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Salisbury Bancorp, Inc. Increases Dividend and Reports Record Results For First Quarter 2021

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·27 min read
In this article:
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  • First Quarter 2021 Record Net Income of $1.59 per Basic Common Share

  • Quarterly Cash Dividend Increased 3.4% to $0.30 Per Common Share

  • Non-performing Assets were 0.41% of Total Assets Compared with 0.44% at December 31, 2020

  • Common Equity Tier 1 and Total Risk-Based Capital Ratios of 13.33% and 14.58%, Respectively

  • Issued $25 Million of Subordinated Debt and Announced a Share Repurchase Program

LAKEVILLE, Conn., April 21, 2021 (GLOBE NEWSWIRE) -- Salisbury Bancorp, Inc. (“Salisbury”), (NASDAQ Capital Market: “SAL”), the holding company for Salisbury Bank and Trust Company (the “Bank”), announced results for its first quarter ended March 31, 2021.

Net income available to common shareholders was $4.5 million, or $1.59 per basic common share, for Salisbury’s first quarter ended March 31, 2021 (first quarter 2021), compared with $2.8 million, or $0.99 per basic common share, for the fourth quarter ended December 31, 2020 (fourth quarter 2020), and $2.0 million, or $0.72 per basic common share, for the first quarter ended March 31, 2020 (first quarter 2020).

Salisbury’s President and Chief Executive Officer, Richard J. Cantele, Jr., stated, “Thanks to the continued dedication and commitment of our employees, we are pleased to report record results for the quarter. Asset quality remains strong and the economic climate in the markets in which we operate is expected to continue to improve as the vaccine rollout gains momentum. We continued to support our customers and local communities during the first quarter by processing an additional 435 loan applications for $47 million under the Small Business Administration’s (SBA) Paycheck Protection Program (PPP). Since the inception of the program, we have processed nearly 1,400 loan applications for aggregate loans approaching $150 million. In addition, we strengthened our capital base through a $25 million subordinated debt offering on extremely favorable terms, and our Board of Directors approved a common stock repurchase program, which authorizes Salisbury to repurchase up to 5% of its outstanding common shares. We are well-positioned to grow our franchise and continue to meet the needs of our customers. We remain committed to providing outstanding customer service and supporting our local communities.”

Net Interest and Dividend Income

Tax equivalent net interest income of $10.5 million for the first quarter 2021 increased $527 thousand, or 5.3%, versus fourth quarter 2020, and increased $1.6 million, or 17.5%, versus first quarter 2020. Tax equivalent interest income of $11.3 million for first quarter 2021 increased $320 thousand, or 2.9%, versus fourth quarter 2020 and increased $381 thousand, or 3.5%, from first quarter 2020. First quarter 2021 interest income included PPP fees and interest of $1.3 million compared with $855 thousand in fourth quarter 2020. The cost of interest bearing liabilities of $746 thousand for first quarter 2021 decreased $207 thousand, or 21.8%, compared to fourth quarter 2020 and declined $1.2 million, or 61.4% from first quarter 2020.

Average earning assets of $1.3 billion for first quarter 2021 were essentially unchanged from fourth quarter 2020, and increased $194.2 million, or 18.3%, versus first quarter 2020. Average earning assets for first quarter 2021 included average PPP loan balances of $92.8 million, net of deferred fees. Average total interest bearing liabilities of $0.9 billion for first quarter 2021 were essentially unchanged from fourth quarter 2020 and increased $97.5 million, or 12.7%, versus first quarter 2020. The increase from first quarter 2020 primarily reflected the funding of PPP loans.

The tax equivalent net interest margin for first quarter 2021 was 3.34% compared with 3.17% for fourth quarter 2020 and 3.35% for first quarter 2020. Excluding the impact of PPP loans, the tax equivalent net interest margin for first quarter 2021 was 3.16% compared with 3.13% for fourth quarter 2020. There were no PPP loans recorded on Salisbury’s consolidated balance sheet in first quarter 2020. See SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income on page 8 on this release for additional details.

