Salisbury Bancorp, Inc. Reports Results for Fourth Quarter and Full Year 2022

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  • Fourth Quarter and Full Year 2022 Net Income of $0.71 and $2.75 per Basic Common Share, Respectively
  • Robust Loan Growth of $174.1 million, or 16.5% for Full Year 2022, Excluding PPP Loans
  • Non-performing Assets were 0.17% of Total Assets at December 31, 2022
  • Common Equity Tier 1 and Total Capital Ratios of 12.2% and 13.4%, Respectively

LAKEVILLE, Conn., Jan. 25, 2023 (GLOBE NEWSWIRE) -- Salisbury Bancorp, Inc. ("Salisbury"), (NASDAQ Capital Market: "SAL"), the holding company for Salisbury Bank and Trust Company (the "Bank"), announced results for its fourth quarter and full year ended December 31, 2022.

Net income available to common shareholders was $4.1 million, or $0.71 per basic common share, for the fourth quarter ended December 31, 2022 (fourth quarter 2022), compared with $4.3 million, or $0.75 per basic common share, for the third quarter ended September 30, 2022 (third quarter 2022), and $4.1 million, or $0.72 per basic common share, for the fourth quarter ended December 31, 2021 (fourth quarter 2021). Net income for fourth quarter 2022 included costs of approximately $0.5 million, or $0.07 per basic share, related to Salisbury's previously announced merger agreement with NBT Bancorp ("NBT merger").

Salisbury's President and Chief Executive Officer, Richard J. Cantele, Jr., stated, "Thanks to the dedication and hard work of our employees, we reported strong earnings and robust loan growth in 2022 and our credit quality metrics remain favorable despite a challenging macro-economic environment. We enter 2023 from a position of strength and Salisbury employees remain focused on prudently managing the bank's capital and providing outstanding service to our customers."

Net Interest and Dividend Income

Tax equivalent net interest income of $12.2 million for the fourth quarter 2022 increased $167 thousand, or 1.4%, versus third quarter 2022, and increased $1.5 million, or 13.8%, versus fourth quarter 2021. Tax equivalent interest income of $14.4 million for fourth quarter 2022 increased $1.1 million, or 8.6%, versus third quarter 2022 and increased $2.8 million, or 24.4%, from fourth quarter 2021. The cost of interest-bearing liabilities of $2.1 million for fourth quarter 2022 increased $1.0 million, or 83.5%, from third quarter 2022 and increased $1.3 million, or 164.0%, from fourth quarter 2021.

Average earning assets of $1.47 billion for fourth quarter 2022 increased $12.2 million, or 0.8%, from third quarter 2022, and increased $50.4 million, or 3.5%, versus fourth quarter 2021. Average earning assets for fourth quarter 2022 included average PPP loan balances of $0.4 million, net of deferred fees, compared with $1.3 million and $32.0 million in third quarter 2022 and fourth quarter 2021, respectively. Average total interest bearing liabilities of $982 million for fourth quarter 2022 increased $10.5 million, or 1.1%, from third quarter 2022 and increased $29.8 million, or 3.1%, versus fourth quarter 2021.

The tax equivalent net interest margin for fourth quarter 2022 was 3.28% compared with 3.27% for third quarter 2022 and 2.99% for fourth quarter 2021. Excluding PPP loans, the tax equivalent net interest margin for fourth quarter 2022 was 3.28% compared with 3.25% for third quarter 2022 and 2.87% for fourth quarter 2021. See SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income on page 9 of this release for additional details.

Non-Interest Income

Non-interest income of $2.6 million for fourth quarter 2022 decreased $75 thousand versus third quarter 2022 and decreased $229 thousand versus fourth quarter 2021.

Trust and Wealth Advisory fees of $1.1 million for fourth quarter 2022 decreased $103 thousand from third quarter 2022 and decreased $161 thousand from fourth quarter 2021. Assets under administration were $1.3 billion at December 30, 2022 compared with $1.1 billion at December 31, 2021 and $1.2 billion at September 30, 2022. Discretionary assets under administration of $561.0 million at December 31, 2022 compared with $657.8 million at December 31, 2021 and $522.1 million at September 30, 2022. The variance from the comparative quarters primarily reflected changes in market valuations. Non-discretionary assets under administration of $728.9 million at December 31, 2022 increased from $425.4 million at December 31, 2021 and increased from $710.2 million at September 30, 2022. The increase in non-discretionary assets from the comparative quarters primarily reflected a higher valuation of certain partnership assets for an existing client relationship. The trust and wealth business records only a nominal annual fee on this relationship.

