UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________

 

FORM 8-K

______________________

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

 

July 31, 2020

______________________

Salisbury Bancorp, Inc.

(Exact name of registrant as specified in its charter)

______________________

 

Connecticut

(State of other jurisdiction

of incorporation)

 

000-24751

(Commission

File Number)

 

06-1514263

(IRS Employer

Identification No.)

 

 

5 Bissell Street, Lakeville, Connecticut

(Address of principal executive offices)

 

 

 

06039

(Zip Code)

 

   
Registrant’s telephone number, including area code: (860) 435-9801  
   
(Former name or former address, if changed since last report)  
         

 

 

Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered
Common Stock, $0.10 par value per share SAL NASDAQ

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company □

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

 

   

 

 

 

 

Section 2. Financial Information

Item 2.02. Results of Operations and Financial Condition

On July 31, 2020 Salisbury Bancorp, Inc. (“Salisbury”) the holding company for Salisbury Bank and Trust Company (the “Bank”), issued a press release announcing results for its second quarter ended June 30, 2020. The press release is attached as Exhibit 99.1 and is incorporated herein by reference.

 

Section 9. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) Exhibits.

Exhibit No.    Description
99.1   Press release dated July 31, 2020

 

 

 

 
 

 

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

Salisbury Bancorp, Inc.

Date: July 31, 2020

 

By:

/s/ Peter Albero

Peter Albero

Executive Vice President and Chief Financial Officer

     

  

 

 

Exhibit 99.1

Friday, July 31, 2020

Company Press Release

 

Source: Salisbury Bancorp, Inc.

 

Salisbury Contact: Richard J. Cantele, Jr., President and Chief Executive Officer

860-435-9801 or rcantele@salisburybank.com

 

FOR IMMEDIATE RELEASE

 

SALISBURY BANCORP, INC. REPORTS RESULTS FOR SECOND QUARTER 2020; DECLARES 29 CENT DIVIDEND

 

·Second Quarter 2020 Net Income of $0.96 per Basic Common Share
·Results Reflected a Loan Loss Provision of $1.8 Million Primarily Due to Risks Associated with COVID-19 Pandemic
·Common Equity Tier 1 and Total Capital Ratios of 11.9% and 13.2%, Respectively
·Non-Performing Assets were 0.37% of Total Assets
·Salisbury Bank was Added to Russell 3000® Index as of June 29, 2020

 

Lakeville, Connecticut, July 31, 2020 /GlobeNewswire…..Salisbury Bancorp, Inc. (“Salisbury”), (NASDAQ Capital Market: “SAL”), the holding company for Salisbury Bank and Trust Company (the “Bank”), announced results for its second quarter ended June 30, 2020.

Net income allocated to common shareholders was $2.7 million, or $0.96 per common share, for the quarter ended June 30, 2020 (second quarter 2020), compared with $2.0 million, or $0.72 per common share, for the first quarter ended March 31, 2020 (first quarter 2020), and $2.7 million, or $0.96 per common share, for the second quarter ended June 30, 2019 (second quarter 2019). Results for second quarter 2020 included a loan loss provision of $1.8 million, which was partly offset by fee income of $369 thousand and interest income of $192 thousand on loans recorded under the Small Business Administration’s Paycheck Protection Program (PPP). Additionally, during second quarter 2020, the Bank recorded a credit to compensation expense of $544 thousand to defer the cost of originating such PPP loans over their loan term.

Salisbury’s President and Chief Executive Officer, Richard J. Cantele, Jr., stated, “The pandemic continues to weigh heavily on businesses and consumers as we all adapt to the new “normal”. Despite a higher provision for loan losses, we reported solid results for the second quarter and we continued to bolster our capital base. We remain steadfast in our commitment to help our customers navigate through this period of uncertainty. In addition, we have accelerated our charitable giving to many non-profits in the communities served by the Bank. During the second quarter, the employees of Salisbury Bank processed almost 900 PPP applications for nearly $100 million in loans resulting in approximately 10,500 jobs preserved. In addition, Salisbury assisted hundreds of customers adversely effected by the COVID-19 pandemic with waivers of fees and short-term loan payment deferments. All Salisbury Bank branches reopened to customers on July 8th, and we remain committed to providing outstanding customer service and supporting our local communities during this crisis.”

