EX-99.1 2 sal1015form8kexh99_1.htm EXHIBIT 99.1

Exhibit 99.1

 

Wednesday, October 20, 2021

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 RESULTS FOR THIRD QUARTER 2021

 

·Third Quarter 2021 Net Income of $1.21 per Basic Common Share
·Gross Loan Balances Increased $47 Million, or 5%, During Third Quarter 2021[1]
·Non-performing Assets were 0.34% of Total Assets Compared with 0.44% at December 31, 2020
·Common Equity Tier 1 and Total Risk-Based Capital Ratios of 12.95% and 14.20%, Respectively

 

Lakeville, Connecticut, October 20, 2021 /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, 2021.

Net income available to common shareholders was $3.4 million, or $1.21 per basic common share, for Salisbury’s third quarter ended September 30, 2021 (third quarter 2021), compared with $4.3 million, or $1.53 per basic common share, for the second quarter ended June 30, 2021 (second quarter 2021), and $4.3 million, or $1.53 per basic common share, for the third quarter ended September 30, 2020 (third quarter 2020). Net income for third quarter 2021 included a provision for loan losses of $0.4 million compared with a net release of credit reserves of $1.1 million in second quarter 2021.

Salisbury’s President and Chief Executive Officer, Richard J. Cantele, Jr., stated, “We reported solid results for the third quarter, which included robust organic growth in both our residential and commercial loan portfolios. Credit quality and capital ratios remained strong and loan payment deferrals declined to only two commercial loans at the end of the third quarter. We are cautiously optimistic that the business environment will remain favorable as we enter the fourth quarter and we are focused on driving disciplined loan growth across our markets. In September, we hired two commercial lenders and one residential lender as an integral part of this strategy. Salisbury Bank is well-positioned to meet the needs of our customers, and our employees remain committed to providing outstanding customer service.”

Net Interest and Dividend Income

Tax equivalent net interest income of $10.3 million for the third quarter 2021 increased $0.6 million, or 6.2%, versus second quarter 2021, and increased $0.2 million, or 2.4% compared with third quarter 2020. Tax equivalent interest income of $11.2 million for third quarter 2021 increased $0.4 million, or 3.6%, versus second quarter 2021 and was essentially unchanged from third quarter 2020.

The cost of interest-bearing liabilities of $0.8 million for third quarter 2021 decreased $0.2 million, or 20.9%, compared to second quarter 2021 and declined $0.2 million, or 22.4% from third quarter 2020. Interest expense for second quarter 2021 included approximately $180 thousand for interest and the amortization of issuance costs on subordinated debt, which Salisbury issued in 2015 and fully redeemed on May 28, 2021. Second quarter 2021 also included interest expense and issuance costs of $233 thousand on subordinated debt that Salisbury issued in March 2021.

Average earning assets of $1.4 billion for third quarter 2021 increased $32.8 million, or 2.4% from second quarter 2021, and increased $185.6 million, or 15.2%, versus third quarter 2020. The growth in average earning assets from comparative periods primarily reflected higher average short-term fund balances due to deposit growth and higher average balances in the available-for-sale portfolio. Average earning assets for third quarter 2021 included average PPP loan balances of $51.8 million, net of deferred fees, compared with $80.4 million in second quarter 2021 and $97.0 million in third quarter 2020. Average total interest bearing liabilities of $0.9 billion for third quarter 2021 decreased $9.6 million, or 1.0%, from second quarter 2021 primarily due to lower average subordinated debt and deposit balances. Average total interest bearing liabilities for third quarter 2021 increased $113.9 million, or 13.6%, versus third quarter 2020 primarily due to higher average deposit and subordinated debt balances, which were partially offset by lower average borrowings.

The tax equivalent net interest margin for third quarter 2021 was 2.92% compared with 2.82% for second quarter 2021 and 3.29% for third quarter 2020. Excluding the impact of PPP loans, the tax equivalent net interest margin for third quarter 2021 was 2.78% compared with 2.76% for second quarter 2021 and 3.35% for third quarter 2020. See SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income on page 9 on this release for additional details.

