Press Release

Salisbury Bancorp, Inc. Reports Results For First Quarter 2020

Company Release - 4/27/2020 12:18 PM ET
  • First Quarter 2020 Net Income of $0.72 per Basic Common Share
  • Results Reflected a Loan Loss Provision of $1.7 Million Primarily Due to COVID-19 Virus
  • Common Equity Tier 1 and Total Capital Ratios of 11.79% and 12.97%, Respectively
  • Non-performing Assets were 0.28% of Total Assets Compared with 0.35% at December 31, 2019

LAKEVILLE, Conn., April 27, 2020 (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, 2020.

Net income available to common shareholders was $2.0 million, or $0.72 per common share (basic), for Salisbury’s first quarter ended March 31, 2020 (first quarter 2020), compared with $3.0 million, or $1.06 per common share (basic), for the fourth quarter ended December 31, 2019 (fourth quarter 2019), and $2.4 million, or $0.87 per common share (basic), for the first quarter ended March 31, 2019 (first quarter 2019). Results for the fourth quarter 2019 included a non-recurring non-taxable reduction in compensation expense of $328 thousand or $0.12 per common share (basic) related to a change in terms of agreements related to bank-owned life insurance policies (“BOLI”).

Salisbury’s President and Chief Executive Officer, Richard J. Cantele, Jr., stated, “These are unprecedented times as we deal with the health challenges and economic implications of the COVID-19 virus pandemic. The virus has disrupted our daily routines and it has forced us all to think and work differently. We proactively implemented a number of steps to protect our employees and our customers over the last several weeks, which included requiring many of our employees to work remotely or from different locations. Despite these operational challenges, we remain steadfast in our commitment to help our customers through this crisis. We have also waived deposit fees and implemented a loan payment deferral program for customers affected by the virus. In addition, thanks to the dedication and commitment of our employees, we also processed nearly 480 customer loan applications of nearly $86 million that were approved by the Small Business Administration during the initial round of the Paycheck Protection Program. While we hope that these disruptions will be short term in nature, no one can say for sure how long they will last. Salisbury Bank remains committed to providing outstanding customer service and supporting its local communities during this period of extreme angst and uncertainty.”

Impact of COVID-19 Virus Pandemic

To help support the financial needs of our customers and the communities in our markets, Salisbury waived various deposit and transaction related fees1 for the foreseeable future. Approximately $30 thousand of fees were waived in March 2020. Salisbury also implemented a loan payment deferral program which allows residential, commercial and consumer borrowers, who have been adversely affected by the virus, to defer loan payments for up to three months. As of March 31, 2020, 67 residential and consumer borrowers ($14 million of loan balances) and 111 commercial borrowers ($72 million of loan balances) have requested payment deferrals. The deterioration in economic conditions also contributed to a first quarter 2020 loan loss provision of $1.7 million, which is discussed herein under Asset Quality.

Net Interest and Dividend Income

Tax equivalent net interest and dividend income for the first quarter 2020 increased $115 thousand, or 1.3%, versus fourth quarter 2019, and increased $392 thousand, or 4.6%, versus first quarter 2019. First quarter 2020 average earning assets of $1.06 billion increased $11.3 million, or 1.1%, versus fourth quarter 2019, and increased $13.8 million, or 1.3%, versus first quarter 2019. Average earning assets earned 4.09% for first quarter 2020 compared with 4.13% in fourth quarter 2019 and 4.18% in first quarter 2019. Average total interest bearing deposits of $714.3 million increased $9.6 million, or 1.4%, versus fourth quarter 2019 and increased $14.1 million, or 2.0%, versus first quarter 2019. The cost of average interest-bearing liabilities was 1.00% for first quarter 2020 compared with 1.09% in fourth quarter 2019 and 1.24% in first quarter 2019. The tax equivalent net interest margin for first quarter 2020 was 3.35% compared with 3.34% for fourth quarter 2019 and 3.28% for first quarter 2019. See SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income on page 8 on this release for additional details.

Non-Interest Income

Non-interest income of $2.2 million for first quarter 2020 decreased $174 thousand versus fourth quarter 2019 and increased $218 thousand versus first quarter 2019.