Non-Interest Income

Non-interest income of $2.8 million for first quarter 2021 increased $365 thousand versus fourth quarter 2020 and increased $596 thousand versus first quarter 2020.

Trust and Wealth Advisory fees of $1.1 million for first quarter 2021 increased $80 thousand from fourth quarter 2020 and increased $116 thousand versus first quarter 2020. The increase from first quarter 2020 primarily reflected higher asset-based fees. Assets under administration were $902.1 million at March 31, 2021 compared with $944.3 million at December 31, 2020 and $639.5 million at March 31, 2020. Discretionary assets under administration of $578.2 million in first quarter 2021 increased from $555.0 million in fourth quarter 2020 and $425.4 million in first quarter 2020 primarily due to higher market valuations. Non-discretionary assets under administration of $323.9 million in first quarter 2021 declined from $389.4 million in fourth quarter 2020 and increased from $214.1 million in first quarter 2020. The decline from fourth quarter 2020 reflected a lower valuation of shares in a partnership for one significant client relationship, and the increase from first quarter 2020 was due to the addition of partnership assets under administration for the same client relationship. The trust and wealth business records only a nominal annual fee on this relationship.

Service charges and fees of $0.9 million for first quarter 2021 increased $92 thousand versus fourth quarter 2020 and increased $45 thousand versus first quarter 2020. The increase from fourth quarter 2020 primarily reflected an additional two months of deposit fees as such fees were reinstated in late November 2020. The increase from first quarter 2020 primarily reflected higher interchange fees partially offset by lower deposit fees. Income from mortgage sales and servicing increased $169 thousand versus fourth quarter 2020 and increased $480 thousand versus first quarter 2020. The increase from the prior periods reflected a higher sales volume of residential mortgage loans to the FHLB Boston.

Non-interest income for the first quarter 2021 included BOLI income of $125 thousand compared to $110 thousand in fourth quarter 2020 and $134 thousand in first quarter 2020.

Non-Interest Expense

Non-interest expense of $7.3 million for first quarter 2021 decreased $794 thousand versus fourth quarter 2020 and increased $323 thousand versus first quarter 2020. Compensation expense of $4.2 million for first quarter 2021 decreased $529 thousand from fourth quarter 2020 and increased $217 thousand versus first quarter 2020. The decline from fourth quarter 2020 primarily reflected lower salaries, production, and incentive accruals as well as higher deferred loan origination expenses related to the processing of PPP loans. The increase from first quarter 2020 primarily reflected higher salary, production and incentive accruals, partly offset by higher deferred loan origination expenses related to the processing of PPP loans.

Excluding compensation, other non-interest expenses for first quarter 2021 declined $265 thousand from fourth quarter 2020 and increased $106 thousand from first quarter 2020. The decline from fourth quarter 2020 primarily reflected lower premises and equipment and marketing expenses. The increase from first quarter 2020 primarily reflected higher professional fees, higher FDIC insurance costs and higher lending related costs.

The effective income tax rates for first quarter 2021, fourth quarter 2020 and first quarter 2020 were 21.6%, 17.5% and 14.4%, respectively. The higher tax rate in first quarter 2021 primarily reflected a lower mix of tax-exempt income from municipal bonds, tax advantaged loans and bank-owned life insurance on a comparatively higher level of pre-tax income.

Loans

Gross loans receivable of $1.1 billion increased $13.6 million from December 31, 2020, and increased $95.3 million from $959.8 million at March 31, 2020. Commercial & industrial loan growth during first quarter 2021 reflected the origination of approximately $47 million of additional PPP loans, partly offset by the forgiveness of approximately $36 million of PPP loans by the SBA. At March 31, 2021 Salisbury had PPP loans, net of deferred fees, of approximately $94 million on its balance sheet compared with approximately $85 million at December 31, 2020. The decline in residential real estate balances reflected the sale of $21.3 million of loans to the FHLB Boston during first quarter 2021 as part of the Bank’s strategy to manage interest rate risk. The ratio of gross loans to deposits for first quarter 2021 was 87.1% compared with 92.2% for fourth quarter 2020 and 99.4% for first quarter 2020. Balances by loan type for the comparative periods were as follows:

Loan Type

Q1 2021

Q4 2020

Q1 2020

Residential Real Estate

$

418,991

$

425,677

$

432,241

Commercial Real Estate

341,142

342,563

321,358

Commercial & Industrial

249,357

227,148

157,573

Farm Land

3,606

3,198

3,612

Vacant Land

13,228

14,079

14,488

Municipal

21,495

21,512

20,964

Consumer

8,617

7,687

8,195

Deferred (Fees)/Cost

(1,365

)

(372

)

1,329

Gross Loans Receivable

$

1,055,071

$

1,041,492

$

959,760

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 March 31, 2021, loan payments were deferred on 14 commercial loans ($27 million loan balance). There were no outstanding deferrals related to residential and consumer loans as of March 31, 2021.

Non-performing assets increased $58 thousand during the first quarter to $5.7 million, or 0.41% of total assets at March 31, 2021, from $5.6 million, or 0.44% of total assets at December 31, 2020, and increased $2.5 million from $3.2 million, or 0.28% of total assets, at March 31, 2020.

The amount of total impaired and potential problem loans was $48.9 million or 4.64% of gross loans receivable at March 31, 2021 compared to $30.1 million, or 2.90% of gross loans receivable at December 31, 2020 and $28.1 million, or 2.93% of gross loans receivable at March 31, 2020. The increase from the comparative periods primarily reflected loans to certain borrowers in the hospitality and entertainment and recreation industries for which loan payments are currently deferred due to COVID-19.

Accruing loans receivable 30-to-89 days past due decreased $4.5 million during first quarter 2021 to $2.4 million, or 0.23% of gross loans receivable, from $6.9 million, or 0.66% of gross loans receivable at December 31, 2020, and decreased $3.7 million from $6.1 million, or 0.64% of gross loans receivable at March 31, 2020.

The allowance for loan losses for first quarter 2021 was $13.9 million compared with $13.8 million for fourth quarter 2020 and $10.6 million for first quarter 2020.The provision for loan loss expense was $158 thousand for first quarter 2021 versus $840 thousand for fourth quarter 2020, and $1.7 million for the first quarter 2020. The decrease in the provision versus comparative periods reflected management’s current assessment of the impact of the COVID-19 pandemic on the Bank’s loan portfolio. Net loan charge-offs (recoveries) were $25 thousand for the first quarter 2021, $368 thousand for fourth quarter 2020 and ($17) thousand for the first quarter 2020. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, excluding PPP loans, was 1.45% for the first quarter 2021, versus 1.44% for the fourth quarter 2020 and 1.11% for the first quarter 2020. Similarly, reserve coverage, as measured by the ratio of the allowance for loan losses to non-performing loans was 243% for the first quarter 2021, versus 244% for fourth quarter 2020 and 333% for first quarter 2020.

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

Deposits and Borrowings

Deposits were $1.2 billion at March 31, 2021 compared with $1.1 billion at December 31, 2020 and $965.6 million at March 31, 2020. The increase in deposits from fourth quarter 2020 of $82.1 million reflected the funding and forgiveness of PPP loans as well as other customer activity. Deposits at March 31, 2021 reflected brokered deposits, including CDARS one-way buys, of $18.0 consistent with December 31, 2020 and $58.2 million at March 31, 2020. Average total deposits for the first quarter 2021 were $1.2 billion compared with $1.1 billion for the fourth quarter 2020 and $949.5 million for the first quarter 2020. Average total deposits for the first quarter 2021 included average brokered deposits of $18.0 million consistent with fourth quarter 2020 and $33.3 million for first quarter 2020.

Federal Home Loan Bank of Boston (FHLBB) advances decreased $1.2 million during the quarter to $11.4 million at March 31, 2021 and decreased $29.5 million from March 31, 2020. Salisbury’s excess borrowing capacity at FHLBB was approximately $248 million at March 31, 2021.

