- Record Net Income Increased to $0.96 per Share for Second Quarter, Up 41% Versus a Year Ago
- Non-performing Assets Decreased to 0.49% of Total Assets, Down From 0.64% Last Quarter
- Wealth Assets Under Administration Increased to $713 Million, Up $45 Million from One Year Ago
LAKEVILLE, Conn., July 26, 2019 (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 second quarter ended June 30, 2019.
Net income allocated to common shareholders was $2.7 million, or $0.96 per common share, for the quarter ended June 30, 2019 (second quarter 2019), compared with $2.4 million, or $0.87 per common share, for the first quarter ended March 31, 2019 (first quarter 2019), and $1.9 million, or $0.68 per common share, for the second quarter ended June 30, 2018 (second quarter 2018).
Salisbury's President and Chief Executive Officer, Richard J. Cantele, Jr., stated, "We reported record earnings in a quarter that reflected declining interest rates and persistent competition for loans and deposits. The mixed economic outlook, increased probability for interest rate reductions and renewed geo-political tensions contributed to flat overall loan growth compared with last quarter. Despite these challenges, our asset quality remains strong and our non-performing assets continue to decline. In this uncertain environment we remain intently focused on upholding our vigorous underwriting standards and enhancing profitability while we continue to provide outstanding service to our customers and earn the continued support of our investors."
Net-Interest Income
Tax equivalent net interest income of $8.5 million for the second quarter 2019 decreased $76 thousand, or 0.9%, versus first quarter 2019, and increased $331 thousand, or 4.1%, versus second quarter 2018. Net interest income for the second quarter 2019 included a charge of $140 thousand for the write-off of unamortized premiums on purchased loans which paid off during the quarter. Average earning assets increased $11.6 million versus second quarter 2018, and increased $74.9 million versus second quarter 2018. Average total interest bearing deposits increased $27.6 million versus first quarter 2019 and increased $95.4 million versus second quarter 2018. The tax equivalent net interest margin for the second quarter 2019 was 3.19% compared with 3.28% for the first quarter 2019 and 3.31% for the second quarter 2018. The write-off of the unamortized premiums reduced second quarter tax equivalent net interest margin by approximately 0.05%.
Non-Interest Income
Non-interest income of $2.5 million for second quarter 2019 increased $521 thousand versus first quarter 2019 and increased $490 thousand versus second quarter 2018. Non-interest income for the second quarter 2019 included realized gains of $281 thousand on the sale of available-for-sale securities compared with realized losses of $9 thousand in the first quarter 2019 and realized gains of $17 thousand in the second quarter 2018.
Trust and Wealth Advisory fees increased $138 thousand versus first quarter 2019 and increased $95 thousand versus second quarter 2018. The quarter-over-quarter increase primarily reflected higher asset-based fees and seasonal tax preparation fees. The year-over-year increase primarily reflected higher asset-based fees. Assets under administration were $713 million as of June 30, 2019 compared with $692 million at March 31, 2019 and $668 million as of June 30, 2018. The increase from the first quarter 2019 was primarily attributed to growth in discretionary assets.
Service charges and fees increased $92 thousand versus first quarter 2019 and increased $120 thousand versus second quarter 2018. The increase from the first quarter 2019 and the second quarter 2018 reflected higher interchange and loan pre-payment fees. The increase from second quarter 2018 also reflected higher deposit fees.
Income from sales and servicing of mortgage loans was essentially unchanged versus first quarter 2019 and second quarter 2018. Mortgage loans of $0.3 million were sold during the second quarter 2019 compared with sales of $0.2 million for first quarter 2019. No mortgage loans were sold during the second quarter 2018.
Non-Interest Expense
Non-interest expense of $7.4 million for second quarter 2019 increased $228 thousand versus first quarter 2019 and increased $22 thousand versus second quarter 2018. Non-interest expense for the second quarter 2019 included a loss of $270 thousand on the sale of an OREO property compared with losses of $52 thousand and $1 thousand in the first quarter 2019 and second quarter 2018, respectively.