Service charges and fees of $1.2 million for fourth quarter 2022 were essentially unchanged from third quarter 2022 and decreased $67 thousand from fourth quarter 2021. Deposit fees for fourth quarter 2022 were essentially unchanged from the comparative quarters. Net fees from mortgage banking activities were below the comparative quarters. Salisbury did not sell any residential loans to FHLBB during fourth quarter and third quarter 2022 compared with sales of $4.2 million in fourth quarter 2021.

Non-Interest Expense

Non-interest expense of $8.9 million for fourth quarter 2022 increased $435 thousand from third quarter 2022 and increased $476 thousand versus fourth quarter 2021. Non-interest expense for fourth quarter 2022 included costs of approximately $500 thousand primarily for legal and investment banking expenses associated with the pending NBT merger. Compensation expense of $5.3 million for fourth quarter 2022 increased $306 thousand from third quarter 2022 and increased $546 thousand versus fourth quarter 2021. The increase in compensation expense from the comparative periods primarily reflected higher base salary expense and higher incentive accruals as well as higher deferred compensation expense.

Excluding compensation expense, other non-interest expenses for fourth quarter 2022 increased $129 thousand from third quarter 2022 and decreased $70 thousand from fourth quarter 2021. The increase from the prior quarter primarily reflected higher professional fees associated with the NBT merger, which were partially offset by lower facilities, marketing and deposit-related costs. The decrease from fourth quarter 2021 primarily reflected lower marketing costs, appraisal fees and deposit-related costs, which were partially offset by higher professional fees associated with the pending NBT merger.

The effective income tax rates for fourth quarter 2022, third quarter 2022 and fourth quarter 2021 were 20.1%, 18.7% and 19.1%, respectively.

Full Year Results

2022 net income available to common shareholders was $15.6 million, or $2.75 per basic common share, compared with $16.2 million, or $2.88 per basic common share for 2021. Results for 2022 included a provision of $2.7 million compared with a net release of credit reserves of $0.7 million for 2021.

Tax equivalent net interest income of $45.8 million for 2022 increased $4.5 million, or 10.8%, from $41.3 million in 2021. Tax equivalent interest income of $50.8 million for 2022 increased $6.0 million, or 13.4%, from $44.8 million in 2021. In 2022 Salisbury recorded PPP interest income and net fee income of $72 thousand and $751 thousand, respectively, compared with $651 thousand and $2.9 million, respectively, in 2021. This decrease in net PPP fee income was offset by higher interest income on residential and commercial loans due to higher interest rates and record loan growth in 2022.

The cost of interest-bearing liabilities of $5.0 million for 2022 increased $1.5 million, or 44.2%, from $3.4 million in 2021. The increase primarily reflected higher interest expense on deposits, partially offset by lower interest expense on subordinated debt.

Average earning assets of $1.43 billion increased $69.4 million, or 5.1%, from $1.37 billion in 2021 and average total interest-bearing liabilities of $964.0 million increased $31.5 million, or 3.4%, from $932.5 million in 2021. The tax equivalent net interest margin for 2022 was 3.16% compared with 3.01% for 2021. Excluding PPP, the tax equivalent net interest margin for 2022 was 3.12% compared with 2.87% for 2021.

Non-interest income of $11.7 million for 2022 increased $0.2 million from $11.5 million in 2021. The increase primarily reflected higher deposit and lending-related fees, higher BOLI income, partially offset by lower gains on the sale and servicing of mortgage loans. Salisbury sold $7.2 million of mortgage loans in 2022 compared with sales of $34.6 million in 2021.

Non-interest expense of $34.6 million for 2022 increased $2.5 million versus $32.1 million in 2021. The increase primarily reflected higher compensation, technology, and professional fees, which were partially offset by lower marketing costs and lower core deposit intangible amortization expense. Non-interest expenses for 2022 also included costs of approximately $0.5 million related to the NBT merger.