[1] Excludes loans granted under the Paycheck Protection Program (PPP) by the Small Business Administration (SBA).

 

   

 

Non-Interest Income

Non-interest income of $2.8 million for third quarter 2021 decreased $131 thousand versus second quarter 2021 and decreased $446 thousand versus third quarter 2020.

Trust and Wealth Advisory fees of $1.3 million for third quarter 2021 increased $32 thousand from second quarter 2021 and increased $218 thousand versus third quarter 2020. The increase from second quarter 2021 primarily reflected higher asset-based fees, which were partially offset by lower seasonal tax preparation fees. The increase from third quarter 2020 primarily reflected higher asset-based fees. Assets under administration were $973.2 million at September 30, 2021 compared with $944.3 million at December 31, 2020 and $748.2 million at September 30, 2020. Discretionary assets under administration of $608.2 million in third quarter 2021 increased from $555.0 million in fourth quarter 2020 and $515.0 million in third quarter 2020 primarily due to higher market valuations. Non-discretionary assets under administration of $365.0 million in third quarter 2021 decreased from $389.4 million in fourth quarter 2020 and increased from $233.2 million in third quarter 2020. The decline from fourth quarter 2020 primarily reflected the lower valuation of certain partnership assets under administration whereas the increase from third quarter 2020 reflected the addition of partnership assets under administration for an existing client relationship. The trust and wealth business records only a nominal annual fee on this non-discretionary relationship.

Service charges and fees of $1.2 million for third quarter 2021 decreased $163 thousand versus second quarter 2021 and increased $500 thousand versus third quarter 2020. The decrease from second quarter 2021 primarily reflected lower loan prepayment fees whereas the increase from third quarter 2020 primarily reflected higher deposit fees. Salisbury waived approximately $289 thousand in deposit fees in third quarter 2020 due to the COVID-19 pandemic. Income from mortgage sales and servicing decreased $88 thousand versus second quarter 2021 and decreased $628 thousand versus third quarter 2020 due to lower sales volume of residential mortgage loans to Federal Home Loan Bank of Boston (FHLBB).

Non-interest income for the third quarter 2021 included BOLI income of $135 thousand compared with income of $125 thousand in second quarter 2021 and $719 thousand in third quarter 2020, which included a non-recurring non-taxable gain of $601 thousand for proceeds received due to the death of a covered former employee. Non-interest income for third quarter 2021 also included a pre-tax gain of $73 thousand primarily from the sale of Salisbury’s operations center in Canaan, Connecticut.

Non-Interest Expense

Non-interest expense of $8.3 million for third quarter 2021 increased $198 thousand versus second quarter 2021 and increased $1.0 million versus third quarter 2020. Compensation expense of $4.7 million for third quarter 2021 decreased $76 thousand from second quarter 2021 and increased $508 thousand versus third quarter 2020. The decrease from second quarter 2021 primarily reflected lower incentive and production accruals and lower benefits expense, which were partly offset by lower deferred loan origination expenses. The increase from third quarter 2020 primarily reflected higher salary and benefits expense and lower deferred loan origination expenses.

Excluding compensation, other non-interest expenses for third quarter 2021 increased $274 thousand from second quarter 2021 and increased $517 thousand from third quarter 2020. The increase from comparative quarters primarily reflected higher professional fees, higher FDIC insurance and higher marketing expenses. Expenses for third quarter 2021 also included a pre-tax loss of $144 thousand on the pending sale of the building housing the Bank’s branch in Poughkeepsie, New York. Upon completion of the sale, which is expected to occur in fourth quarter 2021, Salisbury will relocate this branch to leased space nearby. The increase in professional fees from second quarter 2021 reflected higher investment management, legal and consulting fees, which were partially offset by lower audit fees. The increase in professional fees from third quarter 2020 primarily reflected higher investment management fees. The increase in marketing costs reflected Salisbury’s ongoing web site redesign and branding initiatives.