Total compensation expense decreased $176 thousand versus first quarter 2019 and increased $93 thousand from second quarter 2018. The decrease from first quarter 2019 primarily reflected lower payroll taxes and benefits expense and higher deferred expenses related to loan originations. The increase from second quarter 2019 primarily reflected higher benefits expense and lower deferred expenses related to loan originations.
Premises and equipment expense increased $31 thousand versus first quarter 2019 and decreased $97 thousand versus second quarter 2018. The increase from the first quarter 2019 primarily reflected higher building and machine maintenance and repairs expense, partly offset by a seasonal decrease in utilities costs. The decline versus second quarter 2018 was primarily attributed to costs incurred in the prior year second quarter associated with the relocation and consolidation of the Newburgh and Fishkill, N.Y. branches into new locations.
Data processing expenses, which also include data communications, increased $68 thousand versus first quarter 2019 and increased $21 thousand versus second quarter 2018. The increase from the first quarter 2019 primarily reflected higher core system data processing charges and ATM network processing fees. The increase from second quarter 2018 primarily reflected higher core system data processing charges and ATM network processing fees, which were partly offset by lower data communications expenses.
Professional fees increased $48 thousand versus first quarter 2019, and decreased $28 thousand versus second quarter 2018. The increase from the first quarter 2019 primarily reflected higher legal, consultation and investment management expenses partly offset by lower audit fees. The decline from the second quarter 2018 reflected lower consultation fees partly offset by higher audit and legal costs. The second quarter 2018 included one-time legal and consultation costs of approximately $75 thousand related to the acquisition of the Fishkill, N.Y. branch from Orange Bank & Trust Company.
Loan related expenses decreased $51 thousand compared to first quarter 2019 and decreased $156 thousand versus second quarter 2018. The decrease over both comparable periods was primarily driven by lower OREO carrying costs and litigation expense. The decline versus second quarter 2018 also reflected lower delinquent taxes paid on properties in the foreclosure process and other taxes.
The effective income tax rates for second quarter 2019, first quarter 2019 and second quarter 2018 were 18.1%, 17.8% and 14.4%, respectively.
Loans
Gross loans receivable decreased $0.4 million during second quarter 2019 to $919.5 million at June 30, 2019, compared with $919.9 million at March 31, 2019, and increased $39.3 million from $880.2 million at June 30, 2018. Balances by loan type for the comparative periods were as follows:
| Loan Type | Q2 2019 | Q1 2019 | 2Q 2018 | |||||||||
| Residential Real Estate | $ | 419,811 | $ | 418,077 | $ | 407,123 | ||||||
| Commercial Real Estate | 298,121 | 300,626 | 283,939 | |||||||||
| Commercial & Industrial | 163,487 | 167,503 | 150,911 | |||||||||
| Farm Land | 3,714 | 4,155 | 4,432 | |||||||||
| Vacant Land | 8,050 | 8,164 | 8,847 | |||||||||
| Municipal | 19,782 | 15,702 | 18,608 | |||||||||
| Consumer | 5,166 | 4,377 | 4,867 | |||||||||
| Deferred Fees | 1,329 | 1,333 | 1,451 | |||||||||
| Gross Loans Receivable | $ | 919,460 | $ | 919,937 | $ | 880,178 | ||||||
The ratio of gross loans to deposits for second quarter 2019 was 96.7% compared with 97.7% for first quarter 2019 and 98.1% for second quarter 2018.
Asset Quality
Asset quality continued to improve during the second quarter 2019. Non-performing assets decreased $1.7 million during second quarter 2019 to $5.5 million, or 0.49% of total assets at June 30, 2019, from $7.1 million, or 0.64% of total assets at March 31, 2019, and decreased $0.9 million from $6.4 million, or 0.58% of total assets, at June 30, 2018.
The amount of total impaired and potential problem loans decreased $0.7 million during the second quarter ended June 30, 2019 to $22.2 million (2.42% of gross loans receivable), compared to $22.9 million, or 2.49% of gross loans receivable at March 31, 2019, and decreased $1.1 million from $23.3 million, or 2.7% of gross loans receivable at June 30, 2018.
