assets 0.85 1.34 0.89 0.73 1.07
Return on average common shareholders’ equity 8.97 14.31 9.36 7.07 10.56
*Credit quality ratios*
Non-performing loans to loans receivable, gross 0.54 % 0.45 % 0.46 % 0.33 % 0.39 %
Accruing loans past due 30-89 days to loans receivable, gross 0.66 0.16 0.25 0.64 0.22
Allowance for loan losses to loans receivable, gross 1.32 1.24 1.18 1.11 0.95
Allowance for loan losses to non-performing loans 243.5 277.8 256.9 333.0 245.64
Non-performing assets to total assets 0.44 0.36 0.37 0.28 0.35
*Capital ratios*
Common shareholders' equity to assets 9.64 % 9.46 % 9.20 % 10.14 % 10.22 %
Tangible common shareholders' equity to tangible assets - Non-GAAP^(^2) 8.62 8.42 8.16 8.97 9.01
Tier 1 leverage capital ^(4) 8.90 8.93 8.95 9.65 9.60
Total risk-based capital ^(4) 13.57 13.60 13.15 12.97 12.84
Common equity tier 1 capital ^(4) 12.31 12.35 11.90 11.79 11.83
^(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.*
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*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) Q4 2020 Q3 2020 Q2 2020 Q1 2020
Q4 2019
*Common Shareholders' Equity* $ 124,752 $ 122,240 $ 118,444 $ 116,143 $ 113,655
Less: Goodwill (13,815 ) (13,815 ) (13,815 ) (13,815 ) (13,815 )
Less: Intangible assets (674 ) (748 ) (825 ) (908 ) (995 )
*Tangible Common Shareholders' Equity* $ 110,263 $ 107,677 $ 103,804 $ 101,420 $ 98,845
Total Assets $ 1,293,660 $ 1,292,760 $ 1,287,137 $ 1,145,751 $ 1,112,448
Less: Goodwill (13,815 ) (13,815 ) (13,815 ) (13,815 ) (13,815 )
Less: Intangible assets (674 ) (748 ) (825 ) (908 ) (995 )
*Tangible Total Assets* $ 1,279,171 $ 1,278,197 $ 1,272,497 $ 1,131,028 $ 1,097,638
Common Shares outstanding 2,843 2,843 2,843 2,829 2,826
Book value per Common Share – GAAP $ 43.88 $ 42.99 $ 41.66 $ 41.05 $ 40.22
Tangible book value per Common Share - Non-GAAP 38.78 37.87 36.51 35.85 34.98
Tangible common shareholders’ equity to tangible total assets - Non-GAAP 8.62 % 8.42 % 8.16 % 8.97 % 9.01 %
*Consolidated:*
Non-interest expense $ 8,054 $ 7,259 $ 6,789 $ 6,936 $ 7,080
Less: Amortization of core deposit intangibles (74 ) (78 ) (83 ) (87 ) (91 )
Less: Foreclosed property expense including OREO gains, losses and
Write downs - 2 (7 ) 13 (27 )
Adjusted non-interest expense $ 7,980 $ 7,183 $ 6,699 $ 6,862 $ 6,962
Net interest and dividend income, tax equivalent $ 9,993 $ 10,101 $ 9,786 $ 8,955 $ 8,839
Non-interest income 2,476 3,286 2,316 2,245 2,419
Losses (gains) on securities 24 (34 ) (188 ) (15 ) 4
BOLI proceeds - (601 ) - - -
Adjusted revenue $ 12,493 $ 12,752 $ 11,914 $ 11,185 $ 11,262
*Efficiency Ratio – Non-GAAP *^*1* 63.88 % 56.33 % 56.23 % 61.36 % 61.81 %
^1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q4 2020: 62.62%; Q3 2020: 54.76%; Q2 2020: 54.29%; Q1 2020: 59.83%; Q4 2019: 60.19%. If Q4 2020 results were normalized to exclude the impact of the COVID-19 pandemic, revenue would be adjusted to include waived deposit fees of $196 thousand and exclude PPP loan interest and fee income of $239 thousand and $615 thousand, respectively. The resulting normalized efficiency ratio for Q4 2020 would have been 67.44% or 66.82%, excluding trust & wealth advisory.