Trust and Wealth Advisory fees of $1.0 million for first quarter 2020 were essentially unchanged from fourth quarter 2019 and increased $124 thousand versus first quarter 2019. The increase from first quarter 2019 primarily reflected higher asset-based fees. Assets under administration were $639.5 million at March 31, 2020 compared with $777.5 million at December 31, 2019 and $691.7 million at March 31, 2019. Discretionary assets under administration of $425.4 million in first quarter 2020 declined from $498.7 million in fourth quarter 2019 and $444.1 million in first quarter 2019 primarily due to lower market valuations. Non-discretionary assets under administration of $214.1 million in first quarter 2020 declined from $278.8 million in fourth quarter 2019 and $247.6 million in first quarter 2019 due to a lower valuation of shares in a partnership for one significant 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 2020 decreased $188 thousand versus fourth quarter 2019 and decreased $15 thousand versus first quarter 2019. The decrease from fourth quarter 2019 and first quarter 2019 primarily reflected lower loan prepayment penalties as well as lower interchange and deposit-related fees. Income from mortgage sales and servicing decreased $14 thousand versus fourth quarter 2019 and increased $45 thousand versus first quarter 2019. The increase from the first quarter 2019 reflected higher gains on mortgage sales, due to an increase in volume.

Non-interest income for the first quarter 2020 included BOLI income of $133 thousand compared to $139 thousand in fourth quarter 2019 and $79 thousand in first quarter 2019.

Non-Interest Expense

Non-interest expense of $6.9 million for first quarter 2020 decreased $144 thousand versus fourth quarter 2019 and decreased $275 thousand versus first quarter 2019. Compensation expense of $4.0 million for first quarter 2020 decreased $34 thousand from fourth quarter 2019 and decreased $182 thousand versus first quarter 2019. The decline from fourth quarter 2019 primarily reflected lower salaries, production and incentive accruals, which were partly offset by higher employee benefit costs. The fourth quarter 2019 included a one-time reduction of $328 thousand to BOLI related benefits costs related to substantive modifications to key terms of those agreements. The higher benefits costs were partly offset by lower deferred compensation accruals. The reduction in compensation from first quarter 2019 primarily reflected lower salary expense and payroll taxes and higher deferred loan origination expenses.

Excluding compensation, other non-interest expenses for first quarter 2020 declined $108 thousand from fourth quarter 2019 and declined $93 thousand from first quarter 2019. The decline from fourth quarter 2019 primarily reflected lower premises and equipment costs which were partly offset by higher FDIC insurance costs due to an assessment credit of $120 thousand received in fourth quarter 2019. The decrease from first quarter 2019 primarily reflected higher OREO losses and related carrying costs in the comparative prior year quarter.

The effective income tax rates for first quarter 2020, fourth quarter 2019 and first quarter 2019 were 14.4%, 16.1% and 17.8%, respectively. The lower tax rate in first quarter 2020 primarily reflected the effect of tax-exempt income from municipal bonds, tax advantaged loans and bank-owned life insurance on a comparatively lower level of pre-tax income.

Loans

Gross loans receivable increased $23.5 million during first quarter 2020 to $959.8 million at March 31, 2020, compared with $936.3 million at December 31, 2019, and increased $39.9 million from $919.9 million at March 31, 2019. The ratio of gross loans to deposits for first quarter 2020 was 99.4% compared with 101.8% for fourth quarter 2019 and 97.7% for first quarter 2019. Balances by loan type for the comparative periods were as follows:

Loan Type Q1 2020 Q4 2019  Q1 2019
Residential Real Estate $432,241 $427,441  $418,078
Commercial Real Estate  321,358  298,261   300,626
Commercial & Industrial  157,573  169,411   167,503
Farm Land  3,612  3,641   4,155
Vacant Land  14,488  7,893   8,164
Municipal  20,964  21,914   15,702
Consumer  8,195  6,385   4,377
Deferred Fees  1,329  1,362   1,333
Gross Loans Receivable $959,760 $936,308  $919,938

Asset Quality

Non-performing assets decreased $0.7 million during the first quarter to $3.2 million, or 0.28% of total assets at March 31, 2020, from $3.9 million, or 0.35% of total assets at December 31, 2019, and decreased $3.9 million from $7.1 million, or 0.64% of total assets, at March 31, 2019.    

