- 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.
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 | ||
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.
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.
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