The effective income tax rates for third quarter 2021, second quarter 2021 and third quarter 2020 were 20.1%, 21.2% and 17.3%, respectively. The higher tax rate in 2021 primarily reflected a lower mix of tax-exempt income from municipal bonds, tax advantaged loans and bank-owned life insurance on a comparatively higher level of pre-tax income.

Loans

Gross loans receivable of $1.1 billion at September 30, 2021 increased $25.6 million, or 2.4%, from second quarter 2021 and $26.0 million, or 2.5%, from third quarter 2020. Excluding PPP loans, gross loans receivable increased $46.8 million, or 4.8%, from second quarter 2021 and $85.2 million, or 9.0%, from third quarter 2020 reflecting strong growth in both the residential and commercial portfolios.

   

 

The increase in residential real estate balances during third quarter 2021 reflected continued strong origination volume and lower sales to FHLBB. Approximately $1.8 million of residential loans were sold to FHLB Boston in third quarter 2021 compared with $7.1 million during second quarter 2021 and $26.6 million in third quarter 2020. The ratio of gross loans to deposits for third quarter 2021 was 83.0% compared with 84.1% for second quarter 2021 and 95.4% for third quarter 2020. Balances by loan type for the comparative periods were as follows:

Loan Type    Q3 2021      Q2 2021      Q3 2020  
Residential Real Estate  $454,468   $428,137   $429,221 
Commercial Real Estate   361,965    354,629    333,412 
Commercial & Industrial ex PPP Loans   167,528    156,849    137,589 
PPP Loans   40,652    61,908    99,859 
Commercial & Industrial – Total   208,180    218,757    237,448 
Farm Land   3,409    3,529    3,295 
Vacant Land   13,698    13,006    13,694 
Municipal   18,061    18,341    20,797 
Consumer   11,152    9,543    7,686 
Deferred (Fees)/Costs   (314)   (889)   (959)
Gross Loans Receivable  $1,070,619   $1,045,053   $1,044,594 
Gross Loans Receivable ex PPP  $1,029,967   $983,145   $944,735 

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, 2021, loan payments were deferred on 2 commercial loans ($3 million loan balance) compared with 10 commercial loan deferrals ($20 million loan balance) as of June 30, 2021. There were no outstanding residential and consumer loan deferrals as of September 30, 2021.

Non-performing assets were $5.0 million, or 0.34% of total assets at September 30, 2021, compared with $5.6 million, or 0.44% of total assets at December 31, 2020, and $4.7 million, or 0.36% of total assets, at September 30, 2020.

The amount of total impaired and potential problem loans was $45.7 million, or 4.27% of gross loans receivable, at September 30, 2021 compared with $30.1 million, or 2.90% of gross loans receivable, at December 31, 2020 and $26.8 million, or 2.56% of gross loans receivable, at September 30, 2020. The increase from year-end 2020 primarily reflected the reduction of internal risk ratings on loans to certain borrowers in the hospitality and entertainment and recreation industries due to COVID-19.

Accruing loans receivable 30-to-89 days past due decreased to $909 thousand, or 0.08% of gross loans receivable, at September 30, 2021 compared with $6.9 million, or 0.66% of gross loans receivable, at December 31, 2020 and $1.6 million, or 0.16% of gross loans receivable, at September 30, 2020.