Accruing loans receivable 30-to-89 days past due increased $0.2 million during second quarter 2019 to $2.5 million, or 0.27% of gross loans receivable, from $2.2 million, or 0.24% of gross loans receivable at March 31, 2019, and increased $1.0 million from $1.5 million, or 0.17% of gross loans receivable at June 30, 2018.
The allowance for loan losses at June 30, 2019 was $8.9 million compared with $8.8 million at March 31, 2019 and $7.4 million at June 30, 2018.
The provision for loan losses expense was $151 thousand for second quarter 2019 versus $294 thousand for first quarter 2019, and $467 thousand for second quarter 2018. The decrease in the provision from both comparable periods primarily reflected lower loan growth and lower net charge-offs. Net loan charge-offs were $15 thousand for the second quarter 2019, $38 thousand for first quarter 2019 and $144 thousand for the second quarter 2018. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, was 0.97% for the second quarter 2019, versus 0.95% for first quarter 2019 and 0.84% for second quarter 2018.
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 $950.7 million at June 30, 2019 compared with $942.0 million at March 31, 2019 and $897.5 million at June 30, 2018. Deposits at June 30, 2019 included brokered deposits, including CDARS one-way buys, of $52.7 million compared with $49.7 million at March 31, 2019 and $12.2 million at June 30, 2018. Average total deposits for the second quarter 2019 were $947.1 million compared with $918.8 million at March 31, 2018 and $847.8 million at June 30, 2018. Average total deposits for the second quarter 2019 included average brokered deposits of $56.4 million compared with $42.2 million for first quarter 2019 and $9.3 million for second quarter 2018.
FHLB advances decreased $14.9 million during the quarter to $32.8 million at June 30, 2019 and decreased $46.8 million from June 30, 2018.
Capital
Book value per common share increased $0.78 during the second quarter to $38.59 per share and increased $3.21 from the second quarter 2018. Tangible book value per common share increased $0.85 during second quarter 2019 to $33.28 and increased $3.40 from the second quarter 2018.
Shareholders' equity increased $2.8 million in second quarter 2019 to $108.9 million at June 30, 2019 as net income of $2.7 million, unrealized gains in the AFS portfolio of $0.8 million and the issuance of restricted stock awards of $0.1 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, 2019, the Bank's Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 9.10%, 12.57%, and 11.54%, respectively, compared with regulatory "well capitalized" minimums of 5.00%, 10.00%, and 6.5%, respectively.
Second Quarter 2019 Dividends on Common Shares
The Board of Directors of Salisbury declared a $0.28 per common share quarterly cash dividend at its July 26, 2019 meeting. The dividend will be paid on August 30, 2019 to shareholders of record as of August 16, 2019.
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 future results of 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, 2019, are available in the Shareholder Relations section of Salisbury's website at salisburybank.com under News & Market Information/Presentations.
