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Salisbury Bancorp, Inc. Reports Record Full Year 2020 Results; Declares 29 Cent Dividend

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·31 min read
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  • Fourth Quarter and Record Full Year 2020 Net Income of $0.99 and $4.21 per Basic Common Share, Respectively

  • Common Equity Tier 1 and Total Capital Ratios of 12.3% and 13.6%, Respectively

  • Non-Performing Assets were 0.44% of Total Assets Compared with 0.35% at December 31, 2019

  • Book Value and Tangible Book Value Per Common Share Increased 9% and 11% to $43.88 and $38.78 per Common Share, Respectively in 2020

LAKEVILLE, Conn., Jan. 27, 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 fourth quarter ended December 31, 2020.

The record results for 2020 reflected an increase in income available to common shareholders to $11.8 million, or $4.21 per basic common share, compared with $11.0 million, or $3.95 per basic common share in 2019.

Net income allocated to common shareholders was $2.8 million, or $0.99 per basic common share, for the quarter ended December 31, 2020 (fourth quarter 2020), compared with $4.3 million, or $1.53 per common share (basic), for the third quarter ended September 30, 2020 (third quarter 2020), and $3.0 million, or $1.06 per basic common share, for the fourth quarter ended December 31, 2019 (fourth quarter 2019). Results for fourth quarter 2020 included a loan loss provision of $840 thousand compared to $686 thousand in third quarter 2020 and $417 thousand in fourth quarter 2019.

Salisbury’s President and Chief Executive Officer, Richard J. Cantele, Jr., stated, “2020 was a challenging year for many in the communities in which we operate. I am extremely proud of the resiliency of our employees who navigated the pandemic to provide outstanding service to our customers. During 2020, we processed $100 million of loan applications under the Paycheck Protection Program (“PPP”) in support of our customers and local communities and we worked with our commercial and residential customers to address their needs for temporary payment deferrals in response to the COVID-19 pandemic. I am pleased that as of year-end, there are no outstanding residential or consumer loans on deferral and only fifteen commercial loans remain in some sort of deferral. We reported record earnings for the year as a result of the dedication and hard work of our employees as we experienced record volume in our residential lending business. Unfortunately, COVID-19 will continue to challenge us in 2021. As we enter the new year, we remain focused on providing outstanding customer service and supporting our local communities while prudently growing the bank and enhancing profitability.”

Net-Interest and Dividend Income

Tax equivalent net interest income of $10.0 million for the fourth quarter 2020 decreased $108 thousand, or 1.1%, versus third quarter 2020, and increased $1.2 million, or 13.1%, versus fourth quarter 2019. Tax equivalent interest income of $10.9 million for fourth quarter 2020 decreased $232 thousand, or 2.1%, versus third quarter 2020 and was essentially unchanged compared to fourth quarter 2019. Fourth quarter 2020 interest income included PPP fees and interest of $855 thousand compared with $651 thousand in third quarter 2020. The cost of interest bearing liabilities of $1.0 million for fourth quarter 2020 decreased $124 thousand, or 11.5%, compared to third quarter 2020 and declined $1.1 million, or 53.3% from fourth quarter 2019.

Average earning assets of $1.3 billion for fourth quarter 2020 increased $31.0 million, or 2.5%, versus third quarter 2020, and increased $198.7 million, or 18.9%, versus fourth quarter 2019. Average earning assets for fourth quarter 2020 included average PPP loan balances of $93.4 million, net of deferred fees. Average total interest bearing liabilities of $0.9 billion for fourth quarter 2020 increased $30.1 million, or 3.6%, versus third quarter 2020 and increased $116.9 million, or 15.6%, versus fourth quarter 2019. The increase from fourth quarter 2019 primarily reflected the funding of PPP loans.

The tax equivalent net interest margin for the fourth quarter 2020 was 3.17% compared with 3.29% for the third quarter 2020 and 3.34% for the fourth quarter 2019. See SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income on pages 8-9 of this release for additional details.

Non-Interest Income

Non-interest income of $2.5 million for fourth quarter 2020 decreased $810 thousand compared with third quarter 2020 and increased $57 thousand compared to fourth quarter 2019. Non-interest income for third quarter 2020 included a non-recurring non-taxable BOLI gain of $601 thousand due to the death of a covered former employee.