The allowance for loan losses for third quarter 2021 was $13.2 million compared with $12.7 million for second quarter 2021 and $13.8 million for fourth quarter 2020. The third quarter 2021 included a provision expense of $0.4 million compared with a net reserve release of $1.1 million in first quarter 2021 and a charge of $0.7 million in the third quarter 2020. The provision expense for third quarter 2021 was primarily driven by loan growth and changes to certain qualitative factors reflecting the continued increase in residential housing prices in the Bank’s market area and an increase in commercial construction loan exposure. Net loan (recoveries) charge-offs were ($60) thousand for the third quarter 2021, $103 thousand for second quarter 2021 and $87 thousand for the fourth quarter 2020. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, excluding PPP loans, was 1.28% for the third quarter 2021, versus 1.29% for second quarter 2021 and 1.44% for fourth quarter 2020. Similarly, reserve coverage, as measured by the ratio of the allowance for loan losses to non-performing loans was 263% for the third quarter 2021, versus 229% for second quarter 2021 and 244% for fourth 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 were $1.3 billion at September 30, 2021 compared with $1.1 billion at December 31, 2020 and $1.1 billion at September 30, 2020. Deposits at September 30, 2021 included brokered deposits, including CDARS one-way buys, of $7.9 compared with $18.0 million at December 31, 2020 and $18.0 million at September 30, 2020. Average total deposits for the third quarter 2021 were $1.3 billion compared with $1.3 billion for the second quarter 2021 and $1.1 billion for the third quarter 2020. Average total deposits for the third quarter 2021 included average brokered deposits of $7.8 million compared with $15.4 million for second quarter 2021 and $24.9 million for third quarter 2020.

Advances from FHLBB were $8.9 million at September 30, 2021 compared with $12.6 million and $43.9 million at December 31, 2020 and September 30, 2020, respectively. Salisbury’s excess borrowing capacity at FHLBB was approximately $252 million at September 30, 2021.

Capital

Shareholders’ equity increased $1.8 million in the third quarter to $133.5 million at September 30, 2021 as net income of $3.5 million and restricted stock activity of $0.2 million were partly offset by common stock dividends paid of $0.9 million and unrealized losses in the available-for-sale securities portfolio of $1.0 million. Book value per common share increased $0.64 during the third quarter 2021 to $46.66 per share and increased $3.67 from the third quarter 2020. Tangible book value per common share increased $0.66 during third quarter 2021 to $41.67 and increased $3.80 from third quarter 2020.

The Bank’s regulatory capital ratios remain in compliance with regulatory “well capitalized” requirements. At September 30, 2021, the Bank’s Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 9.31%, 14.20%, and 12.95%, respectively, compared with regulatory “well capitalized” minimums of 5.00%, 10.00%, and 6.5%, respectively.

During third quarter 2021, Salisbury did not repurchase any of its outstanding common stock pursuant to its stock repurchase plan adopted in March 2021, which authorizes Salisbury to repurchase Salisbury’s common stock in amounts up to an aggregate of five percent (5%) of the outstanding shares of Salisbury’s common stock from time to time over a period of twelve (12) months.

Dividend on Common Shares

The Board of Directors of Salisbury approved a quarterly cash dividend of $0.31 per common share that will be paid on November 26, 2021 to shareholders of record as of November 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 September 30, 2021, are available in the Shareholder Relations section of Salisbury’s website at salisburybank.com under Shareholder Relations/News & Market Information/Presentations.

   

 

Salisbury Bancorp, Inc. and Subsidiary

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)   

September 30, 2021

(unaudited) 