Net Interest and Dividend Income

Tax equivalent net interest income of $9.8 million for the second quarter 2020 increased $832 thousand, or 9.3%, versus first quarter 2020, and increased $1.3 million, or 15.3%, versus second quarter 2019. Interest income increased $0.2 million, or 2.0%, compared to first quarter 2020 and increased $0.1 million, or 1.3%, compared with second quarter 2019. Second quarter 2020 included PPP fees and interest of $369 thousand and $192 thousand, respectively. The cost of interest bearing liabilities declined $0.6 million, or 31.3%, from first quarter 2020 and declined $1.2 million, or 46.7%, from second quarter 2019. Average earning assets increased $114.3 million, or 10.7%, versus first quarter 2020, and increased $116.5 million, or 11.0%, versus second quarter 2019. Average earning assets for second quarter 2020 included average PPP loan balances of $76.6 million. Average total interest bearing liabilities increased $42.2 million, or 5.5%, versus first quarter 2020 and increased $29.2 million, or 3.7%, versus second quarter 2019. The increase from prior periods primarily reflected the funding of PPP loans. The tax equivalent net interest margin for the second quarter 2020 was 3.31% compared with 3.35% for the first quarter 2020 and 3.19% for the second 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 $2.3 million for second quarter 2020 increased $71 thousand versus first quarter 2020 and decreased $232 thousand versus second quarter 2019. To help support the financial needs of our customers and the communities in our markets, the Bank waived approximately $240 thousand and $270 thousand of deposit and transaction fees in second quarter and the six month period ended June 30, 2020, respectively. Non-interest income for the second quarter 2020 included realized gains of $181 thousand on the sale of available-for-sale securities compared with negligible realized gains in the first quarter 2020 and realized gains of $281 thousand in the second quarter 2019.

Trust and Wealth Advisory fees of $1.0 million were essentially unchanged versus first quarter 2020 and decreased slightly versus second quarter 2019. Assets under administration were $704.1 million as of June 30, 2020 compared with $639.5 million at March 31, 2020 and $713.3 million as of June 30, 2019. Discretionary assets under administration of $480.5 million in second quarter 2020 increased from $425.4 million in first quarter 2020 and $464.5 million in second quarter 2019. The growth from first quarter 2020 primarily reflected higher market valuations whereas the growth versus second quarter 2019 primarily reflected new business activity. Non-discretionary assets under administration were $223.6 million in second quarter 2020 compared with $214.1 million in first quarter 2020 and $248.8 million in second quarter 2019. The increase from first quarter 2020 primarily reflected higher valuations whereas the decline from second quarter 2019 primarily reflected a lower valuation of shares in a partnership for one significant client relationship for which the trust and wealth business recorded only a nominal annual fee.

Service charges and fees of $598 thousand decreased $307 thousand versus first quarter 2020 and decreased $414 thousand versus second quarter 2019. The decrease from the comparative quarters primarily reflected waived deposit and transaction fees as a result of COVID-19 pandemic.

Income from sales and servicing of mortgage loans of $318 thousand increased $190 thousand versus first quarter 2020 and increased $237 thousand from second quarter 2019. Mortgage loans of $14.7 million were sold during the second quarter 2020 compared with sales of $3.2 million for first quarter 2020 and $0.3 million in second quarter 2019.