Trust and Wealth Advisory fees of $1.1 million were essentially unchanged compared to third quarter 2020 and up slightly from fourth quarter 2019. Assets under administration were $944.3 million as of December 31, 2020 compared with $748.2 million at September 30, 2020 and $777.5 million as of December 31, 2019. Discretionary assets under administration of $555.0 million in fourth quarter 2020 increased from $515.0 million in third quarter 2020 and $498.7 million in fourth quarter 2019. The growth from prior quarters primarily reflected higher market valuations. Non-discretionary assets under administration were $389.4 million as of fourth quarter 2020 compared with $233.2 million in third quarter 2020 and $278.8 million in fourth quarter 2019. The increase from prior quarters primarily reflected higher valuations and net new business activity. The trust and wealth business records nominal annual fees on non-discretionary assets under administration.

Service charges and fees of $858 thousand for fourth quarter 2020 increased $147 thousand versus third quarter 2020 and decreased $234 thousand versus fourth quarter 2019. The increase from third quarter 2020 was primarily due to the reinstatement of deposit fees in late fourth quarter 2020 whereas the decline from fourth quarter 2019 reflected higher deposit fees in the prior year quarter. To help support the financial needs of our customers and the communities in our markets, the Bank waived approximately $200 thousand and $754 thousand of deposit and transaction fees in the fourth quarter and the twelve month period ended December 31, 2020, respectively.

Income from sales and servicing of mortgage loans of $439 thousand in fourth quarter 2020 decreased $297 thousand versus third quarter 2020 and increased $297 thousand from fourth quarter 2019. Mortgage loans of $10.5 million were sold during the fourth quarter 2020 compared with sales of $26.6 million for third quarter 2020 and $3.6 million in fourth quarter 2019.

Non-Interest Expense

Non-interest expense of $8.1 million for fourth quarter 2020 increased $0.8 million versus third quarter 2020 and increased $1.0 million versus fourth quarter 2019. Compensation expense of $4.7 million for fourth quarter 2020 increased $0.6 million from third quarter 2020 and increased $0.7 million versus fourth quarter 2019. The increase from third quarter 2020 and fourth quarter 2019 primarily reflected higher salary expense and incentive compensation as well as higher production accruals, which were driven by increased loan origination volume. Compensation expense for fourth quarter 2019 included a one-time reduction of $328 thousand due to the modification of key terms of agreements related to BOLI policies.

Excluding compensation, other non-interest expenses of $3.3 million for fourth quarter 2020 increased $228 thousand from third quarter 2020 and increased $263 thousand from fourth quarter 2019. The increase from third quarter 2020 primarily reflected higher premises and equipment and professional fees. The increase from fourth quarter 2019 primarily reflected higher professional fees as well as an FDIC assessment credit recorded in the prior year fourth quarter.

The effective income tax rates for fourth quarter 2020, third quarter 2020 and fourth quarter 2019 were 17.5%, 17.3% and 16.1%, respectively. The tax rate in third quarter 2020 and fourth quarter 2019 primarily reflected the non-taxable BOLI proceeds and non-taxable compensation credit related to BOLI recorded in those respective periods.

Full Year Results

Full year 2020 net income available to common shareholders was $11.8 million, or $4.21 per basic common share, compared with $11.0 million, or $3.95 per basic common share for full year 2019. Results for full year 2020 included a loan loss provision of $5.0 million compared with $1.0 million for full year 2019.

Tax equivalent net interest income of $38.8 million for 2020 increased $4.1 million, or 11.9%, from $34.7 million in 2019. Average earning assets of $1.2 billion increased $120.3 million, or 11.4%, from 2019 and average total interest bearing liabilities of $821.1 million increased $51.3 million, or 6.7%, from $769.8 million in 2019. The tax equivalent net interest margin for 2020 was 3.28% compared with 3.27% for 2019.

Non-interest income of $10.3 million for 2020 increased $1.0 million from 2019. The increase primarily reflected higher gains on the sale and servicing of mortgage loans and non-recurring BOLI gains, which were offset by waived deposit fees. Mortgage loans of $59.8 million were sold during full year 2020 compared with sales of $6.4 million for full year 2019.

The effective tax rate for 2020 was 17.0% compared with 17.5% for 2019. The tax rate for 2020 and 2019 reflected the non-taxable BOLI proceeds received and the BOLI compensation credit recorded in those respective periods.