      December 31, 2020  
ASSETS          
Cash and due from banks  $7,874   $10,599 
Interest bearing demand deposits with other banks   158,421    82,563 
Total cash and cash equivalents   166,295    93,162 
Interest bearing Time Deposits with Financial Institutions   750    750 
Securities          
Available-for-sale at fair value   175,568    98,411 
CRA mutual fund at fair value   907    917 
Federal Home Loan Bank of Boston stock at cost   1,504    1,713 
Loans held-for-sale   639    2,735 
Loans receivable, net (allowance for loan losses: $13,168 and $13,754)   1,057,451    1,027,738 
Bank premises and equipment, net   20,056    20,355 
Goodwill   13,815    13,815 
Intangible assets (net of accumulated amortization: $5,405 and $5,207)   476    674 
Accrued interest receivable   5,932    6,373 
Cash surrender value of life insurance policies   25,067    21,182 
Deferred taxes   2,776    2,412 
Other assets   5,613    3,423 
Total Assets  $1,476,849   $1,293,660 
LIABILITIES and SHAREHOLDERS' EQUITY          
Deposits          
Demand (non-interest bearing)  $392,322   $310,769 
Demand (interest bearing)   220,533    218,869 
Money market   328,392    278,146 
Savings and other   224,286    189,776 
Certificates of deposit   124,095    131,514 
Total deposits   1,289,628    1,129,074 
Repurchase agreements   10,450    7,116 
Federal Home Loan Bank of Boston advances   8,905    12,639 
Subordinated debt   24,460    9,883 
Note payable   180    208 
Finance lease obligations   1,631    1,673 
Accrued interest and other liabilities   8,062    8,315 
Total Liabilities   1,343,316    1,168,908 
Shareholders' Equity          
Common stock - $0.10 per share par value          
Authorized: 5,000,000;          
Issued: 2,861,697 and 2,843,292          
Outstanding: 2,861,697 and 2,843,292   286    284 
Unearned compensation – restricted stock awards   (1,075)   (774)
Paid-in capital   46,278    45,264 
Retained earnings   86,740    76,974 
Accumulated other comprehensive income, net   1,304    3,004 
Total Shareholders' Equity   133,533    124,752 
Total Liabilities and Shareholders' Equity  $1,476,849   $1,293,660 

 

   

 

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) 2021      2020      2021      2020  
Interest and dividend income                    
Interest and fees on loans  $10,264   $10,362   $30,642   $30,662 
Interest on debt securities                    
Taxable   486    396    1,398    1,260 
Tax exempt   172    157    506    513 
Other interest and dividends   79    87    174    229 
Total interest and dividend income   11,001    11,002    32,720    32,664 
Interest expense                    
Deposits   532    764    1,652    3,261 
Repurchase agreements   5    6    13    16 
Finance lease   33    35    102    106 
Note payable   3    3    9    11 
Subordinated debt   233    156    767    468 
Federal Home Loan Bank of Boston advances   30    113    96    472 
Total interest expense   836    1,077    2,639    4,334 
Net interest and dividend income   10,165    9,925    30,081    28,330 
Provision (release) for loan losses   400    686    (517)   4,198 
Net interest and dividend income after provision (release)  for loan losses   9,765    9,239    30,598    24,132 
Non-interest income                    
Trust and wealth advisory   1,286    1,068    3,685    3,129 
Service charges and fees   1,211    711    3,536    2,214 
Mortgage banking activities, net   108    736    912    1,182 
(Losses) gains on CRA mutual fund   (4)   —    (18)   22 
Gains (losses) on securities, net   7    34    (2)   216 
Bank-owned life insurance (“BOLI”) income   135    719    386    986 
Gain on sale of assets   73    —    73    — 
Other   24    18    81    97 
Total non-interest income   2,840    3,286    8,653    7,846 
Non-interest expense                    
Salaries   3,361    3,114    9,664    8,375 
Employee benefits   1,322    1,061    3,990    3,244 
Premises and equipment   1,060    1,005    3,034    2,897 
Write-down of assets   144    —    144    — 
Data processing   632    569    1,824    1,666 
Professional fees   735    635    2,090    2,020 
Collections, OREO, and loan related   120    108    317    212 
FDIC insurance   146    123    370    331 
Marketing and community support   256    126    552    419 
Amortization of intangibles   61    78    198    247 
Other   447    440    1,448    1,572 
Total non-interest expense   8,284    7,259    23,631    20,983 
Income before income taxes   4,321    5,266    15,620    10,995 
Income tax provision   868    910    3,288    1,858 
Net income  $3,453   $4,356   $12,332   $9,137 
Net income available to common shareholders  $3,400   $4,288   $12,148   $9,006 
                     