Salisbury Bancorp, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS
| (dollars in thousands, except share data) | June 30, 2019 | December 31, 2018 | ||||
| ASSETS | (unaudited) | |||||
| Cash and due from banks | $ | 8,010 | $ | 7,238 | ||
| Interest bearing demand deposits with other banks | 40,503 | 51,207 | ||||
| Total cash and cash equivalents | 48,513 | 58,445 | ||||
| Securities | ||||||
| Available-for-sale at fair value | 100,149 | 91,818 | ||||
| CRA mutual fund | 869 | 836 | ||||
| Federal Home Loan Bank of Boston stock at cost | 2,839 | 4,496 | ||||
| Loans held-for-sale | 403 | - | ||||
| Loans receivable, net (allowance for loan losses: $8,887 and $7,831) | 910,573 | 909,279 | ||||
| Other real estate owned | 401 | 1,810 | ||||
| Bank premises and equipment, net | 17,609 | 18,175 | ||||
| Goodwill | 13,815 | 13,815 | ||||
| Intangible assets (net of accumulated amortization: $4,700 and $4,497) | 1,180 | 1,383 | ||||
| Accrued interest receivable | 3,439 | 3,148 | ||||
| Cash surrender value of life insurance policies | 15,355 | 14,438 | ||||
| Deferred taxes | 707 | 1,276 | ||||
| Other assets | 3,360 | 2,635 | ||||
| Total Assets | $ | 1,119,212 | $ | 1,121,554 | ||
| LIABILITIES and SHAREHOLDERS' EQUITY | ||||||
| Deposits | ||||||
| Demand (non-interest bearing) | $ | 231,019 | $ | 228,448 | ||
| Demand (interest bearing) | 156,687 | 153,586 | ||||
| Money market | 231,987 | 204,219 | ||||
| Savings and other | 158,809 | 178,807 | ||||
| Certificates of deposit | 172,221 | 161,679 | ||||
| Total deposits | 950,723 | 926,739 | ||||
| Repurchase agreements | 6,308 | 4,104 | ||||
| Federal Home Loan Bank of Boston advances | 32,769 | 67,154 | ||||
| Subordinated debt | 9,847 | 9,835 | ||||
| Note payable | 263 | 280 | ||||
| Finance lease obligations | 3,011 | 3,081 | ||||
| Accrued interest and other liabilities | 7,343 | 6,902 | ||||
| Total Liabilities | 1,010,264 | 1,018,095 | ||||
| Shareholders' Equity | ||||||
| Common stock - $0.10 per share par value | ||||||
| Authorized: 5,000,000; | ||||||
| Issued: 2,899,658 and 2,884,988 | ||||||
| Outstanding: 2,823,476 and 2,806,781 | 282 | 281 | ||||
| Unearned compensation - restricted stock awards | (1,075 | ) | (711 | ) | ||
| Paid-in capital | 44,382 | 43,770 | ||||
| Retained earnings | 63,905 | 60,339 | ||||
| Accumulated other comprehensive income (loss), net | 1,454 | (220 | ) | |||
| Total Shareholders' Equity | 108,948 | 103,459 | ||||
| Total Liabilities and Shareholders' Equity | $ | 1,119,212 | $ | 1,121,554 | ||
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) | 2019 | 2018 | 2019 | 2018 | ||||||
| Interest and dividend income | ||||||||||
| Interest and fees on loans | $ | 9,880 | $ | 9,007 | $ | 19,814 | $ | 17,656 | ||
| Interest on debt securities: | ||||||||||
| Taxable | 583 | 532 | 1,204 | 992 | ||||||
| Tax exempt | 117 | 29 | 189 | 61 | ||||||
| Other interest and dividends | 252 | 181 | 479 | 340 | ||||||
| Total interest and dividend income | 10,832 | 9,749 | 21,686 | 19,049 | ||||||
| Interest expense | ||||||||||
| Deposits | 1,999 | 997 | 3,795 | 1,774 | ||||||
| Repurchase agreements | 4 | 1 | 7 | 3 | ||||||
| Finance lease | 46 | 48 | 92 | 83 | ||||||