The effective tax rate for 2022 was 18.2% compared with 20.6% for 2021. The higher tax rate in 2021 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 $1.2 billion increased $37.7 million, or 3.2%, from third quarter 2022, and increased $148.8 million, or 13.8%, from fourth quarter 2021. Excluding PPP loans, gross loans receivable increased $37.9 million, or 3.2%, from third quarter 2022 and $174.1 million, or 16.5%, from fourth quarter 2021. Residential 5+ multifamily gross loans receivable at December 31, 2022 and September 30, 2022 included a loan for approximately $16.0 million. At December 31, 2021 this loan, which had a gross balance of approximately $12.0 million, was reported in the commercial real estate category while the project was under construction. The ratio of gross loans to deposits for fourth quarter 2022 was 90.4% compared with 89.9% for third quarter 2022 and 80.8% for fourth quarter 2021. Balances by loan type for the comparative periods were as follows:

Loan Type Q4 2022 Q3 2022  Q4 2021
Residential Real Estate (1-4 Family) $476,719 $461,379  $416,139
Residential 5+ Multifamily  80,400  70,459   52,325
Commercial Real Estate  421,147  413,019   369,761
     Commercial & Industrial ex PPP Loans  190,191  186,527   169,543
PPP Loans  299  469   25,589
Commercial & Industrial – Total  190,490  186,996   195,132
Farm Land  4,081  4,225   2,807
Vacant Land  14,440  14,796   14,182
Municipal  19,693  18,607   16,534
Consumer  20,546  20,344   12,547
Deferred Costs/(Fees)  1,001  1,002   285
Gross Loans Receivable $1,228,517 $1,190,827  $1,079,712
Gross Loans Receivable ex PPP $1,228,218 $1,190,358  $1,054,123


Asset Quality

Non-performing assets of $2.7 million, or 0.17% of total assets at December 31, 2022, decreased $1.5 million from $4.2 million, or 0.27% of total assets at December 31, 2021, and increased $0.8 million from $1.9 million, or 0.12% of total assets, at September 30, 2022.

The amount of total impaired and potential problem loans increased $0.2 million during the quarter to $11.4 million or 0.93% of gross loans receivable at December 31, 2022 compared to $32.8 million, or 3.04% of gross loans receivable at December 31, 2021 and $11.2 million, or 0.94% of gross loans receivable at September 30, 2022. The decrease in the balance from fourth quarter 2021 primarily reflected management's upgrade of the internal risk rating on certain hospitality related loans, which were previously downgraded due to concerns over COVID-19. These businesses have demonstrated a return to pre-pandemic levels of activity and liquidity, warranting the improvement in risk rating.

Accruing loans receivable 30-to-89 days past due of $1.3 million, or 0.11% of gross loans receivable, were essentially unchanged from December 31, 2021, and increased $0.9 million from $0.4 million, or 0.03% of gross loans receivable at September 30, 2022.

The allowance for loan losses for fourth quarter 2022 was $14.8 million compared with $14.3 million for third quarter 2022 and $13.0 million for fourth quarter 2021.The provision expense was $0.5 million for fourth quarter 2022 compared with a provision expense of $0.7 million for third quarter 2022 and a net reserve release of $0.2 million for fourth quarter 2021. The provision expense for fourth quarter 2022 reflected the strong loan growth in the quarter. Net loan charge-offs were $13 thousand for the fourth quarter 2022 compared with $64 thousand for third quarter 2022 and $3 thousand for the fourth quarter 2021.

Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, excluding PPP loans, was 1.21% for the fourth quarter 2022 versus 1.20% for the third quarter 2022 and 1.23% for the fourth quarter 2021. Similarly, reserve coverage, as measured by the ratio of the allowance for loan losses to non-performing loans was 558% for the fourth quarter 2022 versus 771% for third quarter 2022 and 309% for fourth quarter 2021.

Salisbury endeavors to work constructively to resolve its non-performing loan issues with customers. Substantially all non-performing loans are collateralized with real estate and the repayment of such loans is largely dependent on the return of such loans to performing status or the liquidation of the underlying real estate collateral.