Basic earnings per common share  $1.21   $1.53   $4.32   $3.22 
Diluted earnings per common share  $1.20   $1.53   $4.30   $3.21 
Common dividends per share  $0.31   $0.29   $0.90   $0.87 
 
 

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 2021      Q2 2020      Q1 2021      Q4 2020      Q3 2020  
Total assets  $1,476,849   $1,436,666   $1,403,129   $1,293,660   $1,292,760 
Loans receivable, net   1,057,451    1,032,345    1,041,185    1,027,738    1,031,593 
Total securities   177,979    152,943    129,960    101,041    99,794 
Deposits   1,289,628    1,243,369    1,211,171    1,129,074    1,095,141 
FHLBB advances   8,905    10,152    11,396    12,639    43,880 
Shareholders’ equity   133,533    131,709    127,242    124,752    122,240 
Wealth assets under administration   973,198    970,306    902,141    944,349    748,188 
Discretionary wealth assets under administration   608,228    614,312    578,199    554,997    514,988 
Non-discretionary wealth assets under administration   364,970    355,994    323,942    389,352    233,200 
Non-performing loans   5,001    5,539    5,706    5,648    4,681 
Non-performing assets   5,001    5,539    5,706    5,648    4,681 
Accruing loans past due 30-89 days   909    1,400    2,374    6,850    1,638 
Net interest and dividend income   10,165    9,565    10,350    9,817    9,925 
Net interest and dividend income, tax equivalent(1)   10,345    9,739    10,520    9,993    10,101 
Provision (release) expense for loan losses   400    (1,075)   158    840    686 
Non-interest income   2,840    2,971    2,841    2,476    3,286 
Non-interest expense   8,284    8,086    7,259    8,054    7,259 
Income before income taxes   4,321    5,525    5,774    3,399    5,266 
Income tax provision   868    1,172    1,248    596    910 
Net income   3,453    4,353    4,526    2,803    4,356 
Net income allocated to common shareholders   3,400    4,287    4,462    2,764    4,288 
                          
Per share data                         
Basic earnings per common share  $1.21   $1.53   $1.59   $0.99   $1.53 
Diluted earnings per common share   1.20    1.52    1.59    0.98    1.53 
Dividends per common share   0.31    0.30    0.29    0.29    0.29 
Book value per common share   46.66    46.02    44.72    43.88    42.99 
Tangible book value per common share - Non-GAAP ⁽2⁾   41.67    41.01    39.65    38.78    37.87 
Common shares outstanding at end of period (in thousands)   2,862    2,862    2,845    2,843    2,843 
Weighted average common shares outstanding, to calculate basic earnings per share (in thousands)   2,817    2,810    2,804    2,803    2,799 
Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands)   2,843    2,829    2,815    2,811    2,807 
                          
Profitability ratios                         
Net interest margin (tax equivalent) (1)   2.92%   2.82%   3.34%   3.17%   3.29%
Efficiency ratio (3)   61.63    63.07    53.75    63.88    56.33 
Effective income tax rate   20.09    21.21    21.61    17.52    17.28 
Return on average assets   0.93    1.21    1.38    0.85    1.34 
Return on average common shareholders’ equity   10.27    13.51    14.53    8.97    14.31 
                          
Credit quality ratios                         
Non-performing loans to loans receivable, gross   0.47%   0.53%   0.54%   0.54%   0.45%
Accruing loans past due 30-89 days to loans receivable, gross   0.08    0.13    0.23    0.66    0.16 
Allowance for loan losses to loans receivable, gross   1.23    1.22    1.32    1.32    1.24 
Allowance for loan losses to non-performing loans   263.3    229.4    243.4    243.5    277.8 
Non-performing assets to total assets   0.34    0.39    0.41    0.44    0.36 
                          