Loans

Gross loans outstanding as of December 31, 2020 of $1.0 billion included net PPP loans of $84.9 million, which are categorized as commercial & industrial loans in the below table. Excluding PPP loans, gross loans receivable were $956.5 million at December 31, 2020, compared with $947.0 million at September 30, 2020, and $936.3 million at December 31, 2019. Including PPP loans, the ratio of gross loans to deposits for fourth quarter 2020 was 92.2% compared with 95.4% for third quarter 2020 and 101.8% for fourth quarter 2019. Balances by loan type for the comparative periods were as follows:

Loan Type

Q4 2020

Q3 2020

Q4 2019

Residential Real Estate

$

425,677

$

429,221

$

427,441

Commercial Real Estate

342,563

333,412

298,261

Commercial & Industrial

227,148

237,448

169,411

Farm Land

3,198

3,295

3,641

Vacant Land

14,079

13,694

7,893

Municipal

21,512

20,797

21,914

Consumer

7,687

7,686

6,385

Deferred (Fees) Costs

(372

)

(959

)

1,362

Gross Loans Receivable

$

1,041,492

$

1,044,594

$

936,308

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 December 31, 2020, loan payments were deferred on 15 commercial loans ($30 million loan balance). There were no outstanding deferrals related to residential and consumer loans as of December 31, 2020.

Non-performing assets increased $1.0 million during fourth quarter 2020 to $5.6 million, or 0.44% of total assets at December 31, 2020, from $4.7 million, or 0.36% of total assets at September 30, 2020, and increased $1.7 million from $3.9 million, or 0.35% of total assets, at December 31, 2019. The increase from third quarter 2020 was primarily driven by one commercial loan for which Salisbury is no longer accruing interest.

The amount of total impaired and potential problem loans increased $3.3 million during the fourth quarter 2020 to $30.1 million, or 2.89% of gross loans receivable, at December 31, 2020 compared to $26.8 million, or 2.55% of gross loans receivable, at September 30, 2020, and increased $8.8 million from $21.3 million, or 2.27% of gross loans receivable, at December 31, 2019. The increase from third quarter 2020 primarily related to one borrower in the hospitality industry whose business has been adversely affected by COVID-19. Salisbury is currently deferring loan payments for this borrower.

Accruing loans receivable 30-to-89 days past due increased $5.2 million during fourth quarter 2020 to $6.9 million, or 0.66% of gross loans receivable, from $1.6 million, or 0.16% of gross loans receivable at September 30, 2020, and increased $4.8 million from $2.1 million, or 0.22% of gross loans receivable at December 31, 2019. The increase from third quarter 2020 included loans of $2.7 million that matured in fourth quarter 2020, most of which are expected to renew in first quarter 2021.

The allowance for loan losses at December 31, 2020 was $13.8 million compared with $13.0 million at September 30, 2020 and $8.9 million at December 31, 2019. The provision for loan losses expense was $0.8 million for fourth quarter 2020 versus $0.7 million for third quarter 2020, and $0.4 million for fourth quarter 2019. The provision for fourth quarter reflected management’s assessment of the impact of the COVID-19 pandemic on certain qualitative and environmental factors and impaired loans. Net loan charge-offs were $87 thousand for the fourth quarter 2020, $56 thousand for third quarter 2020 and $368 thousand for the fourth quarter 2019. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, was 1.32% for the fourth quarter 2020, versus 1.24% for third quarter 2020 and 0.95% for fourth quarter 2019. Excluding PPP loans and deferred net fees, the ratio of the allowance for loan losses to gross loans was 1.44% for fourth quarter 2020 compared with 1.37% for third 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 of $1.1 billion at December 31, 2020 increased $33.9 million from September 30, 2020 and increased $209.6 million from December 31, 2019. Deposits at December 31, 2020 included brokered deposits, including CDARS one-way buys, of $18.0 million compared with $18.0 million at September 30, 2020 and $2.9 million at December 31, 2019. Average total deposits for fourth quarter 2020 were $1.1 billion compared with $1.1 billion at September 30, 2020 and $932.4 million at December 31, 2019. Average total deposits for fourth quarter 2020 included average brokered deposits of $18.0 million compared with $24.9 million for third quarter 2020 and $22.1 million for fourth quarter 2019.

FHLB advances of $12.6 million at December 31, 2020 decreased $31.2 million from September 30, 2020 and decreased $38.2 million from December 31, 2019. Salisbury’s excess borrowing capacity at FHLBB was approximately $255 million at December 31, 2020.