Deposits and Borrowings

Deposits of $1.4 billion at December 31, 2022 increased $22.2 million, or 1.7%, from December 31, 2021 and increased $33.2 million, or 2.5%, from September 30, 2022. At December 31, 2022, Salisbury had outstanding brokered deposits balances of $45.0 million compared with balances of $7.9 million at December 31, 2021. Salisbury did not have any outstanding brokered deposit balances at September 30, 2022. Brokered deposits are included in the certificates of deposit balances on Salisbury's consolidated balance sheet. Management utilized brokered deposits in fourth quarter 2022 to fund continued loan growth and to offset seasonal deposit outflows. Average total deposits were $1.3 billion for fourth quarter 2022, third quarter 2022 and fourth quarter 2021. Average total deposits for fourth quarter 2022 included average brokered deposits of $25.8 million compared with $17.6 million for third quarter 2022 and $7.9 million for fourth quarter 2021.

Salisbury had $10.0 million of outstanding advances from FHLBB at December 31, 2022 compared with $7.7 million at December 31, 2021 and $20.0 million at September 30, 2021, respectively. Salisbury's excess borrowing capacity at FHLBB was approximately $241 million at December 31, 2022.

Capital

Shareholders' equity increased $5.2 million in fourth quarter to $128.4 million at December 31, 2022 as net income of $4.1 million, unrealized gains, net of taxes, in the available-for-sale securities ("AFS") portfolio of $1.6 million and other activity of $0.4 million, were partially offset by common stock dividends paid of $0.9 million. The unrealized losses, net of taxes, in the AFS portfolio were $20.7 million at December 31, 2022. These losses, which reflected the sharp increase in market interest rates during 2022, reduced both book value and tangible book value at December 31, 2022 compared with year end 2021. Book value per common share of $22.13 at December 31, 2022 increased $0.84 from third quarter 2022 and decreased $1.74 from fourth quarter 2021. Tangible book value per common share of $19.71 at December 31, 2022 increased $0.85 from third quarter 2022 and decreased $1.67 from fourth quarter 2021.

The Bank's regulatory capital ratios remain in compliance with regulatory "well capitalized" requirements. At December 31, 2022, the Bank's Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 9.99%, 13.43%, and 12.24%, respectively, compared with regulatory "well capitalized" minimums of 5.00%, 10.00%, and 6.5%, respectively. The unrealized losses in the AFS portfolio noted above do not affect the Bank's regulatory capital ratios.

During fourth quarter 2022, Salisbury did not repurchase any of its outstanding common stock pursuant to its stock repurchase program established in March 2021.

Dividend on Common Shares

On January 25, 2023, the Board of Directors of Salisbury approved a quarterly cash dividend of $0.16 per common share that will be paid on February 24, 2023 to shareholders of record as of February 10, 2023.

Other Matters

In July 2022, Salisbury management discovered that the Bank's trust department terminated a trust account in May 2020 and distributed approximately $1.0 million that should have been retained in continuance of the trust account. In December 2022, Salisbury filed a complaint against the beneficiaries to recover the distributed proceeds and to reinstate the trust account. At this time, management believes that Salisbury's exposure is not yet known or knowable and could potentially range from zero to approximately $0.8 million depending upon the facts and circumstances.

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. For more information, please visit www.salisburybank.com

Forward-Looking Statements

This news release may contain statements relating to Salisbury's and the Bank's future results that are considered "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and expectations of management as well as the assumptions and estimates made by management using information currently available to management. Since these statements reflect the views of management concerning future events, these statements involve risks, uncertainties and assumptions, including among others: changes in market interest rates and general and regional economic conditions; changes in laws and regulations; changes in accounting principles; and the quality or composition of the loan and investment portfolios, technological changes and cybersecurity matters, and other factors that may be described in Salisbury's quarterly reports on Form 10-Q and its annual report on Form 10-K, which are available at the Securities and Exchange Commission's website (www.sec.gov) and to which reference is hereby made. Forward-looking statements made by Salisbury in this news release speak only as of the date they are made. Events or other facts that could cause Salisbury's actual results to differ may arise from time to time and Salisbury cannot predict all such events and factors. Salisbury undertakes no obligation to publicly update any forward-looking statement unless as may be required by law.

Investor presentation slides, which include a review of financial results and trends through the period ended December 31, 2022, are available in the Shareholder Relations section of Salisbury's website at salisburybank.com under About Us/Shareholder Relations/News & Market Information/Presentations.