| Note payable | 4 | 4 | 8 | 9 | ||||||
| Subordinated debt | 156 | 156 | 312 | 312 | ||||||
| Federal Home Loan Bank of Boston advances | 279 | 500 | 691 | 833 | ||||||
| Total interest expense | 2,488 | 1,706 | 4,905 | 3,014 | ||||||
| Net interest and dividend income | 8,344 | 8,043 | 16,781 | 16,035 | ||||||
| Provision for loan losses | 151 | 467 | 445 | 793 | ||||||
| Net interest and dividend income after provision for loan losses | 8,193 | 7,576 | 16,336 | 15,242 | ||||||
| Non-interest income | ||||||||||
| Trust and wealth advisory | 1,044 | 949 | 1,950 | 1,843 | ||||||
| Service charges and fees | 1,012 | 892 | 1,932 | 1,760 | ||||||
| Gains (losses) on sales of mortgage loans, net | 1 | (1 | ) | 8 | 17 | |||||
| Mortgage servicing, net | 80 | 84 | 156 | 167 | ||||||
| Gains (losses) on CRA mutual fund | 12 | (7 | ) | 23 | (20 | ) | ||||
| Gains on available-for-sale securities, net | 281 | 17 | 272 | 16 | ||||||
| Other | 118 | 124 | 234 | 249 | ||||||
| Total non-interest income | 2,548 | 2,058 | 4,575 | 4,032 | ||||||
| Non-interest expense | ||||||||||
| Salaries | 2,959 | 2,939 | 5,952 | 5,785 | ||||||
| Employee benefits | 1,042 | 969 | 2,227 | 2,128 | ||||||
| Premises and equipment | 1,004 | 1,101 | 1,976 | 2,125 | ||||||
| Data processing | 577 | 556 | 1,086 | 1,042 | ||||||
| Professional fees | 583 | 611 | 1,118 | 1,230 | ||||||
| OREO losses and write-downs | 270 | 1 | 322 | 53 | ||||||
| Collections and other real estate owned | 79 | 235 | 209 | 316 | ||||||
| FDIC insurance | 140 | 123 | 303 | 253 | ||||||
| Marketing and community support | 151 | 222 | 307 | 463 | ||||||
| Amortization of core deposit intangibles | 99 | 116 | 203 | 236 | ||||||
| Other | 535 | 544 | 947 | 965 | ||||||
| Total non-interest expense | 7,439 | 7,417 | 14,650 | 14,596 | ||||||
| Income before income taxes | 3,302 | 2,217 | 6,261 | 4,678 | ||||||
| Income tax provision | 599 | 318 | 1,124 | 763 | ||||||
| Net income | $ | 2,703 | $ | 1,899 | $ | 5,137 | $ | 3,915 | ||
| Net income allocated to common stock | $ | 2,671 | $ | 1,877 | $ | 5,079 | $ | 3,873 | ||
| Basic earnings per common share | $ | 0.96 | $ | 0.68 | $ | 1.83 | $ | 1.40 | ||
| Weighted average common shares outstanding, to calculate basic earnings per share | 2,780 | 2,762 | 2,779 | 2,760 | ||||||
| Diluted earnings per common share | $ | 0.95 | $ | 0.68 | $ | 1.82 | $ | 1.39 | ||
| Weighted average common shares outstanding, to calculate diluted earnings per share | 2,800 | 2,779 | 2,795 | 2,780 | ||||||
| Common dividends per share | $ | 0.28 | $ | 0.28 | $ | 0.56 | $ | 0.56 | ||
Salisbury Bancorp, Inc. and Subsidiary
SELECTED CONSOLIDATED FINANCIAL DATA (unaudited)
| At or for the three month periods ended | |||||||||||||||
| (in thousands, except per share amounts and ratios) | Q2 2019 | Q1 2019 | Q4 2018 | Q3 2018 | Q2 2018 | ||||||||||
| Total assets | $1,119,212 | $1,118,925 | $1,121,554 | $1,098,715 | $1,096,780 | ||||||||||
| Loans receivable, net | 910,573 | 911,188 | 909,279 | 898,625 | 872,796 | ||||||||||
| Total securities | 103,857 | 102,479 | 97,150 | 101,591 | 90,870 | ||||||||||
| Deposits | 950,723 | 941,969 | 926,739 | 902,161 | 897,481 | ||||||||||