Non-Interest Expense

Non-interest expense of $6.8 million for second quarter 2020 decreased $147 thousand versus first quarter 2020 and decreased $650 thousand versus second quarter 2019. Compensation expense of $3.4 million for second quarter 2020 decreased $548 thousand from first quarter 2020 and decreased $553 thousand versus second quarter 2019. The decline from the comparative quarters primarily reflected the deferral of compensation costs associated with originating PPP loans. The deferred compensation costs will be amortized into income over the term of the PPP loans as an offset to loan interest income.

Excluding compensation, other non-interest expenses of $3.3 million for second quarter 2020 increased $400 thousand from first quarter 2020 and declined $96 thousand from second quarter 2019. The increase from first quarter 2020 primarily reflected higher premises and equipment charges and increased consulting costs as well as the acceleration of restricted equity awards for retiring directors and the timing of community support contributions. The decrease from second quarter 2019 primarily reflected OREO losses in second quarter 2019, partly offset by higher consulting costs.

The effective income tax rates for second quarter 2020, first quarter 2020 and second quarter 2019 were 18.1%, 14.4% and 18.1%, respectively. The lower tax rate in first quarter 2020 primarily reflected the effect of tax-exempt income from municipal bonds, tax advantaged loans and bank-owned life insurance on a comparatively lower level of pre-tax income.

Loans

Gross loans for second quarter 2020 included $98.9 million in PPP loans, which are categorized as commercial & industrial loans in the below table, and deferred fees of $2.6 million. Excluding PPP loans, gross loans receivable were $956.4 million at June 30, 2020, compared with $959.8 million at March 31, 2020, and $919.5 million at June 30, 2019. Including PPP loans, the ratio of gross loans to deposits for second quarter 2020 was 97.0% compared with 99.4% for first quarter 2020 and 96.7% for second quarter 2019. Balances by loan type for the comparative periods were as follows:

Loan Type    Q2 2020      Q1 2020      Q2 2019  
Residential Real Estate  $437,198   $432,241   $419,811 
Commercial Real Estate   323,634    321,358    298,121 
Commercial & Industrial   247,440    157,573    163,487 
Farm Land   3,324    3,612    3,714 
Vacant Land   13,879    14,488    8,050 
Municipal   20,707    20,964    19,782 
Consumer   7,886    8,195    5,166 
Deferred (Fees) Costs   (1,339)   1,329    1,329 
Gross Loans Receivable  $1,052,729   $959,760   $919,460 


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 June 30, 2020, loan payments were deferred on 124 residential and consumer loans ($35 million loan balance) and 200 commercial loans ($136 million loan balance).

Non-performing assets increased $1.6 million during second quarter 2020 to $4.8 million, or 0.37% of total assets at June 30, 2020, from $3.2 million, or 0.28% of total assets at March 31, 2020, and decreased $0.7 million from $5.5 million, or 0.49% of total assets, at June 30, 2019.

The amount of total impaired and potential problem loans decreased $1.3 million during the second quarter ended June 30, 2020 to $26.9 million (2.55% of gross loans receivable), compared to $28.1 million, or 2.93% of gross loans receivable at March 31, 2020, and increased $4.6 million from $22.2 million, or 2.42% of gross loans receivable at June 30, 2019.

Accruing loans receivable 30-to-89 days past due decreased $3.5 million during second quarter 2020 to $2.7 million, or 0.25% of gross loans receivable, from $6.1 million, or 0.64% of gross loans receivable at March 31, 2020, and increased $0.2 million from $2.5 million, or 0.27% of gross loans receivable at June 30, 2019.

The allowance for loan losses at June 30, 2020 was $12.4 million compared with $10.6 million at March 31, 2020 and $8.9 million at June 30, 2019. The provision for loan losses expense was $1.8 million for second quarter 2020 versus $1.7 million for first quarter 2020, and $151 thousand for second quarter 2019. The provision for second 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 (recoveries) were $55 thousand for the second quarter 2020, ($17) thousand for first quarter 2020 and $15 thousand for the second quarter 2019. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, was 1.18% for the second quarter 2020, versus 1.11% for first quarter 2020 and 0.97% for second quarter 2019.