Capital

Book value per common share increased $0.89 during the fourth quarter 2020 to $43.88 per share and increased $3.66 from the fourth quarter 2019. Tangible book value per common share increased $0.91 during fourth quarter 2020 to $38.78 and increased $3.80 from the fourth quarter 2019.

Shareholders’ equity increased $2.5 million in fourth quarter 2020 to $124.8 million at December 31, 2020 as net income of $2.8 million, unrealized gains in the Available-For-Sale portfolio of $0.3 million, and the issuance of restricted stock awards of $0.2 million were 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 December 31, 2020, the Bank’s Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 8.90%, 13.57%, and 12.31%, respectively, compared with regulatory “well capitalized” minimums of 5.00%, 10.00%, and 6.5%, respectively.

Dividends on Common Shares

The Board of Directors of Salisbury declared a $0.29 per common share quarterly cash dividend at its January 27, 2021 meeting. The dividend will be paid on February 26, 2021 to shareholders of record as of February 12, 2021.

Background

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

Forward-Looking Statements

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

Investor presentation slides, which include a review of financial results and trends through the period ended December 31, 2020, are available in the Shareholder Relations section of Salisbury’s website at salisburybank.com under Shareholder Relations/News & Market Information/Presentations simultaneously with this Release.


Salisbury Bancorp, Inc. and Subsidiary
CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except share data)

December 31, 2020

December 31, 2019

ASSETS

(unaudited)

Cash and due from banks

$

10,599

$

7,406

Interest bearing demand deposits with other banks

82,563

19,479

Total cash and cash equivalents

93,162

26,885

Interest bearing Time Deposits with Financial Institutions

750

750

Securities

Available-for-sale at fair value

98,411

91,801

CRA mutual fund at fair value

917

882

Federal Home Loan Bank of Boston stock at cost

1,713

3,242

Loans held-for-sale

2,735

332

Loans receivable, net (allowance for loan losses: $13,754 and $8,895)

1,027,738

927,413

Other real estate owned

-

314

Bank premises and equipment, net

20,355

17,385

Goodwill

13,815

13,815

Intangible assets (net of accumulated amortization: $5,206 and $4,884)

674

995

Accrued interest receivable

6,373

3,415

Cash surrender value of life insurance policies

21,182

20,580

Deferred taxes

2,412

1,249

Other assets

3,423

3,155

Total Assets

$

1,293,660

$

1,112,448

LIABILITIES and SHAREHOLDERS' EQUITY

Deposits

Demand (non-interest bearing)

$

310,769

$

237,852

Demand (interest bearing)

218,869

153,314

Money market

278,146

239,504

Savings and other

189,776

161,112

Certificates of deposit

131,514

127,724

Total deposits

1,129,074

919,506

Repurchase agreements

7,116

8,530

Federal Home Loan Bank of Boston advances

12,639

50,887

Subordinated debt

9,883

9,859

Note payable

208

246

Finance lease obligations

1,673

1,718

Accrued interest and other liabilities

8,315

8,047

Total Liabilities

1,168,908

998,793

Shareholders' Equity

Common stock - $0.10 per share par value

Authorized: 5,000,000

Issued: 2,843,292 and 2,825,912

Outstanding: 2,843,292 and 2,825,912

284

283

Unearned compensation - restricted stock awards

(774

)

(795

)

Paid-in capital

45,266

44,490

Retained earnings

76,972

68,320

Accumulated other comprehensive income, net

3,004

1,357

Total Shareholders' Equity

124,752

113,655

Total Liabilities and Shareholders' Equity

$

1,293,660

$

1,112,448


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

Three months ended

Twelve months ended

Periods ended December 31, (in thousands except share data)

2020

2019

2020

2019

Interest and dividend income

Interest and fees on loans

$

10,135

$

9,883

$

40,796

$

39,742

Interest on debt securities

Taxable

411

490

1,671

2,223

Tax exempt

159

190

672

545

Other interest and dividends

65

142

295

903

Total interest and dividend income

10,770

10,705

43,434

43,413

Interest expense

Deposits

629

1,650

3,890

7,324

Repurchase agreements

3

8

20

24

Finance lease

35

36

141

170

Note payable

3

4

14

16

Subordinated debt

150

156

618

624

Federal Home Loan Bank of Boston advances

133

186

605

1,143

Total interest expense

953

2,040

5,288

9,301

Net interest and dividend income

9,817

8,665

38,146

34,112

Provision for loan losses

840

417

5,038

955

Net interest and dividend income after provision for loan losses

8,977

8,248

33,108

33,157

Non-interest income

Trust and wealth advisory

1,066

1,022

4,194

3,995

Service charges and fees

858

1,092

3,072

4,028

Gains on sales of mortgage loans, net

422

67

1,442

116

Mortgage servicing, net

17

75

179

307

(Losses) gains on CRA mutual fund

(3

)