The amount of total impaired and potential problem loans was $28.1 million or 2.93% of gross loans receivable at March 31, 2020 compared to $21.3 million, or 2.27% of gross loans receivable at December 31, 2019 and $22.9 million, or 2.49% of gross loans receivable at March 31, 2019.

Accruing loans receivable 30-to-89 days past due increased $4.1 million during first quarter 2020 to $6.2 million, or 0.64% of gross loans receivable, from $2.1 million, or 0.22% of gross loans receivable at December 31, 2019, and increased $4.0 million from $2.2 million, or 0.24% of gross loans receivable at March 31, 2019.

The allowance for loan losses for first quarter 2020 was $10.6 million compared with $8.9 million for fourth quarter 2019 and $8.8 million for first quarter 2019.The provision for loan loss expense was $1.7 million for first quarter 2020 versus $417 thousand for fourth quarter 2019, and $294 thousand for the first quarter 2019. The increase in the provision versus comparative periods reflected management’s assessment of the impact of the COVID-19 pandemic on certain qualitative and environmental factors and impaired loans as well as loan growth during the first quarter 2020. Net loan (recoveries) charge-offs were ($17) thousand for the first quarter 2020, $368 thousand for fourth quarter 2019 and $38 thousand for the first quarter 2019. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, was 1.11% for the first quarter 2020, versus 0.95% for the fourth quarter 2019 and 0.95% for the first quarter 2019. Similarly, reserve coverage, as measured by the ratio of the allowance for loan losses to non-performing loans was 333% for the first quarter 2020, versus 246% for fourth quarter 2019 and 137% for first quarter 2019.

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

Deposits and Borrowings

Deposits were $965.6 million at March 31, 2020 compared with $919.5 million at December 31, 2019 and $942.0 million at March 31, 2019. The increase in deposits from fourth quarter 2019 of $46.1 million reflected additional brokered deposits of $53.0 million partly offset by normal seasonal customer activity. Deposits at March 31, 2020 reflected brokered deposits, including CDARS one-way buys, of $58.2 million compared with $2.9 million at December 31, 2019 and $49.7 million at March 31, 2019. Average total deposits for the first quarter 2020 were $949.4 million compared with $950.9 million for the fourth quarter 2019 and $918.8 million for the first quarter 2019.  Average total deposits for the first quarter 2020 included average brokered deposits of $33.3 million compared with $22.1 million for fourth quarter 2019 and $42.2 million for first quarter 2019.

Federal Home Loan Bank of Boston (FHLBB) advances decreased $10.0 million during the quarter to $40.9 million at March 31, 2020 and decreased $6.8 million from March 31, 2019. Salisbury’s excess borrowing capacity at FHLBB was approximately $243 million at March 31, 2020.

Capital

Book value per common share increased $0.83 during the first quarter 2020 to $41.05 per share and increased $3.24 from the first quarter 2019. Tangible book value per common share increased $0.87 during first quarter 2020 to $35.85 and increased $3.42 as compared to the first quarter 2019.

Shareholders’ equity increased $2.4 million in first quarter to $116.1 million at March 31, 2020 as net income of $2.0 million, unrealized gains in the available-for-sale securities portfolio of $1.0 million and restricted stock activity 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 March 31, 2020, the Bank’s Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 9.65%, 12.97%, and 11.79%, respectively, compared with regulatory “well capitalized” minimums of 5.00%, 10.00%, and 6.5%, respectively.

Dividend on Common Shares

The Board of Directors of Salisbury declared a $0.29 per common share quarterly cash dividend at their April 27, 2020 meeting. Such dividend will be paid on May 29, 2020 to shareholders of record as of May 15, 2020.

