• Second Quarter 2020 Net Income of $0.96 per Basic Common Share

  • Results Reflected a Loan Loss Provision of $1.8 Million Primarily Due to Risks Associated with COVID-19 Pandemic

  • Common Equity Tier 1 and Total Capital Ratios of 11.9% and 13.2%, Respectively

  • Non-Performing Assets were 0.37% of Total Assets  

  • Salisbury Bank was Added to Russell 3000® Index as of June 29, 2020

LAKEVILLE, Conn., July 31, 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 second quarter ended June 30, 2020.

Net income allocated to common shareholders was $2.7 million, or $0.96 per common share, for the quarter ended June 30, 2020 (second quarter 2020), compared with $2.0 million, or $0.72 per common share, for the first quarter ended March 31, 2020 (first quarter 2020), and $2.7 million, or $0.96 per common share, for the second quarter ended June 30, 2019 (second quarter 2019). Results for second quarter 2020 included a loan loss provision of $1.8 million, which was partly offset by fee income of $369 thousand and interest income of $192 thousand on loans recorded under the Small Business Administration’s Paycheck Protection Program (PPP). Additionally, during second quarter 2020, the Bank recorded a credit to compensation expense of $544 thousand to defer the cost of originating such PPP loans over their loan term.

Salisbury’s President and Chief Executive Officer, Richard J. Cantele, Jr., stated, “The pandemic continues to weigh heavily on businesses and consumers as we all adapt to the new “normal”. Despite a higher provision for loan losses, we reported solid results for the second quarter and we continued to bolster our capital base. We remain steadfast in our commitment to help our customers navigate through this period of uncertainty. In addition, we have accelerated our charitable giving to many non-profits in the communities served by the Bank. During the second quarter, the employees of Salisbury Bank processed almost 900 PPP applications for nearly $100 million in loans resulting in approximately 10,500 jobs preserved. In addition, Salisbury assisted hundreds of customers adversely effected by the COVID-19 pandemic with waivers of fees and short-term loan payment deferments. All Salisbury Bank branches reopened to customers on July 8th, and we remain committed to providing outstanding customer service and supporting our local communities during this crisis.”

Net Interest and Dividend Income

Tax equivalent net interest income of $9.8 million for the second quarter 2020 increased $832 thousand, or 9.3%, versus first quarter 2020, and increased $1.3 million, or 15.3%, versus second quarter 2019. Interest income increased $0.2 million, or 2.0%, compared to first quarter 2020 and increased $0.1 million, or 1.3%, compared with second quarter 2019. Second quarter 2020 included PPP fees and interest of $369 thousand and $192 thousand, respectively. The cost of interest bearing liabilities declined $0.6 million, or 31.3%, from first quarter 2020 and declined $1.2 million, or 46.7%, from second quarter 2019. Average earning assets increased $114.3 million, or 10.7%, versus first quarter 2020, and increased $116.5 million, or 11.0%, versus second quarter 2019. Average earning assets for second quarter 2020 included average PPP loan balances of $76.6 million. Average total interest bearing liabilities increased $42.2 million, or 5.5%, versus first quarter 2020 and increased $29.2 million, or 3.7%, versus second quarter 2019. The increase from prior periods primarily reflected the funding of PPP loans. The tax equivalent net interest margin for the second quarter 2020 was 3.31% compared with 3.35% for the first quarter 2020 and 3.19% for the second 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 $2.3 million for second quarter 2020 increased $71 thousand versus first quarter 2020 and decreased $232 thousand versus second quarter 2019. To help support the financial needs of our customers and the communities in our markets, the Bank waived approximately $240 thousand and $270 thousand of deposit and transaction fees in second quarter and the six month period ended June 30, 2020, respectively. Non-interest income for the second quarter 2020 included realized gains of $181 thousand on the sale of available-for-sale securities compared with negligible realized gains in the first quarter 2020 and realized gains of $281 thousand in the second quarter 2019.

Trust and Wealth Advisory fees of $1.0 million were essentially unchanged versus first quarter 2020 and decreased slightly versus second quarter 2019. Assets under administration were $704.1 million as of June 30, 2020 compared with $639.5 million at March 31, 2020 and $713.3 million as of June 30, 2019. Discretionary assets under administration of $480.5 million in second quarter 2020 increased from $425.4 million in first quarter 2020 and $464.5 million in second quarter 2019. The growth from first quarter 2020 primarily reflected higher market valuations whereas the growth versus second quarter 2019 primarily reflected new business activity. Non-discretionary assets under administration were $223.6 million in second quarter 2020 compared with $214.1 million in first quarter 2020 and $248.8 million in second quarter 2019. The increase from first quarter 2020 primarily reflected higher valuations whereas the decline from second quarter 2019 primarily reflected a lower valuation of shares in a partnership for one significant client relationship for which the trust and wealth business recorded only a nominal annual fee.