(4

)

19

25

(Losses) gains on available-for-sale securities, net

(21

)

-

196

263

BOLI income and gains

110

139

1,096

392

Other

27

28

125

124

Total non-interest income

2,476

2,419

10,323

9,250

Non-interest expense

Salaries

3,453

3,055

11,828

12,048

Employee benefits

1,289

976

4,533

4,384

Premises and equipment

1,122

1,066

4,019

4,016

Data processing

544

581

2,211

2,201

Professional fees

721

523

2,741

2,213

OREO gains, losses and write-downs, net

-

3

-

408

Collections and other real estate owned

111

108

323

436

FDIC insurance

135

(33

)

466

261

Marketing and community support

154

171

573

619

Amortization of intangibles

74

91

321

388

Other

451

539

2,023

1,938

Total non-interest expense

8,054

7,080

29,038

28,912

Income before income taxes

3,399

3,587

14,393

13,495

Income tax provision

596

578

2,453

2,359

Net income

$

2,803

$

3,009

$

11,940

$

11,136

Net income available to common stock

$

2,764

$

2,960

$

11,775

$

10,976

Basic earnings per common share

$

0.99

$

1.06

$

4.21

$

3.95

Diluted earnings per common share

$

0.98

$

1.06

$

4.20

$

3.93

Common dividends per share

$

0.29

$

0.28

$

1.16

$

1.12


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

At or for the quarters ended

(in thousands, except per share amounts and ratios)

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Q4 2019

Total assets

$

1,293,660

$

1,292,760

$

1,287,137

$

1,145,751

$

1,112,448

Loans receivable, net

1,027,738

1,031,593

1,039,524

949,142

927,413

Total securities

101,043

99,794

93,717

94,966

95,924

Deposits

1,129,074

1,095,141

1,085,599

965,620

919,506

FHLBB advances

12,639

43,880

55,118

40,932

50,887

Shareholders’ equity

124,752

122,240

118,444

116,143

113,655

Wealth assets under administration

944,349

748,188

704,052

639,457

777,503

Discretionary wealth assets under administration

554,997

514,988

480,456

425,359

498,737

Non-discretionary wealth assets under administration

389,352

233,200

223,596

214,098

278,766

Non-performing loans

5,648

4,681

4,815

3,188

3,621

Non-performing assets

5,648

4,681

4,815

3,188

3,934

Accruing loans past due 30-89 days

6,850

1,638

2,656

6,109

2,077

Net interest and dividend income

9,817

9,925

9,617

8,787

8,665

Net interest and dividend income, tax equivalent(1)

9,993

10,101

9,786

8,954

8,839

Provision for loan losses

840

686

1,806

1,706

417

Non-interest income

2,476

3,286

2,316

2,245

2,419

Non-interest expense

8,054

7,259

6,789

6,936

7,080

Income before income taxes

3,399

5,266

3,338

2,390

3,587

Income tax provision

596

910

604

343

578

Net income

2,803

4,356

2,734

2,047

3,009

Net income allocated to common shareholders

2,764

4,288

2,691

2,013

2,960

Per share data

Basic earnings per common share

$

0.99

$

1.53

$

0.96

$

0.72

$

1.06

Diluted earnings per common share

0.98

1.53

0.96

0.72

1.06

Dividends per common share

0.29

0.29

0.29

0.29

0.28

Book value per common share

43.88

42.99

41.66

41.05

40.22

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

38.78

37.87

36.51

35.85

34.98

Common shares outstanding at end of period (in thousands)

2,843

2,843

2,843

2,829

2,826

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

2,803

2,799

2,796

2,788

2,781

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

2,811

2,807

2,803

2,797

2,794

Profitability ratios

Net interest margin (tax equivalent) (1)

3.17

%

3.29

%

3.31

%

3.35

%

3.34

%

Efficiency ratio (3)