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, 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 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, 2020December 31, 2019
ASSETS  
Cash and due from banks$  6,597 $  7,406 
Interest bearing demand deposits with other banks   32,665    19,479 
Total cash and cash equivalents   39,262    26,885 
Interest bearing Time Deposits with Financial Institutions   750  750 
Securities  
Available-for-sale at fair value   91,333    91,801 
CRA mutual fund at fair value   900    882 
Federal Home Loan Bank of Boston stock at cost   2,733    3,242 
Loans held-for-sale   580    332 
Loans receivable, net (allowance for loan losses: $10,618 and $8,895)   949,142    927,413 
Other real estate owned   -    314 
Bank premises and equipment, net   17,535    17,385 
Goodwill   13,815    13,815 
Intangible assets (net of accumulated amortization: $4,971 and $4,884)   908    995 
Accrued interest receivable   3,437    3,415 
Cash surrender value of life insurance policies   20,714    20,580 
Deferred taxes   1,174    1,249 
Other assets   3,468    3,390 
Total Assets$  1,145,751 $  1,112,448 
LIABILITIES and SHAREHOLDERS' EQUITY  
Deposits  
Demand (non-interest bearing)$  243,491 $  237,852 
Demand (interest bearing)   157,069    153,314 
Money market   222,746    239,504 
Savings and other   167,408    161,112 
Certificates of deposit   174,906    127,724 
Total deposits   965,620    919,506 
Repurchase agreements   4,929    8,530 
Federal Home Loan Bank of Boston advances   40,932    50,887 
Subordinated debt   9,865    9,859 
Note payable   237    246 
Finance lease obligations   1,707    1,718 
Accrued interest and other liabilities 6,318    8,047 
Total Liabilities   1,029,608    998,793 
Shareholders' Equity  
Common stock - $0.10 per share par value  
Authorized: 5,000,000;  
Issued: 2,829,017 and 2,825,912  
Outstanding: 2,829,017 and 2,825,912   283    283 
Unearned compensation – restricted stock awards    (659)   (795)
Paid-in capital   44,566    44,490 
Retained earnings   69,547    68,320 
Accumulated other comprehensive income, net   2,406    1,357 
Total Shareholders' Equity   116,143    113,655 
Total Liabilities and Shareholders' Equity$  1,145,751 $  1,112,448 


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

Periods ended March 31, (in thousands, except per share amounts) 2020 2019 
Interest and dividend income  
Interest and fees on loans$  9,987$  9,934 
Interest on debt securities  
  Taxable   455   621 
  Tax exempt   185   72 
Other interest and dividends   91   227 
  Total interest and dividend income   10,718   10,854 
Interest expense  
Deposits    1,509   1,796 
Repurchase agreements   7   3 
Finance lease   36   46 
Note payable   4   4 
Subordinated Debt   156   156 
Federal Home Loan Bank of Boston advances   219   412 
  Total interest expense   1,931   2,417 
Net interest and dividend income   8,787   8,437 
Provision for loan losses   1,706   294 
  Net interest and dividend income after provision for loan losses   7,081   8,143 
Non-interest income  
Trust and wealth advisory   1,030   906 
Service charges and fees   905   920 
Gains on sales of mortgage loans, net   61   7 
Mortgage servicing, net   67   76 
Gains on CRA mutual fund   14   11 
Gains (losses) on sales of available -for-sale- securities, net   1   (9)
BOLI income and gains   133 79 
Other    34   37 
  Total non-interest income   2,245   2,027 
Non-interest expense  
Salaries   2,850   2,993 
Employee benefits   1,146   1,185 
Premises and equipment   911   972 
Data processing   540   509 
Professional fees   628   535 
OREO gains, losses and write-downs, net   -    52 
Collections, OREO, and loan related   25   130 
FDIC insurance   105   163 
Marketing and community support   125   156 
Amortization of intangibles   87   104 
Other   519   412 
  Total non-interest expense   6,936   7,211 
Income before income taxes   2,390   2,959 
Income tax provision   343   525 
Net income$  2,047$  2,434 
Net income available to common shareholders$   2,013$  2,408 
   
Basic earnings per common share$  0.72$  0.87 
Diluted earnings per common share   0.72   0.86 
Common dividends per share   0.29   0.28 