Salisbury Contact: Richard J. Cantele, Jr., President and Chief Executive Officer
860-435-9801 or rcantele@salisburybank.com



Salisbury Bancorp, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)December 31, 2022December 31, 2021
ASSETS  
Cash and due from banks$5,864 $6,404 
Interest bearing demand deposits with other banks 44,675  168,931 
Total cash and cash equivalents 50,539  175,335 
Interest bearing Time Deposits with Financial Institutions -  750 
Securities  
Available-for-sale at fair value 187,410  202,396 
Mutual funds at fair value 1,933  901 
Federal Home Loan Bank of Boston stock at cost 1,285  1,397 
Loans held-for-sale -  2,684 
Loans receivable, net (allowance for loan losses: $14,846 and $12,962) 1,213,671  1,066,750 
Bank premises and equipment, net 22,148  22,625 
Goodwill 13,815  13,815 
Intangible assets (net of accumulated amortization: $5,653 and $5,462) 227  418 
Accrued interest receivable 6,797  6,260 
Cash surrender value of life insurance policies 30,379  27,738 
Deferred taxes 8,492  2,588 
Other assets 4,886  5,527 
Total Assets$1,541,582 $1,529,184 
LIABILITIES and SHAREHOLDERS' EQUITY  
Deposits  
Demand (non-interest bearing)$395,994 $416,073 
Demand (interest bearing) 231,486  233,600 
Money market 343,965  330,436 
Savings and other 233,578  237,075 
Certificates of deposit 153,370  119,009 
Total deposits 1,358,393  1,336,193 
Repurchase agreements 7,228  11,430 
Federal Home Loan Bank of Boston advances 10,000  7,656 
Subordinated debt 24,531  24,474 
Note payable 128  170 
Finance lease obligations 4,262  4,107 
Accrued interest and other liabilities 8,685  8,554 
Total Liabilities 1,413,227  1,392,584 
Shareholders' Equity  
Common stock - $0.10 per share par value  
Authorized: 10,000,000;  
Issued: 5,798,816 and 5,723,394  
Outstanding: 5,798,816 and 5,723,394 580  286 
Unearned compensation – restricted stock awards (1,144) (925)
Paid-in capital 47,466  46,374 
Retained earnings 102,178  89,995 
Accumulated other comprehensive (loss) income, net (20,725) 870 
Total Shareholders' Equity 128,355  136,600 
Total Liabilities and Shareholders' Equity$1,541,582 $1,529,184 


Salisbury Bancorp, Inc. and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME (unaudited)

 Three months endedTwelve months ended
Periods ended December 31, (in thousands, except per share amounts) 2022  2021  2022  2021 
Interest and dividend income    
Interest and fees on loans$12,595 $10,438 $44,874 $41,080 
Interest on debt securities    
Taxable 992  651  3,479  2,048 
Tax exempt 212  191  787  697 
Other interest and dividends 354  73  871  247 
Total interest and dividend income 14,153  11,353  50,011  44,072 
Interest expense    
Deposits 1,786  509  3,724  2,160 
Repurchase agreements 20  3  30  16 
Finance lease 40  34  163  136 
Note payable 2  3  9  11 
Subordinated debt 233  233  932  1,000 
Federal Home Loan Bank of Boston advances 57  28  114  125 
Total interest expense 2,138  810  4,972  3,448 
Net interest and dividend income 12,015  10,543  45,039  40,624 
Provision expense (release) for loan losses 525  (202) 2,683  (720)
Net interest and dividend income after provision (release) for loan losses 11,490  10,745  42,356  41,344 
Non-interest income    
Trust and wealth advisory 1,125  1,286  4,887  4,970 
Service charges and fees 1,219  1,286  5,299  4,822 
Mortgage banking activities, net 59  88  556  1,000 
Losses on CRA mutual fund (1) (9) (120) (26)
Gains (losses) on securities, net -  -  165  (2)
Bank-owned life insurance ("BOLI") income 191  170  806  556 
Gain on sale of assets -  -  -  73 
Other 25  26  109  107 
Total non-interest income 2,618  2,847  11,702  11,500 
Non-interest expense    
Salaries 3,995  3,753  14,932  13,417 
Employee benefits 1,337  1,033  5,125  5,023 
Premises and equipment 1,081  1,080  4,281  4,114 
Write-down of assets -  -  3  144 
Information processing and services 697  617  2,795  2,441 
Professional fees 921  688  3,218  2,779 
Collections, OREO, and loan related 76  138  376  455 
FDIC insurance 135  171  526  541 
Marketing and community support 161  328  822  881 
Amortization of intangibles 42  57  191  256 
Other 502  606  2,376  2,053 
Total non-interest expense 8,947  8,471  34,645  32,104 
Income before income taxes 5,161  5,121  19,413  20,740 
Income tax provision 1,037  980  3,539  4,267 
Net income$4,124 $4,141 $15,874 $16,473 
Net income available to common shareholders$4,055 $4,076 $15,598 $16,225 
Basic earnings per common share$0.71 $0.72 $2.75 $2.88 
Diluted earnings per common share$0.71 $0.72 $2.74 $2.86 
Common dividends per share$0.16 $0.16 $0.64 $0.61 