63.88

56.33

56.23

61.36

61.81

Effective income tax rate

17.52

17.28

18.11

14.35

16.11

Return on average assets

0.85

1.34

0.89

0.73

1.07

Return on average common shareholders’ equity

8.97

14.31

9.36

7.07

10.56

Credit quality ratios

Non-performing loans to loans receivable, gross

0.54

%

0.45

%

0.46

%

0.33

%

0.39

%

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

0.66

0.16

0.25

0.64

0.22

Allowance for loan losses to loans receivable, gross

1.32

1.24

1.18

1.11

0.95

Allowance for loan losses to non-performing loans

243.5

277.8

256.9

333.0

245.64

Non-performing assets to total assets

0.44

0.36

0.37

0.28

0.35

Capital ratios

Common shareholders' equity to assets

9.64

%

9.46

%

9.20

%

10.14

%

10.22

%

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

8.62

8.42

8.16

8.97

9.01

Tier 1 leverage capital (4)

8.90

8.93

8.95

9.65

9.60

Total risk-based capital (4)

13.57

13.60

13.15

12.97

12.84

Common equity tier 1 capital (4)

12.31

12.35

11.90

11.79

11.83

(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)

Q4 2020

Q3 2020

Q2 2020

Q1 2020

Q4 2019

Common Shareholders' Equity

$

124,752

$

122,240

$

118,444

$

116,143

$

113,655

Less: Goodwill

(13,815

)

(13,815

)

(13,815

)

(13,815

)

(13,815

)

Less: Intangible assets

(674

)

(748

)

(825

)

(908

)

(995

)

Tangible Common Shareholders' Equity

$

110,263

$

107,677

$

103,804

$

101,420

$

98,845

Total Assets

$

1,293,660

$

1,292,760

$

1,287,137

$

1,145,751

$

1,112,448

Less: Goodwill

(13,815

)

(13,815

)

(13,815

)

(13,815

)

(13,815

)

Less: Intangible assets

(674

)

(748

)

(825

)

(908

)

(995

)

Tangible Total Assets

$

1,279,171

$

1,278,197

$

1,272,497

$

1,131,028

$

1,097,638

Common Shares outstanding

2,843

2,843

2,843

2,829

2,826

Book value per Common Share – GAAP

$

43.88

$

42.99

$

41.66

$

41.05

$

40.22

Tangible book value per Common Share - Non-GAAP

38.78

37.87

36.51

35.85

34.98

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

8.62

%

8.42

%

8.16

%

8.97

%

9.01

%

Consolidated:

Non-interest expense

$

8,054

$

7,259

$

6,789

$

6,936

$

7,080

Less: Amortization of core deposit intangibles

(74

)

(78

)

(83

)

(87

)

(91

)

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

-

2

(7

)

13

(27

)

Adjusted non-interest expense

$

7,980

$

7,183

$

6,699

$

6,862

$

6,962

Net interest and dividend income, tax equivalent

$

9,993

$

10,101

$

9,786

$

8,955

$

8,839

Non-interest income

2,476

3,286

2,316

2,245

2,419

Losses (gains) on securities

24

(34

)

(188

)

(15

)

4

BOLI proceeds

-

(601

)

-

-

-

Adjusted revenue

$

12,493

$

12,752

$

11,914

$

11,185

$

11,262

Efficiency Ratio – Non-GAAP 1

63.88

%

56.33

%

56.23

%

61.36

%

61.81

%

1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q4 2020: 62.62%; Q3 2020: 54.76%; Q2 2020: 54.29%; Q1 2020: 59.83%; Q4 2019: 60.19%. If Q4 2020 results were normalized to exclude the impact of the COVID-19 pandemic, revenue would be adjusted to include waived deposit fees of $196 thousand and exclude PPP loan interest and fee income of $239 thousand and $615 thousand, respectively. The resulting normalized efficiency ratio for Q4 2020 would have been 67.44% or 66.82%, excluding trust & wealth advisory.