Capital ratios                         
Common shareholders' equity to assets   9.04%   9.17%   9.07%   9.64%   9.46%
Tangible common shareholders' equity to tangible assets - Non-GAAP(2)   8.15    8.25    8.12    8.62    8.42 
Tier 1 leverage capital (4)   9.31    9.33    9.83    8.90    8.93 
Total risk-based capital (4)   14.20    14.67    14.58    13.57    13.60 
Common equity tier 1 capital (4)   12.95    13.42    13.33    12.31    12.35 

 

(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 2021      Q2 2020      Q1 2021      Q4 2020      Q3 2020  
Common Shareholders' Equity  $133,533   $131,709   $127,242   $124,752   $122,240 
Less: Goodwill   (13,815)   (13,815)   (13,815)   (13,815)   (13,815)
Less: Intangible assets   (476)   (538)   (603)   (674)   (748)
Tangible Common Shareholders' Equity  $119,242   $117,356   $112,824   $110,263   $107,677 
Total Assets  $1,476,849   $1,436,666   $1,403,129   $1,293,660   $1,292,760 
Less: Goodwill   (13,815)   (13,815)   (13,815)   (13,815)   (13,815)
Less: Intangible assets   (476)   (538)   (603)   (674)   (748)
Tangible Total Assets  $1,462,558   $1,422,313   $1,388,711   $1,279,171   $1,278,197 
Common Shares outstanding   2,862    2,862    2,845    2,843    2,843 
                          
Book value per Common Share – GAAP  $46.66   $46.02   $44.72   $43.88   $42.99 
Tangible book value per Common Share - Non-GAAP   41.67    41.01    39.65    38.78    37.87 
Tangible common shareholders’ equity to tangible total assets - Non-GAAP   8.15%   8.25%   8.12%   8.62%   8.42%
Consolidated:                         
Non-interest expense  $8,284   $8,086   $7,259   $8,054   $7,259 
Less: Amortization of core deposit intangibles   (61)   (65)   (71)   (74)   (78)
Less: Write-down of fixed assets   (144)   —    —    —    — 
Less: Foreclosed property expense including OREO gains, losses and Write downs   —    —    —    —    2 
Adjusted non-interest expense  $8,079   $8,021   $7,188   $7,980   $7,183 
Net interest and dividend income, tax equivalent  $10,345   $9,739   $10,520   $9,993   $10,101 
Non-interest income   2,840    2,971    2,841    2,476    3,286 
(Gains) losses on securities   (3)   6    16    24    (34)
Gains on sale of fixed assets   (73)   —    —    —    — 
BOLI proceeds   —    —    —    —    (601)
Adjusted revenue  $13,109   $12,716   $13,377   $12,493   $12,752 
Efficiency Ratio – Non-GAAP 1   61.63%   63.07%   53.75%   63.88%   56.33%

 

1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q3 2021: 60.70%; Q2 2021: 61.59%; Q1 2021: 51.97%; Q4 2020: 62.62%; Q3 2020: 54.76%.

 
 

 

Salisbury Bancorp, Inc. and Subsidiary

SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income (unaudited)