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 $1.1 billion at June 30, 2020 compared with $965.6 million at March 31, 2020 and $950.7 million at June 30, 2019. Deposits at June 30, 2020 included brokered deposits, including CDARS one-way buys, of $38.2 million compared with $58.2 million at March 31, 2020 and $52.7 million at June 30, 2019. Average total deposits for the second quarter 2020 were $1.0 billion compared with $949.4 million for the first quarter ended March 31, 2020 and $947.1 million for the second quarter ended June 30, 2019. Average total deposits for the second quarter 2020 included average brokered deposits of $44.2 million compared with $33.3 million for first quarter 2020 and $56.4 million for second quarter 2019.

Federal Home Loan Bank of Boston (FHLB) advances of $55.1 million at June 30, 2020 increased $14.2 million from March 31, 2020 and increased $22.3 million from June 30, 2019. Salisbury’s excess borrowing capacity at FHLBB was approximately $223 million at June 30, 2020.

Capital

Book value per common share increased $0.61 during the second quarter to $41.66 per share at June 30, 2020 and increased $3.07 from the second quarter 2019. Tangible book value per common share increased $0.66 during second quarter 2020 to $36.51 at June 30, 2020 and increased $3.23 from the second quarter 2019.

Shareholders’ equity increased $2.3 million in second quarter 2020 to $118.4 million at June 30, 2020 as net income of $2.7 million, unrealized gains in the Available-For-Sale portfolio of $0.2 million and the issuance of restricted stock awards of $0.2 million was 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 June 30, 2020, the Bank’s Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 8.95%, 13.15%, and 11.90%, 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 July 31, 2020 meeting. The dividend will be paid on August 28, 2020 to shareholders of record as of August 14, 2020.

Inclusion in the Russell 3000® Index

As previously announced, Salisbury was added to the Russell 3000® Index at the conclusion of the 2020 Russell Indexes annual reconstitution, effective as of the US market open on Monday, June 29, 2020. The annual Russell Indexes reconstitution captures the 4,000 largest US stocks as of May 8, 2020, ranking them by total market capitalization. Membership in the US all-cap Russell 3000® Index, which remains in place for one year, means automatic inclusion in the small-cap Russell 2000® Index, as well as the appropriate growth and value style indexes. FTSE Russell determines membership for its Russell indexes primarily by objective, market capitalization rankings and style attributes. Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies. Russell Indexes are part of FTSE Russell, a leading global index provider.

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 June 30, 2020, are available in the Shareholder Relations section of Salisbury’s website at salisburybank.com under Shareholder Relations/News & Market -*Information/Presentations simultaneously with this Release.

 
 

Salisbury Bancorp, Inc. and Subsidiary

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share data)    June 30, 2020      December 31, 2019  
ASSETS   (unaudited)      
Cash and due from banks  $7,391   $7,406 
Interest bearing demand deposits with other banks   77,104    19,479 
Total cash and cash equivalents   84,495    26,885 
Interest bearing Time Deposits with Financial Institutions   750    750 
Securities          
Available-for-sale at fair value   89,452    91,801 
CRA mutual fund at fair value   912    882 
Federal Home Loan Bank of Boston stock at cost   3,353    3,242 
Loans held-for-sale   5,313    332 
Loans receivable, net (allowance for loan losses: $12,371 and $8,895)   1,040,358    927,413 
Other real estate owned       314 
Bank premises and equipment, net   17,950    17,385 
Goodwill   13,815    13,815 
Intangible assets (net of accumulated amortization: $5,054 and $4,884)   825    995 
Accrued interest receivable   3,988    3,415 
Cash surrender value of life insurance policies   20,846    20,580 
Deferred taxes   1,935    1,249 
Other assets   3,145    3,390 
Total Assets  $1,287,137   $1,112,448 
LIABILITIES and SHAREHOLDERS' EQUITY          
Deposits          
Demand (non-interest bearing)  $325,531   $237,852 
Demand (interest bearing)   188,487    153,314 
Money market   251,242    239,504 
Savings and other   170,537    161,112 
Certificates of deposit   149,802    127,724 
Total deposits   1,085,599    919,506 
Repurchase agreements   7,809    8,530 
Federal Home Loan Bank of Boston advances   55,118    50,887 
Subordinated debt   9,871    9,859 
Note payable   228    246 
Finance lease obligations   1,696    1,718 
Accrued interest and other liabilities   8,372    8,047 
Total Liabilities   1,168,693    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   (1,031)   (795)
Paid-in capital   45,096    44,490 
Retained earnings   71,461    68,320 
Accumulated other comprehensive  income, net   2,634    1,357 
Total Shareholders' Equity   118,444    113,655 
Total Liabilities and Shareholders' Equity  $1,287,137   $1,112,448 
 