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

At or for the quarters ended

Average Balance

Income / Expense

Average Yield / Rate

(dollars in thousands)

Q4 2020

Q3 2020

Q4 2019

Q4 2020

Q3 2020

Q4 2019

Q4 2020

Q3 2020

Q4 2019

Loans (a)(d)

$

1,043,613

$

1,049,313

$

928,787

$

10,257

$

10,485

$

9,998

3.90

%

3.97

%

4.31

%

Securities (c)(d)

92,633

89,220

92,626

624

606

739

2.70

2.72

3.19

FHLBB stock

2,594

3,440

2,695

34

34

44

5.28

3.96

6.53

Short term funds (b)

112,463

78,306

28,474

31

53

98

0.11

0.27

1.38

Total earning assets

1,251,303

1,220,279

1,052,582

10,946

11,178

10,879

3.48

3.64

4.13

Other assets

63,937

64,943

62,458

Total assets

$

1,315,240

$

1,285,222

$

1,115,040

Interest-bearing demand deposits

$

212,375

$

195,253

$

157,180

110

110

144

0.21

0.22

0.37

Money market accounts

288,629

258,257

236,335

150

195

601

0.21

0.30

1.02

Savings and other

188,080

176,963

166,516

59

69

288

0.12

0.15

0.69

Certificates of deposit

130,809

135,238

144,678

310

390

617

0.94

1.15

1.71

Total interest-bearing deposits

819,893

765,711

704,709

629

764

1,650

0.31

0.40

0.94

Repurchase agreements

9,220

12,218

6,246

3

6

8

0.15

0.20

0.51

Capital lease

2,897

2,928

3,109

35

35

36

4.81

4.80

4.63

Note payable

212

221

249

3

3

4

6.10

6.08

6.43

Subordinated debt (f)

9,879

9,872

9,854

150

156

156

6.06

6.32

6.33

FHLBB advances

23,491

44,522

24,549

133

113

186

2.21

0.99

3.03

Total interest-bearing liabilities

865,592

835,472

748,716

953

1,077

2,040

0.44

0.51

1.09

Demand deposits

318,370

321,392

246,175

Other liabilities

7,267

7,592

7,109

Shareholders’ equity

124,011

120,766

113,040

Total liabilities & shareholders’ equity

$

1,315,240

$

1,285,222

$

1,115,040

Net interest income

$

9,993

$

10,101

$

8,839

Spread on interest-bearing funds

3.04

3.13

3.04

Net interest margin (e)

3.17

3.29

3.34


(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 $176,000, $176,000 and $174,000, respectively, for Q4 2020, Q3 2020 and Q4 2019 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2020 and 2019.

(e)

Net interest income divided by average interest-earning assets.

(f)

Net of issuance costs.


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

Twelve months ended December 31,

Average Balance

Income / Expense

Average Yield / Rate

(dollars in thousands)

2020

2019

2020

2019

2020

2019

Loans (a)(d)

$

1,019,999

$

922,906

$

41,267

$

40,176

4.02

%

4.35

%

Securities (c)(d)

89,616

96,150

2,563

2,940

2.86

3.06

FHLBB stock

3,163

3,287

141

227

4.45

6.91

Short term funds (b)

65,935

36,109

154

675

0.23

1.87

Total earning assets

1,178,713

1,058,452

44,125

44,018

3.73

4.16

Other assets

63,434

58,204

Total assets

$

1,242,147

$

1,116,656

Interest-bearing demand deposits

$

183,870

$

155,463

441

602

0.24

0.39

Money market accounts

256,402

222,090

1,145

2,333

0.45

1.05

Savings and other

175,204

175,011

464

1,517

0.26

0.87

Certificates of deposit

144,489

159,862

1,840

2,872

1.27

1.80

Total interest-bearing deposits

759,965

712,426

3,890

7,324

0.51

1.03

Repurchase agreements

7,986

4,913

20

24

0.25

0.49

Capital lease

2,965

4,010

141

170

4.75

4.24

Note payable

226

262

14

16

6.08

6.11

Subordinated debt (net of issuance costs)

9,870

9,847

618

624

6.26

6.34

FHLBB advances

40,093

38,303

605

1,143

1.49

2.98

Total interest-bearing liabilities

821,105

769,761

5,288

9,301

0.64

1.21

Demand deposits

294,588

231,221

Other liabilities

6,956

6,699

Shareholders’ equity

119,498

108,975

Total liabilities & shareholders’ equity

$

1,242,147

$

1,116,656

Net interest income

$

38,837

$

34,718

Spread on interest-bearing funds

3.09

2.95

Net interest margin (e)

3.28

3.27


(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 $690,000 and $605,000, respectively for 2020 and 2019 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2020 and 2019.

(e)

Net interest income divided by average interest-earning assets

Source: Salisbury Bancorp, Inc.

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