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 2020Q4 2019Q3 2019Q2 2019Q1 2019
Total assets$1,145,751 $1,112,448 $1,144,240 $1,119,212 $1,118,925 
Loans receivable, net 949,142  927,413  915,083  910,573  911,188 
Total securities 94,966  95,925  98,270  103,857  102,479 
Deposits 965,620  919,506  966,178  950,723  941,969 
FHLBB advances 40,932  50,887  37,828  32,769  47,712 
Shareholders’ equity 116,143  113,655  111,580  108,948  106,109 
Wealth assets under administration 639,457  777,503  752,467  713,319  691,731 
  Discretionary wealth assets under administration 425,359  498,737  475,482  464,537  444,110 
  Non-discretionary wealth assets under administration 214,098  278,766  276,985  248,782  247,621 
Non-performing loans 3,188  3,621  5,370  5,062  6,389 
Non-performing assets 3,188  3,935  5,687  5,463  7,130 
Accruing loans past due 30-89 days 6,177  2,077  1,784  2,473  2,228 
Net interest and dividend income 8,787  8,665  8,667  8,344  8,437 
Net interest and dividend income, tax equivalent(1) 8,955  8,839  8,831  8,486  8,562 
Provision for loan losses 1,706  417  94  151  294 
Non-interest income 2,245  2,419  2,256  2,548  2,027 
Non-interest expense 6,936  7,080  7,184  7,439  7,211 
Income before income taxes 2,390  3,587  3,645  3,302  2,959 
Income tax provision 343  578  657  599  525 
Net income 2,047  3,009  2,988  2,703  2,434 
Net income allocated to common shareholders 2,013  2,960  2,940  2,671  2,408 
      
Per share data     
Basic earnings per common share$0.72 $1.06 $1.06 $0.96 $0.87 
Diluted earnings per common share 0.72  1.06  1.05  0.95  0.86 
Dividends per common share 0.29  0.28  0.28  0.28  0.28 
Book value per common share 41.05  40.22  39.52  38.59  37.81 
Tangible book value per common share - Non-GAAP ⁽2 35.85  34.98  34.24  33.28  32.43 
Common shares outstanding at end of period (in thousands) 2,829  2,826  2,823  2,823  2,807 
Weighted average common shares outstanding, to calculate basic earnings per share (in thousands)  2,788  2,781  2,783  2,780  2,777 
Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands)  2,797  2,794  2,795  2,793  2,789 
      
Profitability ratios     
Net interest margin (tax equivalent) (1) 3.35% 3.34% 3.29% 3.19% 3.28%
Efficiency ratio (3) 61.36  61.81  62.90  65.81  66.15 
Effective income tax rate 14.35  16.11  18.02  18.14  17.75 
Return on average assets 0.73  1.07  1.05  0.97  0.89 
Return on average common shareholders’ equity 7.07  10.56  10.73  10.07  9.45 
      
Credit quality ratios     
Non-performing loans to loans receivable, gross 0.33  0.39  0.58  0.55  0.69 
Accruing loans past due 30-89 days to loans receivable, gross 0.64  0.22  0.19  0.27  0.24 
Allowance for loan losses to loans receivable, gross 1.11  0.95  0.96  0.97  0.95 
Allowance for loan losses to non-performing loans 333.0  245.64  164.73  175.56  136.96 
Non-performing assets to total assets 0.28  0.35  0.50  0.49  0.64 
      
Capital ratios     
Common shareholders' equity to assets 10.14% 10.22% 9.75% 9.73% 9.48%
Tangible common shareholders' equity to tangible assets - Non-GAAP(2) 8.97  9.01  8.56  8.51  8.25 
Tier 1 leverage capital (4) 9.65  9.60  9.27  9.10  8.97 
Total risk-based capital (4) 12.97  12.84  12.58  12.57  12.35 
Common equity tier 1 capital (4) 11.79  11.83  11.57  11.54  11.33 

(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 2020Q4 2019Q3 2019Q2 2019
Q1 2019
      
Common Shareholders' Equity$116,143 $113,655 $111,580 $108,948 $106,108 
Less: Goodwill (13,815) (13,815) (13,815) (13,815) (13,815)
Less: Intangible assets (908) (995) (1,086) (1,180) (1,279)
Tangible Common Shareholders' Equity$  101,420 $  98,845 $96,679 $93,953 $91,014 
Total Assets$1,145,751 $1,112,448 $1,144,240 $1,119,212 $1,118,925 
Less: Goodwill (13,815) (13,815) (13,815) (13,815) (13,815)
Less: Intangible assets (908) (995) (1,086) (1,180) (1,279)
Tangible Total Assets$1,131,028 $1,097,638 $1,129,339 $1,104,217 $1,103,831 
Common Shares outstanding 2,829  2,826  2,823  2,823  2,807 
      