Salisbury Bancorp, Inc. and Subsidiary
SELECTED CONSOLIDATED FINANCIAL DATA (unaudited)

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At or for the quarters ended
(in thousands, except per share amounts and ratios)Q4 2022Q3 2022Q2 2022Q1 2022Q4 2021
Total assets$1,541,582 $1,512,138 $1,496,521 $1,465,082 $1,529,184 
Loans receivable, net 1,213,671  1,176,493  1,135,758  1,066,216  1,066,750 
Total securities 190,628  192,530  205,727  217,591  204,694 
Deposits 1,358,393  1,325,204  1,316,539  1,290,474  1,336,193 
FHLBB advances 10,000  20,000  -  419  7,656 
Shareholders' equity 128,355  123,160  127,303  130,066  136,600 
Wealth assets under administration 1,289,918  1,232,272  1,261,244  1,049,240  1,083,152 
Discretionary wealth assets under administration 561,050  522,109  546,506  625,346  657,789 
Non-discretionary wealth assets under administration 728,868  710,163  714,738  423,894  425,363 
Non-performing loans 2,663  1,860  4,229  2,765  4,199 
Non-performing assets 2,663  1,860  4,229  2,765  4,199 
Accruing loans past due 30-89 days 1,309  390  1,001  2,349  1,342 
Net interest and dividend income 12,015  11,844  10,872  10,306  10,543 
Net interest and dividend income, tax equivalent (1) 12,221  12,054  11,061  10,484  10,735 
Provision expense (release) for loan losses 525  695  1,100  363  (202)
Non-interest income 2,618  2,693  3,297  3,094  2,847 
Non-interest expense 8,947  8,512  8,532  8,653  8,471 
Income before income taxes 5,161  5,330  4,537  4,384  5,121 
Income tax provision 1,037  994  692  816  980 
Net income 4,124  4,336  3,845  3,568  4,141 
Net income allocated to common shareholders 4,055  4,264  3,772  3,508  4,076 
      
Per share data
Basic earnings per common share$0.71 $0.75 $0.67 $0.62 $0.72 
Diluted earnings per common share 0.71  0.75  0.66  0.62  0.72 
Dividends per common share 0.16  0.16  0.16  0.16  0.16 
Book value per common share 22.13  21.29  22.01  22.56  23.87 
Tangible book value per common share - Non-GAAP ⁽2 19.71  18.86  19.57  20.10  21.38 
Common shares outstanding at end of period (in thousands) 5,799  5,784  5,784  5,765  5,723 
Weighted average common shares outstanding, to calculate basic earnings per share (in thousands)  5,688  5,687  5,666  5,636  5,635 
Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands)  5,710  5,713  5,699  5,694  5,670 
      
Profitability ratios     
Net interest margin (tax equivalent) (1) 3.28% 3.27% 3.15% 2.95% 2.99%
Efficiency ratio (2) 56.66  57.38  59.49  63.38  61.91 
Effective income tax rate 20.10  18.65  15.25  18.60  19.13 
Return on average assets 1.07  1.13  1.06  0.97  1.10 
Return on average common shareholders' equity 13.05  13.23  11.98  10.65  12.14 
      