 

Salisbury Bancorp, Inc. and Subsidiary

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

   Three months ended  Six months ended
Periods ended June 30, (in thousands, except per share amounts)    2020      2019      2020      2019  
Interest and dividend income                    
Interest and fees on loans  $10,313   $9,880   $20,300   $19,814 
Interest on debt securities:                    
Taxable   409    583    864    1,204 
Tax exempt   171    117    356    189 
Other interest and dividends   51    252    142    479 
Total interest and dividend income   10,944    10,832    21,662    21,686 
Interest expense                    
Deposits   988    1,999    2,497    3,795 
Repurchase agreements   4    4    10    7 
Finance lease   35    46    71    92 
Note payable   4    4    7    8 
Subordinated debt   156    156    312    312 
Federal Home Loan Bank of Boston advances   140    279    359    691 
Total interest expense   1,327    2,488    3,256    4,905 
Net interest and dividend income   9,617    8,344    18,406    16,781 
Provision for loan losses   1,806    151    3,512    445 
Net interest and dividend income after provision for loan losses   7,811    8,193    14,894    16,336 
Non-interest income                    
Trust and wealth advisory   1,031    1,044    2,061    1,950 
Service charges and fees   598    1,012    1,503    1,932 
Gains on sales of mortgage loans, net   252    1    313    8 
Mortgage servicing, net   66    80    133    156 
Gains on CRA mutual fund   8    12    22    23 
Gains on available-for-sale securities, net   181    281    182    272 
BOLI income and gains   133    87    266    166 
Other   47    31    80    68 
Total non-interest income   2,316    2,548    4,560    4,575 
Non-interest expense                    
Salaries   2,411    2,959    5,261    5,952 
Employee benefits   1,037    1,042    2,183    2,227 
Premises and equipment   981    1,004    1,891    1,976 
Data processing   557    577    1,098    1,086 
Professional fees   758    583    1,385    1,118 
OREO gains, losses and write-downs, net       270        322 
Collections, OREO, and loan related   79    79    104    209 
FDIC insurance   103    140    208    303 
Marketing and community support   169    151    293    307 
Amortization of core deposit intangibles   83    99    170    203 
Other   611    535    1,133    947 
Total non-interest expense   6,789    7,439    13,726    14,650 
Income before income taxes   3,338    3,302    5,728    6,261 
Income tax provision   604    599    947    1,124 
Net income  $2,734   $2,703   $4,781   $5,137 
Net income allocated to common stock  $2,691   $2,671   $4,704   $5,079 
                     
Basic earnings per common share  $0.96   $0.96   $1.68   $1.83 
Diluted earnings per common share  $0.96   $0.95   $1.68   $1.82 
Common dividends per share  $0.29   $0.28   $0.58   $0.56 
 
 

Salisbury Bancorp, Inc. and Subsidiary

SELECTED CONSOLIDATED FINANCIAL DATA (unaudited)