Book value per Common Share – GAAP$41.05 $40.22 $39.52 $38.59 $37.81 
Tangible book value per Common Share - Non-GAAP 35.85  34.98  34.24  33.28  32.43 
Tangible common shareholders’ equity to tangible total assets - Non-GAAP 8.97% 9.01% 8.56% 8.51% 8.25%
      
Consolidated:     
Non-interest expense$  6,936 $  7,080 $  7,184 $  7,438 $  7,211 
Less: Amortization of core deposit intangibles (87) (91) (93) (99) (104)
Less: Foreclosed property expense including OREO gains, losses and
Write downs
 13  (27) (115) (271) (103)
Adjusted non-interest expense$  6,862 $  6,961 $  6,976 $  7,068 $  7,004 
Net interest and dividend income, tax equivalent$  8,955 $  8,839 $  8,831 $  8,486 $  8,562 
Non-interest income 2,245  2,419  2,256  2,548  2,027 
(Gains) losses on securities (15) 4  3  (294) (2)
Adjusted revenue$11,185 $11,262 $11,090 $10,740 $10,588 
Efficiency Ratio – Non-GAAP 1 61.36% 61.81% 62.90% 65.81% 66.15%
       

1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q1 2020: 59.83%; Q4 2019: 60.19%; Q3 2019: 61.13%; Q2 2019: 64.09%; Q1 2019: 64.51%.


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)Q1 2020Q4 20191Q 2019Q1 2020Q4 20191Q 2019Q1 2020Q4 20191Q 2019
Loans (a)(d)$948,035$928,787$918,290$10,096$9,998$10,0364.26%4.31%4.37%
Securities (c)(d) 89,596 92,626 96,648 698 739 7163.12 3.19 2.96 
FHLBB stock 3,041 2,695 4,192 33 44 724.34 6.53 6.87 
Short term funds (b) 23,218 28,474 30,936 58 98 1551.00 1.38 2.00 
Total interest-earning assets 1,063,890 1,052,582 1,050,066 10,885 10,879 10,9794.09 4.13 4.18 
Other assets 64,438 62,458 57,027      
Total assets$1,128,328$1,115,040$1,107,093      
Interest-bearing demand deposits$154,604$157,180$151,193 119 144 1440.31 0.37 0.38 
Money market accounts 240,680 236,335 199,741 560 601 4740.93 1.02 0.95 
Savings and other 164,174 166,516 184,184 234 288 4510.57 0.69 0.98 
Certificates of deposit 154,869 144,678 165,067 596 617 7271.54 1.71 1.76 
Total interest-bearing deposits 714,327 704,709 700,185 1,509 1,650 1,7960.84 0.94 1.03 
Repurchase agreements 5,672 6,246 2,740 7 8 30.49 0.51 0.44 
Finance lease 3,050 3,109 4,075 36 36 464.72 4.63 4.52 
Note payable 240 249 275 4 4 46.67 6.43 5.82 
Subordinated debt 9,860 9,854 9,837 156 156 1566.33 6.33 6.34 
FHLBB advances 37,118 24,549 59,675 219 186 4122.36 3.03 2.76 
Total interest-bearing liabilities 770,267 748,716 776,787 1,931 2,040 2,4171.00 1.09 1.24 
Demand deposits 235,129 246,175 218,625      
Other liabilities 6,856 7,109 7,150      
Shareholders’ equity 116,076 113,040 104,531      
Total liabilities & shareholders’ equity$1,128,328$1,115,040$1,107,093      
Net interest income (d)   $8,954$8,839$8,562   
Spread on interest-bearing funds      3.09 3.04 2.94 
Net interest margin (e)      3.35 3.34 3.28 

(a) Includes non-accrual loans.
(b) Includes interest-bearing deposits in other banks and federal funds sold.
(c) Average balances of securities are based on amortized cost.
(d) Includes tax exempt income of $0.2 million, $0.2 million and $0.1 million, respectively for 1Q 2020, 4Q 2019 and 1Q 2019 on tax-exempt securities and loans for which income and yields are calculated on a tax-equivalent basis.
(e) Net interest income divided by average interest-earning assets.

1 Please refer to the Coronavirus Update on Salisbury Bank’s website  www.salisburybank.com for details.

Source: Salisbury Bancorp, Inc.