Credit quality ratios     
Non-performing loans to loans receivable, gross 0.22% 0.16% 0.37% 0.26% 0.39%
Accruing loans past due 30-89 days to loans receivable, gross 0.11  0.03  0.09  0.22  0.12 
Allowance for loan losses to loans receivable, gross 1.21  1.20  1.19  1.20  1.20 
Allowance for loan losses to non-performing loans 557.5  770.6  324.0  467.3  308.7 
Non-performing assets to total assets 0.17  0.12  0.28  0.19  0.27 
      
Capital ratios     
Common shareholders' equity to assets 8.33% 8.14% 8.51% 8.88% 8.93%
Tangible common shareholders' equity to tangible assets - Non-GAAP (2) 7.48  7.28  7.63  7.99  8.08 
Tier 1 leverage capital (3) 9.99  9.83  10.04  9.66  9.42 
Total risk-based capital (3) 13.43  13.24  13.28  13.98  14.08 
Common equity tier 1 capital (3) 12.24  12.07  12.13  12.80  12.87 

(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) Represents the capital ratios of the Bank.


Salisbury Bancorp, Inc. and Subsidiary
SUPPLEMENTAL INFORMATION – Non-GAAP Financial Measures (unaudited)

At or for the quarters ended
(in thousands, except per share amounts and ratios)Q4 2022Q3 2022Q2 2022 Q1 2022 Q4 2021
Common Shareholders' Equity$128,355 $123,160 $127,303 $130,066 $136,600 
Less: Goodwill (13,815) (13,815) (13,815) (13,815) (13,815)
Less: Intangible assets (227) (269) (314) (364) (418)
Tangible Common Shareholders' Equity$114,313 $109,076 $113,174 $115,887 $122,367 
Total Assets$1,541,582 $1,512,138 $1,496,521 $1,465,082 $1,529,184 
Less: Goodwill (13,815) (13,815) (13,815) (13,815) (13,815)
Less: Intangible assets (227) (269) (314) (364) (418)
Tangible Total Assets$1,527,540 $1,498,054 $1,482,392 $1,450,903 $1,514,951 
Common Shares outstanding (in thousands) 5,799  5,784  5,784  5,765  5,723 
      
Book value per Common Share – GAAP$22.13 $21.29 $22.01 $22.56 $23.87 
Tangible book value per Common Share - Non-GAAP 19.71  18.86  19.57  20.10  21.38 
Tangible common shareholders' equity to tangible total assets - Non-GAAP 7.48% 7.28% 7.63% 7.99% 8.08%
Consolidated:     
Non-interest expense$8,947 $8,512 $8,532 $8,653 $8,471 
Amortization of core deposit intangibles (42) (46) (50) (54) (57)
OREO recovery -  15  -  -  - 
Merger-related costs (497) -  -  -  - 
Fraud-related recovery (losses) -  -  50  (251) - 
Adjusted non-interest expense$8,408 $8,481 $8,532 $8,348 $8,414 
Net interest and dividend income, tax equivalent$12,221 $12,054 $11,061 $10,484 $10,735 
Non-interest income 2,618  2,693  3,297  3,094  2,847 
Losses (gains) on securities 1  47  75  (168) 9 
Gains on sale of fixed assets -  -  -  -  - 
BOLI proceeds receivable -  -  (89) -  - 
Gains on sale of loans -  (15) -  (239) - 
Adjusted revenue$14,840 $14,779 $14,344 $13,171 $13,591 
Efficiency Ratio – Non-GAAP 1 56.66% 57.38% 59.49% 63.38% 61.91%
       

1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q4 2022: 54.64%; Q3 2022: 55.28%; Q2 2022: 57.21%; Q1 2022: 61.83%; Q4 2021: 60.62%.