 

At or for the quarters ended               
(in thousands, except per share amounts and ratios)    Q2 2020      Q1 2020      Q4 2019      Q3 2019      Q2 2019  
Total assets  $1,287,137   $1,145,751   $1,112,448   $1,144,240   $1,119,212 
Loans receivable, net   1,040,358    949,142    927,413    915,083    910,573 
Total securities   93,717    94,966    95,925    98,270    103,857 
Deposits   1,085,599    965,620    919,506    966,178    950,723 
FHLBB advances   55,118    40,932    50,887    37,828    32,769 
Shareholders’ equity   118,444    116,143    113,655    111,580    108,948 
Wealth assets under administration   704,052    639,457    777,503    752,467    713,319 
Discretionary wealth assets under administration   480,456    425,359    498,737    475,482    464,537 
Non-discretionary wealth assets under administration   223,596    214,098    278,766    276,985    248,782 
Non-performing loans   4,815    3,188    3,621    5,370    5,062 
Non-performing assets   4,815    3,188    3,935    5,687    5,463 
Accruing loans past due 30-89 days   2,656    6,109    2,077    1,784    2,473 
Net interest and dividend income   9,617    8,787    8,665    8,667    8,344 
Net interest and dividend income, tax equivalent(1)   9,786    8,954    8,839    8,831    8,486 
Provision for loan losses   1,806    1,706    417    94    151 
Non-interest income   2,316    2,245    2,419    2,256    2,548 
Non-interest expense   6,789    6,936    7,080    7,184    7,439 
Income before income taxes   3,338    2,390    3,587    3,645    3,302 
Income tax provision   604    343    578    657    599 
Net income   2,734    2,047    3,009    2,988    2,703 
Net income allocated to common shareholders   2,691    2,013    2,960    2,940    2,671 
                          
Per share data                         
Basic earnings per common share  $0.96   $0.72   $1.06   $1.06   $0.96 
Diluted earnings per common share   0.96    0.72    1.06    1.05    0.95 
Dividends per common share   0.29    0.29    0.28    0.28    0.28 
Book value per common share   41.66    41.05    40.22    39.52    38.59 
Tangible book value per common share - Non-GAAP 2   36.51    35.85    34.98    34.24    33.28 
Common shares outstanding at end of period (in thousands)   2,843    2,829    2,826    2,823    2,823 
Weighted average common shares outstanding, to calculate basic earnings per share (in thousands)   2,796    2,788    2,781    2,783    2,780 
Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands)   2,804    2,797    2,794    2,795    2,793 
                          
Profitability ratios                         
Net interest margin (tax equivalent) (1)   3.31%   3.35%   3.34%   3.29%   3.19%
Efficiency ratio (3)   56.22    61.36    61.81    62.90    65.81 
Effective income tax rate   18.11    14.35    16.11    18.02    18.14 
Return on average assets   0.89    0.73    1.07    1.05    0.97 
Return on average common shareholders’ equity   9.36    7.07    10.56    10.73    10.07 
                          
Credit quality ratios                         
Non-performing loans to loans receivable, gross   0.46    0.33    0.39    0.58    0.55 
Accruing loans past due 30-89 days to loans receivable, gross   0.25    0.64    0.22    0.19    0.27 
Allowance for loan losses to loans receivable, gross   1.18    1.11    0.95    0.96    0.97 
Allowance for loan losses to non-performing loans   256.9    333.0    245.64    164.73    175.56 
Non-performing assets to total assets   0.37    0.28    0.35    0.50    0.49 
                          
Capital ratios                         
Common shareholders' equity to assets   9.20%   10.14%   10.22%   9.75%   9.73%
Tangible common shareholders' equity to tangible assets - Non-GAAP(2)   8.16    8.97    9.01    8.56    8.51 
Tier 1 leverage capital (4)   8.95    9.65    9.60    9.27    9.10 
Total risk-based capital (4)   13.15    12.97    12.84    12.58    12.57 
Common equity tier 1 capital (4)   11.90    11.79    11.83    11.57    11.54 