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*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) Q4 2020 Q3 2020 Q4 2019 Q4 2020 Q3 2020 Q4 2019 Q4 2020 Q3 2020 Q4 2019
Loans (a)(d) $ 1,043,613 $ 1,049,313 $ 928,787 $ 10,257 $ 10,485 $ 9,998 3.90 % 3.97 % 4.31 %
Securities (c)(d) 92,633 89,220 92,626 624 606 739 2.70 2.72 3.19
FHLBB stock 2,594 3,440 2,695 34 34 44 5.28 3.96 6.53
Short term funds (b) 112,463 78,306 28,474 31 53 98 0.11 0.27 1.38
Total earning assets 1,251,303 1,220,279 1,052,582 10,946 11,178 10,879 3.48 3.64 4.13
Other assets 63,937 64,943 62,458
Total assets $ 1,315,240 $ 1,285,222 $ 1,115,040
Interest-bearing demand deposits $ 212,375 $ 195,253 $ 157,180 110 110 144 0.21 0.22 0.37
Money market accounts 288,629 258,257 236,335 150 195 601 0.21 0.30 1.02
Savings and other 188,080 176,963 166,516 59 69 288 0.12 0.15 0.69
Certificates of deposit 130,809 135,238 144,678 310 390 617 0.94 1.15 1.71
Total interest-bearing deposits 819,893 765,711 704,709 629 764 1,650 0.31 0.40 0.94
Repurchase agreements 9,220 12,218 6,246 3 6 8 0.15 0.20 0.51
Capital lease 2,897 2,928 3,109 35 35 36 4.81 4.80 4.63
Note payable 212 221 249 3 3 4 6.10 6.08 6.43
Subordinated debt (f) 9,879 9,872 9,854 150 156 156 6.06 6.32 6.33
FHLBB advances 23,491 44,522 24,549 133 113 186 2.21 0.99 3.03
Total interest-bearing liabilities 865,592 835,472 748,716 953 1,077 2,040 0.44 0.51 1.09
Demand deposits 318,370 321,392 246,175
Other liabilities 7,267 7,592 7,109
Shareholders’ equity 124,011 120,766 113,040
Total liabilities & shareholders’ equity $ 1,315,240 $ 1,285,222 $ 1,115,040
Net interest income $ 9,993 $ 10,101 $ 8,839
Spread on interest-bearing funds 3.04 3.13 3.04
Net interest margin (e) 3.17 3.29 3.34
(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, $176,000 and $174,000, respectively, for Q4 2020, Q3 2020 and Q4 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.
(f) Net of issuance costs.
*Salisbury Bancorp, Inc. and Subsidiary*
*SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income (unaudited)*
Twelve months ended December 31, Average Balance Income / Expense Average Yield / Rate
(dollars in thousands) 2020 2019 2020 2019 2020 2019
Loans (a)(d) $ 1,019,999 $ 922,906 $ 41,267 $ 40,176 4.02 % 4.35 %
Securities (c)(d) 89,616 96,150 2,563 2,940 2.86 3.06
FHLBB stock 3,163 3,287 141 227 4.45 6.91
Short term funds (b) 65,935 36,109 154 675 0.23 1.87
Total earning assets 1,178,713 1,058,452 44,125 44,018 3.73 4.16
Other assets 63,434 58,204
Total assets $ 1,242,147 $ 1,116,656
Interest-bearing demand deposits $ 183,870 $ 155,463 441 602 0.24 0.39
Money market accounts 256,402 222,090 1,145 2,333 0.45 1.05
Savings and other 175,204 175,011 464 1,517 0.26 0.87
Certificates of deposit 144,489 159,862 1,840 2,872 1.27 1.80
Total interest-bearing deposits 759,965 712,426 3,890 7,324 0.51 1.03
Repurchase agreements 7,986 4,913 20 24 0.25 0.49
Capital lease 2,965 4,010 141 170 4.75 4.24
Note payable 226 262 14 16 6.08 6.11
Subordinated debt (net of issuance costs) 9,870 9,847 618 624 6.26 6.34
FHLBB advances 40,093 38,303 605 1,143 1.49 2.98
Total interest-bearing liabilities 821,105 769,761 5,288 9,301 0.64 1.21
Demand deposits 294,588 231,221
Other liabilities 6,956 6,699
Shareholders’ equity 119,498 108,975
Total liabilities & shareholders’ equity $ 1,242,147 $ 1,116,656
Net interest income $ 38,837 $ 34,718
Spread on interest-bearing funds 3.09 2.95
Net interest margin (e) 3.28 3.27
(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 $690,000 and $605,000, 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
Source: Salisbury Bancorp, Inc.Salisbury Contact: Richard J. Cantele, Jr., President and Chief Executive Officer
860-435-9801 or rcantele@salisburybank.com