| FHLBB advances | 32,769 | 47,712 | 67,154 | 67,596 | 79,538 | ||||||||||
| Shareholders' equity | 108,948 | 106,109 | 103,459 | 100,767 | 99,180 | ||||||||||
| Wealth assets under administration | 713,319 | 691,731 | 648,027 | 690,448 | 667,933 | ||||||||||
| Discretionary wealth assets under administration | 464,537 | 444,110 | 398,287 | 435,357 | 397,637 | ||||||||||
| Non-Discretionary wealth assets under administration | 248,782 | 247,621 | 249,740 | 255,091 | 270,296 | ||||||||||
| Non-performing loans | 5,062 | 6,389 | 6,514 | 8,173 | 5,881 | ||||||||||
| Non-performing assets | 5,463 | 7,130 | 8,324 | 8,513 | 6,359 | ||||||||||
| Accruing loans past due 30-89 days | 2,473 | 2,228 | 2,165 | 1,784 | 1,507 | ||||||||||
| Net interest and dividend income | 8,344 | 8,437 | 8,615 | 8,500 | 8,043 | ||||||||||
| Net interest and dividend income, tax equivalent (1) | 8,486 | 8,562 | 8,736 | 8,615 | 8,155 | ||||||||||
| Provision for loan losses | 151 | 294 | 558 | 378 | 467 | ||||||||||
| Non-interest income | 2,548 | 2,027 | 2,824 | 2,088 | 2,058 | ||||||||||
| Non-interest expense | 7,439 | 7,211 | 7,909 | 7,329 | 7,417 | ||||||||||
| Income before income taxes | 3,302 | 2,959 | 2,972 | 2,881 | 2,217 | ||||||||||
| Income tax provision | 599 | 525 | 408 | 537 | 318 | ||||||||||
| Net income | 2,703 | 2,434 | 2,564 | 2,344 | 1,899 | ||||||||||
| Net income applicable to common shareholders | 2,671 | 2,408 | 2,528 | 2,311 | 1,877 | ||||||||||
| Per share data | |||||||||||||||
| Basic earnings per common share | $0.96 | $0.87 | $0.91 | $0.84 | $0.68 | ||||||||||
| Diluted earnings per common share | 0.95 | 0.86 | 0.91 | 0.83 | 0.68 | ||||||||||
| Dividends per common share | 0.28 | 0.28 | 0.28 | 0.28 | 0.28 | ||||||||||
| Book value per common share | 38.59 | 37.81 | 36.86 | 35.93 | 35.38 | ||||||||||
| Tangible book value per common share - Non-GAAP⁽2⁾ | 33.28 | 32.43 | 31.45 | 30.47 | 29.88 | ||||||||||
| Common shares outstanding at end of period (in thousands) | 2,823 | 2,807 | 2,807 | 2,805 | 2,803 | ||||||||||
| Weighted average common shares outstanding, to calculate basic earnings per share (in thousands) | 2,780 | 2,777 | 2,766 | 2,764 | 2,761 | ||||||||||
| Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands) | 2,793 | 2,789 | 2,779 | 2,779 | 2,779 | ||||||||||
| Profitability ratios | |||||||||||||||
| Net interest margin (tax equivalent) (1) | 3.19% | 3.28% | 3.34% | 3.29% | 3.31% | ||||||||||
| Efficiency ratio⁽3⁾ | 65.81 | 66.15 | 69.13 | 66.91 | 70.87 | ||||||||||
| Effective income tax rate | 18.14 | 17.75 | 13.74 | 18.65 | 14.35 | ||||||||||
| Return on average assets | 0.97 | 0.89 | 0.92 | 0.85 | 0.69 | ||||||||||
| Return on average common shareholders' equity | 10.07 | 9.45 | 9.99 | 9.26 | 7.68 | ||||||||||
| Credit quality ratios | |||||||||||||||
| Non-performing loans to loans receivable, gross | 0.55 | 0.69 | 0.71 | 0.90 | 0.67 | ||||||||||
| Accruing loans past due 30-89 days to loans receivable, gross | 0.27 | 0.24 | 0.24 | 0.20 | 0.17 | ||||||||||
| Allowance for loan losses to loans receivable, gross | 0.97 | 0.95 | 0.85 | 0.85 | 0.84 | ||||||||||
| Allowance for loan losses to non-performing loans | 175.56 | 136.96 | 120.21 | 94.77 | 125.51 | ||||||||||