 

(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)    Q2 2020      Q1 2020      Q4 2019      Q3 2019      Q2 2019  
Common Shareholders' Equity  $118,444   $116,143   $113,655   $111,580   $108,948 
Less: Goodwill   (13,815)   (13,815)   (13,815)   (13,815)   (13,815)
Less: Intangible assets   (825)   (908)   (995)   (1,086)   (1,180)
Tangible Common Shareholders' Equity  $103,804   $101,420   $98,845   $96,679   $93,953 
Total Assets  $1,287,137   $1,145,751   $1,112,448   $1,144,240   $1,119,212 
Less: Goodwill   (13,815)   (13,815)   (13,815)   (13,815)   (13,815)
Less: Intangible assets   (825)   (908)   (995)   (1,086)   (1,180)
Tangible Total Assets  $1,272,497   $1,131,028   $1,097,638   $1,129,339   $1,104,217 
Common Shares outstanding   2,843    2,829    2,826    2,823    2,823 
                          
Book value per Common Share – GAAP  $41.66   $41.05   $40.22   $39.52   $38.59 
Tangible book value per Common Share - Non-GAAP   36.51    35.85    34.98    34.24    33.28 
Tangible common shareholders’ equity to tangible total assets - Non-GAAP   8.16%   8.97%   9.01%   8.56%   8.51%
                          
Consolidated:                         
Non-interest expense  $6,789   $6,936   $7,080   $7,184   $7,438 
Less: Amortization of core deposit intangibles   (83)   (87)   (91)   (93)   (99)
Less: Foreclosed property expense including OREO gains, losses and
Write downs
   (7)   13    (27)   (115)   (271)
Adjusted non-interest expense  $6,699   $6,862   $6,962   $6,976   $7,068 
Net interest and dividend income, tax equivalent  $9,786   $8,955   $8,839   $8,831   $8,486 
Non-interest income   2,316    2,245    2,419    2,256    2,548 
(Gains) losses on securities   (188)   (15)   4    3    (294)
Adjusted revenue  $11,914   $11,185   $11,262   $11,090   $10,740 
Efficiency Ratio – Non-GAAP 1   56.23%   61.36%   61.81%   62.90%   65.81%