Capital

Shareholders’ equity increased $2.5 million in first quarter to $127.2 million at March 31, 2021 as net income of $4.5 million, and restricted stock activity of $0.2 million were partly offset by common stock dividends paid of $0.8 million and unrealized losses in the available-for-sale securities portfolio of $1.4 million. Book value per common share increased $0.84 during the first quarter 2021 to $44.72 per share and increased $3.67 from the first quarter 2020. Tangible book value per common share increased $0.87 during first quarter 2021 to $39.65 and increased $3.80 as compared to the first quarter 2020.

The Bank’s regulatory capital ratios remain in compliance with regulatory “well capitalized” requirements. At March 31, 2021, the Bank’s Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 9.83%, 14.58%, and 13.33%, respectively, compared with regulatory “well capitalized” minimums of 5.00%, 10.00%, and 6.5%, respectively.

On March 31, 2021 Salisbury issued $25 million of subordinated debt that matures in 2031. During the first five years, the debt is non-callable, and the coupon is fixed at 3.50%. After year five, the coupon will float at the then three-month Secured Overnight Financing Rate plus 280 basis points. The proceeds, net of issuance costs, will be used for general corporate purposes, including the redemption of $10 million in outstanding subordinated debt, which Salisbury issued over five years ago at a higher coupon rate, as well as potential share repurchases pursuant to the Common Stock Repurchase Plan approved by the Board of Directors in March 2021. At March 31, 2021, $15 million of the net proceeds was retained at the holding company level and the remainder was allocated to the Bank.

In March 2021, Salisbury announced that its Board of Directors adopted a share repurchase program, which provides for the repurchase of Salisbury’s common stock in amounts up to an aggregate of five percent (5%) of the outstanding shares of Salisbury’s common stock from time to time over the next twelve months.

Dividend on Common Shares

The Board of Directors of Salisbury approved a $0.01 increase in the quarterly dividend at its April 21, 2021 meeting. The quarterly cash dividend of $0.30 per common share will be paid on May 28, 2021 to shareholders of record as of May 14, 2021.

Background

Salisbury Bancorp, Inc. is the parent company of Salisbury Bank and Trust Company, a Connecticut chartered commercial bank serving the communities of northwestern Connecticut and proximate communities in New York and Massachusetts, since 1848, through full service branches in Canaan, Lakeville, Salisbury and Sharon, Connecticut; Great Barrington, South Egremont and Sheffield, Massachusetts; and Dover Plains, Fishkill, Millerton, Newburgh, New Paltz, Poughkeepsie, and Red Oaks Mill, New York. The Bank offers a broad spectrum of consumer and business banking products and services as well as trust and wealth advisory services.

Forward-Looking Statements

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

Investor presentation slides, which include a review of financial results and trends through the period ended March 31, 2021, are available in the Shareholder Relations section of Salisbury’s website at salisburybank.com under Shareholder Relations/News & Market Information/Presentations.

Source: Salisbury Bancorp, Inc.

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)

March 31, 2021

December 31, 2020

ASSETS

Cash and due from banks

$

8,785

$

10,599

Interest bearing demand deposits with other banks

150,411

82,563

Total cash and cash equivalents

159,196

93,162

Interest bearing Time Deposits with Financial Institutions

750

750

Securities

Available-for-sale at fair value

127,343

98,411

CRA mutual fund at fair value

904

917

Federal Home Loan Bank of Boston stock at cost

1,713

1,713

Loans held-for-sale

2,313

2,735

Loans receivable, net (allowance for loan losses: $13,886 and $13,754)

1,041,185

1,027,738

Bank premises and equipment, net

20,831

20,355

Goodwill

13,815

13,815

Intangible assets (net of accumulated amortization: $5,278 and $5,207)

603

674

Accrued interest receivable

6,237

6,373

Cash surrender value of life insurance policies

21,307

21,182

Deferred taxes

2,849

2,412

Other assets

4,083

3,423

Total Assets

$

1,403,129

$

1,293,660

LIABILITIES and SHAREHOLDERS' EQUITY

Deposits

Demand (non-interest bearing)