Service charges and fees of $598 thousand decreased $307 thousand versus first quarter 2020 and decreased $414 thousand versus second quarter 2019. The decrease from the comparative quarters primarily reflected waived deposit and transaction fees as a result of COVID-19 pandemic.

Income from sales and servicing of mortgage loans of $318 thousand increased $190 thousand versus first quarter 2020 and increased $237 thousand from second quarter 2019. Mortgage loans of $14.7 million were sold during the second quarter 2020 compared with sales of $3.2 million for first quarter 2020 and $0.3 million in second quarter 2019.

Non-Interest Expense

Non-interest expense of $6.8 million for second quarter 2020 decreased $147 thousand versus first quarter 2020 and decreased $650 thousand versus second quarter 2019. Compensation expense of $3.4 million for second quarter 2020 decreased $548 thousand from first quarter 2020 and decreased $553 thousand versus second quarter 2019. The decline from the comparative quarters primarily reflected the deferral of compensation costs associated with originating PPP loans. The deferred compensation costs will be amortized into income over the term of the PPP loans as an offset to loan interest income.

Excluding compensation, other non-interest expenses of $3.3 million for second quarter 2020 increased $400 thousand from first quarter 2020 and declined $96 thousand from second quarter 2019. The increase from first quarter 2020 primarily reflected higher premises and equipment charges and increased consulting costs as well as the acceleration of restricted equity awards for retiring directors and the timing of community support contributions. The decrease from second quarter 2019 primarily reflected OREO losses in second quarter 2019, partly offset by higher consulting costs.

The effective income tax rates for second quarter 2020, first quarter 2020 and second quarter 2019 were 18.1%, 14.4% and 18.1%, 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 for second quarter 2020 included $98.9 million in PPP loans, which are categorized as commercial & industrial loans in the below table, and deferred fees of $2.6 million. Excluding PPP loans, gross loans receivable were $956.4 million at June 30, 2020, compared with $959.8 million at March 31, 2020, and $919.5 million at June 30, 2019. Including PPP loans, the ratio of gross loans to deposits for second quarter 2020 was 97.0% compared with 99.4% for first quarter 2020 and 96.7% for second quarter 2019. Balances by loan type for the comparative periods were as follows:

Loan TypeQ2 2020 
Q1 2020
  Q2 2019
Residential Real Estate$437,198 $432,241 $419,811
Commercial Real Estate 323,634  321,358  298,121
Commercial & Industrial 247,440  157,573  163,487
Farm Land 3,324  3,612  3,714
Vacant Land 13,879  14,488  8,050
Municipal 20,707  20,964  19,782
Consumer 7,886  8,195  5,166
Deferred (Fees) Costs (1,339)  1,329  1,329
Gross Loans Receivable$1,052,729 $959,760 $919,460

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 June 30, 2020, loan payments were deferred on 124 residential and consumer loans ($35 million loan balance) and 200 commercial loans ($136 million loan balance).

Non-performing assets increased $1.6 million during second quarter 2020 to $4.8 million, or 0.37% of total assets at June 30, 2020, from $3.2 million, or 0.28% of total assets at March 31, 2020, and decreased $0.7 million from $5.5 million, or 0.49% of total assets, at June 30, 2019.

The amount of total impaired and potential problem loans decreased $1.3 million during the second quarter ended June 30, 2020 to $26.9 million (2.55% of gross loans receivable), compared to $28.1 million, or 2.93% of gross loans receivable at March 31, 2020, and increased $4.6 million from $22.2 million, or 2.42% of gross loans receivable at June 30, 2019.

Accruing loans receivable 30-to-89 days past due decreased $3.5 million during second quarter 2020 to $2.7 million, or 0.25% of gross loans receivable, from $6.1 million, or 0.64% of gross loans receivable at March 31, 2020, and increased $0.2 million from $2.5 million, or 0.27% of gross loans receivable at June 30, 2019.