Salisbury Bancorp, Inc. and Subsidiary
SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income (unaudited)

At or for the quarters endedAverage BalanceIncome / ExpenseAverage Yield / Rate
(dollars in thousands)Q4 2022Q3 2022Q4 2021Q4 2022Q3 2022Q4 2021Q4 2022Q3 2022Q4 2021
Loans (a)(d)$1,209,184$1,168,037$1,078,097$12,726$11,675$10,5604.16%3.95%3.89%
Securities (c)(d) 217,963 221,620 186,284 1,279 1,192 9112.35 2.15 1.96 
FHLBB stock 1,416 1,191 1,641 15 8 114.29 2.92 2.68 
Short term funds (b) 43,328 68,818 155,502 339 344 623.10 1.98 0.16 
Total interest-earning assets 1,471,891 1,459,666 1,421,524 14,359 13,219 11,5443.86 3.58 3.22 
Other assets 52,855 60,283 76,059      
Total assets$1,524,746$1,519,949$1,497,583      
Interest-bearing demand deposits$232,228$233,547$225,607 115 106 1040.20 0.18 0.18 
Money market accounts 331,451 320,552 329,005 915 356 1391.10 0.44 0.17 
Savings and other 246,650 246,101 233,463 291 179 660.47 0.29 0.11 
Certificates of deposit 128,787 131,918 121,192 465 242 2001.43 0.73 0.65 
Total interest-bearing deposits 939,116 932,118 909,267 1,786 883 5090.75 0.38 0.21 
Repurchase agreements 6,615 9,684 7,923 20 4 31.18 0.18 0.16 
Finance lease 5,475 5,318 2,696 40 41 342.94 3.05 5.10 
Note payable 132 142 173 2 2 36.16 6.15 6.49 
Subordinated debt (f) 24,523 24,508 24,467 233 233 2333.80 3.80 3.82 
FHLBB advances 6,576 217 8,071 57 2 283.37 3.15 1.38 
Total interest-bearing liabilities 982,437 971,987 952,597 2,138 1,165 8100.86 0.48 0.34 
Demand deposits 408,672 410,861 401,294      
Other liabilities 8,233 7,065 8,410      
Shareholders' equity 125,404 130,036 135,282      
Total liabilities & shareholders' equity$1,524,746$1,519,949$1,497,583      
Net interest income   $12,221$12,054$10,735   
Spread on interest-bearing funds      3.00 3.11 2.88 
Net interest margin (e)      3.28 3.27 2.99

 

(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 Q4 2022, Q3 2022 and Q4 2021 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 2022 and 2021.
(e)  Net interest income divided by average interest-earning assets.
(f)  Net of issuance costs.


Salisbury Bancorp, Inc. and Subsidiary
SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income (unaudited)

Twelve months ended December 31,Average BalanceIncome / ExpenseAverage Yield / Rate
(dollars in thousands) 2022 2021 2022 20212022 2021 
Loans (a)(d)$1,142,663$1,059,663$45,373$41,5493.93%3.89%
Securities (c)(d) 218,331 144,833 4,549 2,9912.08 2.06 
FHLBB stock 1,315 1,790 41 373.12 2.09 
Short term funds (b) 72,309 158,907 830 2101.15 0.13 
Total earning assets 1,434,618 1,365,193 50,793 44,7873.51 3.26 
Other assets 62,365 72,590    
Total assets$1,496,983$1,437,783    
Interest-bearing demand deposits$231,970$224,763 429 4350.18 0.19 
Money market accounts 318,302 315,469 1,554 5470.49 0.17 
Savings and other 240,695 215,300 630 2390.26 0.11 
Certificates of deposit 132,192 130,879 1,111 9390.84 0.72 
Total interest-bearing deposits 923,159 886,411 3,724 2,1600.40 0.24 
Repurchase agreements 8,417 10,679 30 160.36 0.15 
Finance lease 5,294 2,739 163 1363.07 4.96 
Note payable 147 187 9 116.14 6.13 
Subordinated Debt (f) 24,502 22,511 932 1,0003.80 4.44 
FHLBB advances 2,446 9,938 114 1254.59 1.24 
Total interest-bearing liabilities 963,965 932,465 4,972 3,4480.52 0.37 
Demand deposits 395,848 366,926    
Other liabilities 7,183 7,285    
Shareholders' equity 129,987 131,107    
Total liabilities & shareholders' equity$1,496,983$1,437,783    
Net interest income  $45,821$41,339  
Spread on interest-bearing funds    3.00 2.89 
Net interest margin (e)    3.16 3.01 

(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 $0.7 million and $0.5 million, respectively for 2022 and 2021 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 2022 and 2021.
(e)  Net interest income divided by average interest-earning assets.
(f)  Net of issuance costs.

 


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