$

334,638

$

310,769

Demand (interest bearing)

229,200

218,869

Money market

311,971

278,146

Savings and other

207,109

189,776

Certificates of deposit

128,253

131,514

Total deposits

1,211,171

1,129,074

Repurchase agreements

8,687

7,116

Federal Home Loan Bank of Boston advances

11,396

12,639

Subordinated debt

34,305

9,883

Note payable

197

208

Finance lease obligations

1,658

1,673

Accrued interest and other liabilities

8,473

8,315

Total Liabilities

1,275,887

1,168,908

Shareholders' Equity

Common stock - $0.10 per share par value

Authorized: 5,000,000;

Issued: 2,845,147 and 2,843,292

Outstanding: 2,845,147 and 2,843,292

285

284

Unearned compensation – restricted stock awards

(646

)

(774

)

Paid-in capital

45,369

45,264

Retained earnings

80,675

76,974

Accumulated other comprehensive income, net

1,559

3,004

Total Shareholders' Equity

127,242

124,752

Total Liabilities and Shareholders' Equity

$

1,403,129

$

1,293,660


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

Three months ended March 31, (in thousands, except per share amounts)

2021

2020

Interest and dividend income

Interest and fees on loans

$

10,477

$

9,987

Interest on debt securities

Taxable

423

455

Tax exempt

162

185

Other interest and dividends

34

91

Total interest and dividend income

11,096

10,718

Interest expense

Deposits

555

1,509

Repurchase agreements

3

7

Finance lease

32

36

Note payable

3

4

Subordinated debt

119

156

Federal Home Loan Bank of Boston advances

34

219

Total interest expense

746

1,931

Net interest and dividend income

10,350

8,787

Provision for loan losses

158

1,706

Net interest and dividend income after provision for loan losses

10,192

7,081

Non-interest income

Trust and wealth advisory

1,146

1,030

Service charges and fees

950

905

Mortgage banking activities, net

608

128

(Losses) gains on CRA mutual fund

(16

)

14

Gains on securities, net

-

1

Bank-owned life insurance (“BOLI”) income

125

134

Other

28

33

Total non-interest income

2,841

2,245

Non-interest expense

Salaries

2,901

2,850

Employee benefits

1,312

1,146

Premises and equipment

954

911

Data processing

565

540

Professional fees

711

628

Collections, OREO, and loan related

84

25

FDIC insurance

145

105

Marketing and community support

82

125

Amortization of intangibles

71

87

Other

434

519

Total non-interest expense

7,259

6,936

Income before income taxes

5,774

2,390

Income tax provision

1,248

343

Net income

$

4,526

$

2,047

Net income available to common shareholders

$

4,462

$

2,013

Basic earnings per common share

$

1.59

$

0.72

Diluted earnings per common share

1.59

0.72

Common dividends per share

0.29

0.29


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

At or for the quarters ended

(in thousands, except per share amounts and ratios)

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Total assets

$

1,403,129

$

1,293,660

$

1,292,760

$

1,287,137

$

1,145,751

Loans receivable, net

1,041,185

1,027,738

1,031,593

1,039,524

949,142

Total securities

129,960

101,043

99,794

93,717

94,966

Deposits

1,211,171

1,129,074

1,095,141

1,085,599

965,620

FHLBB advances

11,396

12,639

43,880

55,118

40,932

Shareholders’ equity

127,242

124,752

122,240

118,444

116,143

Wealth assets under administration

902,141

944,349

748,188

704,052

639,457

Discretionary wealth assets under administration

578,199

554,997

514,988

480,456

425,359

Non-discretionary wealth assets under administration

323,942

389,352

233,200

223,596

214,098

Non-performing loans

5,706

5,648

4,681

4,815

3,188

Non-performing assets

5,706

5,648

4,681

4,815

3,188

Accruing loans past due 30-89 days

2,374

6,850

1,638

2,656

6,109

Net interest and dividend income

10,350

9,817

9,925

9,617

8,787

Net interest and dividend income, tax equivalent(1)