  Average Balance  Income / Expense  Average Yield / Rate
At or for the quarters ended (dollars in thousands)    Q3 2021      Q2 2021      Q3 2020      Q3 2021      Q2 2021      Q3 2020      Q3 2021      Q2 2021      Q3 2020  
Loans (a)(d)  $1,056,266   $1,052,381   $1,049,313   $10,382   $10,015   $10,485    3.90%   3.78%   3.97%
Securities (c)(d)   150,841    138,164    89,220    720    720    606    1.91    2.08    2.72 
FHLBB stock   1,743    1,830    3,440    6    11    34    1.38    2.41    3.96 
Short term funds (b)   196,997    180,716    78,306    73    50    52    0.15    0.11    0.27 
Total interest-earning assets   1,405,847    1,373,091    1,220,279    11,181    10,796    11,177    3.15    3.13    3.64 
Other assets   72,547    70,447    64,943                               
Total assets  $1,478,394   $1,443,538   $1,285,222                               
Interest-bearing demand deposits  $227,291   $227,623   $195,253    111    117    110    0.19    0.21    0.22 
Money market accounts   327,861    315,665    258,257    140    138    195    0.17    0.18    0.30 
Savings and other   217,541    212,253    176,963    58    59    69    0.11    0.11    0.15 
Certificates of deposit   125,768    147,103    135,238    223    252    391    0.70    0.69    1.15 
Total interest-bearing deposits   898,461    902,644    765,711    532    566    765    0.23    0.25    0.40 
Repurchase agreements   14,296    12,010    12,218    5    4    6    0.15    0.15    0.20 
Finance lease   2,685    2,751    2,928    33    36    35    4.98    5.26    4.80 
Note payable   183    192    221    3    3    3    6.11    6.09    6.08 
Subordinated debt (f)   24,452    30,789    9,872    233    415    156    3.82    5.39    6.32 
FHLBB advances   9,329    10,576    44,522    30    33    113    1.28    1.21    0.99 
Total interest-bearing liabilities   949,406    958,962    835,472    836    1,057    1,078    0.35    0.44    0.51 
Demand deposits   388,557    348,561    321,392                               
Other liabilities   6,965    6,786    7,592                               
Shareholders’ equity   133,466    129,229    120,766                               
Total liabilities & shareholders’ equity  $1,478,394   $1,443,538   $1,285,222                               
Net interest income                 $10,345   $9,739   $10,099                
Spread on interest-bearing funds                                 2.80    2.69    3.13 
Net interest margin (e)                                 2.92    2.82    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 amortized cost.
(d)Includes tax exempt income benefit of $0.2 million, $0.2 million and $0.2 million, respectively, for Q3 2021, Q2 2021 and Q3 2020 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 2021 and 2020.
(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)

Nine months ended September 30,  Average Balance  Income / Expense  Average Yield / Rate
(dollars in thousands)  2021  2020  2021  2020  2021  2020
Loans (a)(d)  $1,053,451   $1,012,070   $30,989   $31,010    3.90%   4.07%
Securities (c)(d)   130,864    88,603    2,080    1,939    2.12    2.92 
FHLBB stock   1,840    3,354    26    106    1.89    4.24 
Short term funds (b)   160,055    50,312    148    123    0.12    0.33 
Total earning assets   1,346,210    1,154,339    33,243    33,178    3.27    3.82 
Other assets   71,421    63,265                     
Total assets  $1,417,631   $1,217,604                     
Interest-bearing demand deposits  $224,479   $174,299    332    331    0.20    0.25 
Money market accounts   310,908    245,581    408    994    0.18    0.54 
Savings and other   209,180    170,880    173    405    0.11    0.32 
Certificates of deposit   134,143    149,080    739    1,530    0.74    1.37 
Total interest-bearing deposits   878,710    739,840    1,652    3,260    0.25    0.59 
Repurchase agreements   11,608    7,572    13    16    0.15    0.29 
Finance lease   2,753    2,988    102    106    4.95    4.74 
Note payable   192    231    9    11    6.13    6.08 
Subordinated Debt (f)   21,851    9,867    767    468    4.68    6.32 
FHLBB advances   10,567    45,667    96    473    1.20    1.36 
Total interest-bearing liabilities   925,681    806,165    2,639    4,334    0.38    0.72 
Demand deposits   355,352    286,608                     
Other liabilities   6,897    6,847                     
Shareholders’ equity   129,701    117,984                     
Total liabilities & shareholders’ equity  $1,417,631   $1,217,604                     
Net interest income            $30,604   $28,844           
Spread on interest-bearing funds                       2.89    3.11 
Net interest margin (e)                       3.01    3.32 

 

(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 $0.5 million and $0.5 million, respectively for 2021 and 2020 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 2021 and 2020.
(e)Net interest income divided by average interest-earning assets.

(f)Net of issuance costs.