| Non-performing assets to total assets | 0.49 | 0.64 | 0.74 | 0.77 | 0.58 | ||||||||||
| Capital ratios | |||||||||||||||
| Common shareholders' equity to assets | 9.73% | 9.48% | 9.22% | 9.17% | 9.04% | ||||||||||
| Tangible common shareholders' equity to tangible assets - Non-GAAP⁽2⁾ | 8.51 | 8.25 | 7.98 | 7.89 | 7.75 | ||||||||||
| Tier 1 leverage capital (4) | 9.10 | 8.98 | 8.83 | 8.66 | 8.98 | ||||||||||
| Total risk-based capital (4) | 12.57 | 12.38 | 12.09 | 11.91 | 11.92 | ||||||||||
| Common equity tier 1 capital (4) | 11.54 | 11.35 | 11.17 | 10.99 | 11.02 | ||||||||||
1 Adjusted to reflect the U.S. federal statutory tax 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 2019 | Q1 2019 | Q4 2018 | Q3 2018 | Q2 2018 | ||||||||||
| Common Shareholders' Equity | $ | 108,948 | $ | 106,108 | $ | 103,459 | $ | 100,767 | $ | 99,180 | |||||
| Less: Goodwill | (13,815 | ) | (13,815 | ) | (13,815 | ) | (13,815 | ) | (13,815 | ) | |||||
| Less: Intangible assets | (1,180 | ) | (1,279 | ) | (1,383 | ) | (1,490 | ) | (1,601 | ) | |||||
| Tangible Common Shareholders' Equity | $ | 93,953 | $ | 91,014 | $ | 88,261 | $ | 85,462 | $ | 83,764 | |||||
| Total Assets | $ | 1,119,212 | $ | 1,118,925 | $ | 1,121,554 | $ | 1,098,715 | $ | 1,096,780 | |||||
| Less: Goodwill | (13,815 | ) | (13,815 | ) | (13,815 | ) | (13,815 | ) | (13,815 | ) | |||||
| Less: Intangible assets | (1,180 | ) | (1,279 | ) | (1,383 | ) | (1,490 | ) | (1,601 | ) | |||||
| Tangible Total Assets | $ | 1,104,217 | $ | 1,103,831 | $ | 1,106,356 | $ | 1,083,410 | $ | 1,081,364 | |||||
| Common Shares outstanding | 2,823 | 2,807 | 2,807 | 2,805 | 2,803 | ||||||||||
| Book value per Common Share – GAAP | $ | 38.59 | $ | 37.81 | $ | 36.86 | $ | 35.93 | $ | 35.38 | |||||
| Tangible book value per Common Share - Non-GAAP | 33.28 | 32.43 | 31.45 | 30.47 | 29.88 | ||||||||||
| Consolidated: | |||||||||||||||
| Non-interest expense | $ | 7,438 | $ | 7,211 | $ | 7,909 | $ | 7,329 | $ | 7,417 | |||||
| Less: Amortization of core deposit intangibles | (99 | ) | (104 | ) | (107 | ) | (111 | ) | (116 | ) | |||||
| Less: Foreclosed property expense including OREO gains, losses and Write downs | (271 | ) | (103 | ) | (260 | ) | (52 | ) | (71 | ) | |||||
| Adjusted non-interest expense | $ | 7,068 | $ | 7,004 | $ | 7,542 | $ | 7,166 | $ | 7,230 | |||||
| Net interest and dividend income, tax equivalent | $ | 8,486 | $ | 8,562 | $ | 8,736 | $ | 8,615 | $ | 8,155 | |||||
| Non-interest income | 2,548 | 2,027 | 2,824 | 2,088 | 2,058 | ||||||||||
| (Gains) losses on securities | (294 | ) | (2 | ) | (300 | ) | 6 | (11 | ) | ||||||
| BOLI proceeds receivable | - | - | (341 | ) | - | - | |||||||||
| Adjusted revenue | $ | 10,740 | $ | 10,588 | $ | 10,909 | $ | 10,709 | $ | 10,202 | |||||
| Efficiency Ratio – Non-GAAP 1 | 65.81 | % | 66.15 | % | 69.13 | % | 66.91 | % | 70.87 | % | |||||
1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q2 2019: 64.09%; Q1 2019: 64.51%; Q4 2018: 67.17%; Q3 2018: 65.65%; Q2 2018: 69.47%.
Source: Salisbury Bancorp, Inc.
Salisbury Contact: Richard J. Cantele, Jr., President and Chief Executive Officer
860-435-9801 or rcantele@salisburybank.com
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