10,520

9,993

10,101

9,786

8,954

Provision for loan losses

158

840

686

1,806

1,706

Non-interest income

2,841

2,476

3,286

2,316

2,245

Non-interest expense

7,259

8,054

7,259

6,789

6,936

Income before income taxes

5,774

3,399

5,266

3,338

2,390

Income tax provision

1,248

596

910

604

343

Net income

4,526

2,803

4,356

2,734

2,047

Net income allocated to common shareholders

4,462

2,764

4,288

2,691

2,013

Per share data

Basic earnings per common share

$

1.59

$

0.99

$

1.53

$

0.96

$

0.72

Diluted earnings per common share

1.59

0.98

1.53

0.96

0.72

Dividends per common share

0.29

0.29

0.29

0.29

0.29

Book value per common share

44.72

43.88

42.99

41.66

41.05

Tangible book value per common share - Non-GAAP ⁽2

39.65

38.78

37.87

36.51

35.85

Common shares outstanding at end of period (in thousands)

2,845

2,843

2,843

2,843

2,829

Weighted average common shares outstanding, to calculate basic earnings per share (in thousands)

2,804

2,803

2,799

2,796

2,788

Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands)

2,815

2,811

2,807

2,803

2,797

Profitability ratios

Net interest margin (tax equivalent) (1)

3.34

%

3.17

%

3.29

%

3.31

%

3.35

%

Efficiency ratio (3)

53.75

63.88

56.33

56.23

61.36

Effective income tax rate

21.61

17.52

17.28

18.11

14.35

Return on average assets

1.38

0.85

1.34

0.89

0.73

Return on average common shareholders’ equity

14.53

8.97

14.31

9.36

7.07

Credit quality ratios

Non-performing loans to loans receivable, gross

0.54

%

0.54

%

0.45

%

0.46

%

0.33

%

Accruing loans past due 30-89 days to loans receivable, gross

0.23

0.66

0.16

0.25

0.64

Allowance for loan losses to loans receivable, gross

1.32

1.32

1.24

1.18

1.11

Allowance for loan losses to non-performing loans

243.4

243.5

277.8

256.9

333.0

Non-performing assets to total assets

0.41

0.44

0.36

0.37

0.28

Capital ratios

Common shareholders' equity to assets

9.07

%

9.64

%

9.46

%

9.20

%

10.14

%

Tangible common shareholders' equity to tangible assets - Non-GAAP(2)

8.12

8.62

8.42

8.16

8.97

Tier 1 leverage capital (4)

9.83

8.90

8.93

8.95

9.65

Total risk-based capital (4)

14.58

13.57

13.60

13.15

12.97

Common equity tier 1 capital (4)

13.33

12.31

12.35

11.90

11.79

(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)

Q1 2021

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Common Shareholders' Equity

$

127,242

$

124,752

$

122,240

$

118,444

$

116,143

Less: Goodwill

(13,815

)

(13,815

)

(13,815

)

(13,815

)

(13,815

)

Less: Intangible assets

(603

)

(674

)

(748

)

(825

)

(908

)

Tangible Common Shareholders' Equity

$

112,824

$

110,263

$

107,677

$

103,804

$

101,420

Total Assets

$

1,403,129

$

1,293,660

$

1,292,760

$

1,287,137

$

1,145,751

Less: Goodwill

(13,815

)

(13,815

)

(13,815

)

(13,815

)

(13,815

)

Less: Intangible assets

(603

)

(674

)

(748

)

(825

)

(908

)

Tangible Total Assets

$

1,388,711

$

1,279,171

$

1,278,197

$

1,272,497

$

1,131,028

Common Shares outstanding

2,845

2,843

2,843

2,843

2,829

Book value per Common Share – GAAP

$

44.72

$

43.88

$

42.99

$

41.66

$

41.05

Tangible book value per Common Share - Non-GAAP

39.65

38.78

37.87

36.51

35.85

Tangible common shareholders’ equity to tangible total assets - Non-GAAP

8.12

%

8.62

%

8.42

%

8.16

%

8.97

%

Consolidated:

Non-interest expense

$

7,259

$

8,054

$

7,259

$

6,789

$

6,936

Less: Amortization of core deposit intangibles

(71

)

(74

)

(78

)

(83

)

(87

)

Less: Foreclosed property expense including OREO gains, losses and
Write downs

-

-

2

(7

)

13

Adjusted non-interest expense

$

7,188

$

7,980

$

7,183

$

6,699

$

6,862

Net interest and dividend income, tax equivalent

$

10,520

$

9,993

$

10,101

$

9,786

$

8,955

Non-interest income

2,841

2,476

3,286

2,316

2,245

Losses (gains) on securities

16

24

(34

)

(189

)

(15

)

BOLI proceeds

-

-

(601

)

-

-

Adjusted revenue

$

13,377

$

12,493

$

12,752

$

11,914

$

11,185

Efficiency Ratio – Non-GAAP 1

53.75

%

63.88

%

56.33

%

56.23

%

61.36

%

1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q1 2021: 51.97%; Q4 2020: 62.62%; Q3 2020: 54.76%; Q2 2020: 54.29%; Q1 2020: 59.83%.

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)

Q1 2021

Q4 2020

1Q 2020

Q1 2021

Q4 2020

1Q 2020

Q1 2021

Q4 2020

1Q 2020

Loans (a)(d)

$

1,051,658

$

1,043,613

$

948,035

$

10,592

$

10,257

$

10,096

4.02

%

3.90

%

4.26

%

Securities (c)(d)

103,062

92,633

89,596

640

624

698

2.48

2.70

3.12

FHLBB stock

1,948

2,594

3,041

9

34

33

1.85

5.28

4.34

Short term funds (b)

101,401

112,463

23,218

25

31

58

0.10

0.11

1.00

Total interest-earning assets

1,258,069

1,251,303

1,063,890

11,266

10,946

10,885

3.57

3.48

4.09

Other assets

71,252

63,937

64,438

Total assets

$

1,329,321

$

1,315,240

$

1,128,328

Interest-bearing demand deposits

$

218,425

$

212,375

$

154,604

106

110

119

0.20

0.21

0.31

Money market accounts

288,767

288,629

240,680

129

150

560

0.18

0.21

0.93

Savings and other

197,526

188,080

164,174

56

59

234

0.11

0.12

0.57

Certificates of deposit

129,603

130,809

154,869

264

310

596

0.83

0.94

1.54

Total interest-bearing deposits

834,321

819,893

714,327

555

629

1,509

0.27

0.31

0.84

Repurchase agreements

8,453

9,220

5,672

3

3

7

0.15

0.15

0.49

Capital lease

2,824

2,897

3,050

32

35

36

4.60

4.81

4.72

Note payable

200

212

240

3

3

4

6.18

6.10

6.67

Subordinated debt (f)

10,156

9,879

9,860

119

150

156

4.68

6.06

6.33

FHLBB advances

11,825

23,491

37,118

34

133

219

1.14

2.21

2.36

Total interest-bearing liabilities

867,779

865,592

770,267

746

953

1,931

0.35

0.44

1.00

Demand deposits

328,372

318,370

235,129

Other liabilities

6,839

7,267

6,856

Shareholders’ equity

126,331

124,011

116,076

Total liabilities & shareholders’ equity

$

1,329,321

$

1,315,240

$

1,128,328

Net interest income

$

10,520

$

9,993

$

8,954

Spread on interest-bearing funds

3.22

3.04

3.09

Net interest margin (e)

3.34

3.17

3.35

(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 $170,000, $176,000 and $167,000, respectively, for Q1 2021, Q4 2020 and Q1 2020 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2021 and 2020.
(e) Net interest income divided by average interest-earning assets.
(f) Net of issuance costs.