1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q2 2020: 54.29%; Q1 2020: 59.83%; Q4 2019: 60.19%; Q3 2019: 61.13%; Q2 2019: 64.09%. If Q2 2020 results were normalized to exclude the impact of the COVID-19 pandemic, non-interest expense would increase by $538 thousand for deferred compensation costs and revenue would be adjusted to include waived deposit fees of $240 thousand and exclude PPP loan and fee income of $192 thousand and $369 thousand, respectively. The normalized efficiency ratio for Q2 2020 would have been 62.47% or 61.08%, 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)    Q2 2020      Q1 2020      Q2 2019      Q2 2020      Q1 2020      Q2 2019      Q2 2020      Q1 2020      Q2 2019  
Loans (a)(d)  $1,038,551   $948,035   $923,513   $10,428   $10,096   $9,984    4.02%   4.26%   4.31%
Securities (c)(d)   86,987    89,596    99,050    634    698    738    2.92    3.12    2.98 
FHLBB stock   3,580    3,041    3,258    39    33    66    4.36    4.34    8.09 
Short term funds (b)   49,105    23,218    35,853    12    58    186    0.10    1.00    2.08 
Total interest-earning assets   1,178,223    1,063,890    1,061,674    11,113    10,885    10,974    3.77    4.09    4.13 
Other assets   60,288    64,438    56,081                               
Total assets  $1,238,511   $1,128,328   $1,117,755                               
Interest-bearing demand deposits  $172,811   $154,604   $156,597    103    119    154    0.24    0.31    0.39 
Money market accounts   237,667    240,680    209,351    239    560    558    0.40    0.93    1.07 
Savings and other   171,436    164,174    184,346    102    234    456    0.24    0.57    0.99 
Certificates of deposit   157,288    154,869    177,535    544    596    831    1.38    1.54    1.88 
Total interest-bearing deposits   739,202    714,327    727,829    988    1,509    1,999    0.53    0.84    1.10 
Repurchase agreements   4,773    5,672    3,334    4    7    4    0.34    0.49    0.47 
Finance lease   2,987    3,050    4,509    35    36    46    4.69    4.72    4.07 
Note payable   231    240    266    4    4    4    6.93    6.67    6.06 
Subordinated debt   9,866    9,860    9,843    156    156    156    6.32    6.33    6.34 
FHLBB/FRB borrowings   55,374    37,118    37,462    140    219    279    1.01    2.36    2.94 
Total interest-bearing liabilities   812,433    770,267    783,243    1,327    1,931    2,488    0.65    1.00    1.27 
Demand deposits   302,965    235,129    221,012                               
Other liabilities   6,029    6,856    5,862                               
Shareholders’ equity   117,084    116,076    107,638                               
Total liabilities & shareholders’ equity  $1,238,511   $1,128,328   $1,117,755                               
Net interest income (d)                 $9,786   $8,954   $8,486                
Spread on interest-bearing funds                                 3.12    3.09    2.86 
Net interest margin (e)                                 3.31    3.35    3.19 
(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 of $0.2 million, $0.2 million and $0.1 million, respectively for 2Q 2020, 1Q 2020 and 2Q 2019 on tax-exempt securities and loans for which income and yields are calculated on a tax-equivalent basis.
(e)Net interest income divided by average interest-earning assets.
 
 

 

Salisbury Bancorp, Inc. and Subsidiary

SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income (unaudited)

 

Six months ended June 30,  Average Balance  Income / Expense  Average Yield / Rate
(dollars in thousands)    2020      2019      2020      2019      2020      2019  
Loans (a)(d)  $993,293   $920,915   $20,524   $20,021    4.13%   4.35%
Securities (c)(d)   88,292    97,856    1,332    1,454    3.02    2.97 
FHLBB stock   3,310    3,723    72    138    4.35    7.41 
Short term funds (b)   36,161    33,408    70    341    0.39    2.04 
Total earning assets   1,121,056    1,055,902    21,998    21,954    3.92    4.16 
Other assets   62,365    56,552                     
Total assets  $1,183,421   $1,112,454                     
Interest-bearing demand deposits  $163,707   $153,910    222    298    0.27    0.39 
Money market accounts   239,173    204,572    799    1,032    0.67    1.01 
Savings and other   167,805    184,266    336    907    0.40    0.98 
Certificates of deposit   156,078    171,334    1,140    1,558    1.46    1.82 
Total interest-bearing deposits   726,763    714,082    2,497    3,795    0.69    1.06 
Repurchase agreements   5,223    3,039    10    7    0.38    0.46 
Finance lease   3,019    4,293    71    92    4.70    4.29 
Note payable   235    271    7    8    5.96    5.90 
Subordinated Debt (net of issuance costs)   9,864    9,841    312    312    6.33    6.34 
FHLBB advances   46,247    48,507    359    691    1.55    2.85 
Total interest-bearing liabilities   791,351    780,033    3,256    4,905    0.82    1.26 
Demand deposits   269,031    219,825                     
Other liabilities   6,460    6,504                     
Shareholders’ equity   116,579    106,092                     
Total liabilities & shareholders’ equity  $1,183,421   $1,112,454                     
Net interest income            $18,742   $17,049           
Spread on interest-bearing funds                       3.10    2.90 
Net interest margin (e)                       3.33    3.22 

 

(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 $0.3 million and $0.3 million, 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.