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

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

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

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

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

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

Net Interest and Dividend Income

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

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

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

Non-Interest Income

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

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

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

Non-Interest Expense

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

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

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

Full Year Results

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

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

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

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

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

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

The effective tax rate for 2022 was 18.2% compared with 20.6% for 2021. The higher tax rate in 2021 reflected a lower mix of tax-exempt income from municipal bonds, tax advantaged loans and bank-owned life insurance on a comparatively higher level of pre-tax income.

Loans

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

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


Asset Quality

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

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

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

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

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

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

Deposits and Borrowings

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

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

Capital

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

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

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

Dividend on Common Shares

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

Other Matters

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

Background

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

Forward-Looking Statements

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

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

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

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

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


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

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


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

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

(1) Adjusted to reflect the U.S. federal statutory benefit on income derived from tax-exempt securities and loans.
(2) Refer to schedule labeled “Supplemental Information – Non-GAAP Financial Measures”.
(3) Represents the capital ratios of the Bank.


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

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

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


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

At or for the quarters ended Average Balance Income / Expense Average Yield / Rate
(dollars in thousands) Q4 2022 Q3 2022 Q4 2021 Q4 2022 Q3 2022 Q4 2021 Q4 2022 Q3 2022 Q4 2021
Loans (a)(d) $ 1,209,184 $ 1,168,037 $ 1,078,097 $ 12,726 $ 11,675 $ 10,560 4.16 % 3.95 % 3.89 %
Securities (c)(d)   217,963   221,620   186,284   1,279   1,192   911 2.35   2.15   1.96  
FHLBB stock   1,416   1,191   1,641   15   8   11 4.29   2.92   2.68  
Short term funds (b)   43,328   68,818   155,502   339   344   62 3.10   1.98   0.16  
Total interest-earning assets   1,471,891   1,459,666   1,421,524   14,359   13,219   11,544 3.86   3.58   3.22  
Other assets   52,855   60,283   76,059            
Total assets $ 1,524,746 $ 1,519,949 $ 1,497,583            
Interest-bearing demand deposits $ 232,228 $ 233,547 $ 225,607   115   106   104 0.20   0.18   0.18  
Money market accounts   331,451   320,552   329,005   915   356   139 1.10   0.44   0.17  
Savings and other   246,650   246,101   233,463   291   179   66 0.47   0.29   0.11  
Certificates of deposit   128,787   131,918   121,192   465   242   200 1.43   0.73   0.65  
Total interest-bearing deposits   939,116   932,118   909,267   1,786   883   509 0.75   0.38   0.21  
Repurchase agreements   6,615   9,684   7,923   20   4   3 1.18   0.18   0.16  
Finance lease   5,475   5,318   2,696   40   41   34 2.94   3.05   5.10  
Note payable   132   142   173   2   2   3 6.16   6.15   6.49  
Subordinated debt (f)   24,523   24,508   24,467   233   233   233 3.80   3.80   3.82  
FHLBB advances   6,576   217   8,071   57   2   28 3.37   3.15   1.38  
Total interest-bearing liabilities   982,437   971,987   952,597   2,138   1,165   810 0.86   0.48   0.34  
Demand deposits   408,672   410,861   401,294            
Other liabilities   8,233   7,065   8,410            
Shareholders’ equity   125,404   130,036   135,282            
Total liabilities & shareholders’ equity $ 1,524,746 $ 1,519,949 $ 1,497,583            
Net interest income       $ 12,221 $ 12,054 $ 10,735      
Spread on interest-bearing funds             3.00   3.11   2.88  
Net interest margin (e)             3.28   3.27   2.99

 

(a)  Includes non-accrual loans.
(b)  Includes interest-bearing deposits in other banks and federal funds sold.
(c)  Average balances of securities are based on amortized cost.
(d)  Includes tax exempt income benefit of $0.2 million, $0.2 million and $0.2 million, respectively, for Q4 2022, Q3 2022 and Q4 2021 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2022 and 2021.
(e)  Net interest income divided by average interest-earning assets.
(f)  Net of issuance costs.


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

Twelve months ended December 31, Average Balance Income / Expense Average Yield / Rate
(dollars in thousands)   2022   2021   2022   2021 2022  2021 
Loans (a)(d) $ 1,142,663 $ 1,059,663 $ 45,373 $ 41,549 3.93 % 3.89 %
Securities (c)(d)   218,331   144,833   4,549   2,991 2.08   2.06  
FHLBB stock   1,315   1,790   41   37 3.12   2.09  
Short term funds (b)   72,309   158,907   830   210 1.15   0.13  
Total earning assets   1,434,618   1,365,193   50,793   44,787 3.51   3.26  
Other assets   62,365   72,590        
Total assets $ 1,496,983 $ 1,437,783        
Interest-bearing demand deposits $ 231,970 $ 224,763   429   435 0.18   0.19  
Money market accounts   318,302   315,469   1,554   547 0.49   0.17  
Savings and other   240,695   215,300   630   239 0.26   0.11  
Certificates of deposit   132,192   130,879   1,111   939 0.84   0.72  
Total interest-bearing deposits   923,159   886,411   3,724   2,160 0.40   0.24  
Repurchase agreements   8,417   10,679   30   16 0.36   0.15  
Finance lease   5,294   2,739   163   136 3.07   4.96  
Note payable   147   187   9   11 6.14   6.13  
Subordinated Debt (f)   24,502   22,511   932   1,000 3.80   4.44  
FHLBB advances   2,446   9,938   114   125 4.59   1.24  
Total interest-bearing liabilities   963,965   932,465   4,972   3,448 0.52   0.37  
Demand deposits   395,848   366,926        
Other liabilities   7,183   7,285        
Shareholders’ equity   129,987   131,107        
Total liabilities & shareholders’ equity $ 1,496,983 $ 1,437,783        
Net interest income     $ 45,821 $ 41,339    
Spread on interest-bearing funds         3.00   2.89  
Net interest margin (e)         3.16   3.01  

(a)  Includes non-accrual loans.
(b)  Includes interest-bearing deposits in other banks and federal funds sold.
(c)  Average balances of securities are based on historical cost.
(d)  Includes tax exempt income benefit of $0.7 million and $0.5 million, respectively for 2022 and 2021 on tax-exempt securities and loans whose income and yields are calculated on a tax-equivalent basis. The income benefit reflected the U.S. federal statutory tax rate of 21.0% for 2022 and 2021.
(e)  Net interest income divided by average interest-earning assets.
(f)  Net of issuance costs.

 

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