The allowance for loan losses at June 30, 2020 was $12.4 million compared with $10.6 million at March 31, 2020 and $8.9 million at June 30, 2019. The provision for loan losses expense was $1.8 million for second quarter 2020 versus $1.7 million for first quarter 2020, and $151 thousand for second quarter 2019. The provision for second 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 (recoveries) were $55 thousand for the second quarter 2020, ($17) thousand for first quarter 2020 and $15 thousand for the second quarter 2019. Reserve coverage, as measured by the ratio of the allowance for loan losses to gross loans, was 1.18% for the second quarter 2020, versus 1.11% for first quarter 2020 and 0.97% for second 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 $1.1 billion at June 30, 2020 compared with $965.6 million at March 31, 2020 and $950.7 million at June 30, 2019. Deposits at June 30, 2020 included brokered deposits, including CDARS one-way buys, of $38.2 million compared with $58.2 million at March 31, 2020 and $52.7 million at June 30, 2019. Average total deposits for the second quarter 2020 were $1.0 billion compared with $949.4 million for the first quarter ended March 31, 2020 and $947.1 million for the second quarter ended June 30, 2019. Average total deposits for the second quarter 2020 included average brokered deposits of $44.2 million compared with $33.3 million for first quarter 2020 and $56.4 million for second quarter 2019.

Federal Home Loan Bank of Boston (FHLB) advances of $55.1 million at June 30, 2020 increased $14.2 million from March 31, 2020 and increased $22.3 million from June 30, 2019. Salisbury’s excess borrowing capacity at FHLBB was approximately $223 million at June 30, 2020.

Capital

Book value per common share increased $0.61 during the second quarter to $41.66 per share at June 30, 2020 and increased $3.07 from the second quarter 2019. Tangible book value per common share increased $0.66 during second quarter 2020 to $36.51 at June 30, 2020 and increased $3.23 from the second quarter 2019.

Shareholders’ equity increased $2.3 million in second quarter 2020 to $118.4 million at June 30, 2020 as net income of $2.7 million, unrealized gains in the Available-For-Sale portfolio of $0.2 million and the issuance of restricted stock awards of $0.2 million was 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 June 30, 2020, the Bank’s Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 8.95%, 13.15%, and 11.90%, 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 July 31, 2020 meeting. The dividend will be paid on August 28, 2020 to shareholders of record as of August 14, 2020.

Inclusion in the Russell 3000® Index

As previously announced, Salisbury was added to the Russell 3000® Index at the conclusion of the 2020 Russell Indexes annual reconstitution, effective as of the US market open on Monday, June 29, 2020.  The annual Russell Indexes reconstitution captures the 4,000 largest US stocks as of May 8, 2020, ranking them by total market capitalization. Membership in the US all-cap Russell 3000® Index, which remains in place for one year, means automatic inclusion in the small-cap Russell 2000® Index, as well as the appropriate growth and value style indexes. FTSE Russell determines membership for its Russell indexes primarily by objective, market capitalization rankings and style attributes. Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies. Russell Indexes are part of FTSE Russell, a leading global index provider.

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 June 30, 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)June 30, 2020 December 31, 2019 
ASSETS(unaudited)  
Cash and due from banks$7,391 $7,406 
Interest bearing demand deposits with other banks 77,104  19,479 
Total cash and cash equivalents 84,495  26,885 
Interest bearing Time Deposits with Financial Institutions 750  750 
Securities    
Available-for-sale at fair value 89,452  91,801 
CRA mutual fund at fair value 912  882 
Federal Home Loan Bank of Boston stock at cost 3,353  3,242 
Loans held-for-sale 5,313  332 
Loans receivable, net (allowance for loan losses: $12,371 and $8,895) 1,040,358  927,413 
Other real estate owned -  314 
Bank premises and equipment, net 17,950  17,385 
Goodwill 13,815  13,815 
Intangible assets (net of accumulated amortization: $5,054 and $4,884) 825  995 
Accrued interest receivable 3,988  3,415 
Cash surrender value of life insurance policies 20,846  20,580 
Deferred taxes 1,935  1,249 
Other assets 3,145  3,390 
  Total Assets$1,287,137 $1,112,448 
LIABILITIES and SHAREHOLDERS' EQUITY      
Deposits      
Demand (non-interest bearing)$325,531 $237,852 
Demand (interest bearing) 188,487  153,314 
Money market 251,242  239,504 
Savings and other 170,537  161,112 
Certificates of deposit 149,802  127,724 
Total deposits 1,085,599  919,506 
Repurchase agreements 7,809  8,530 
Federal Home Loan Bank of Boston advances 55,118  50,887 
Subordinated debt 9,871  9,859 
Note payable 228  246 
Finance lease obligations 1,696  1,718 
Accrued interest and other liabilities 8,372  8,047 
  Total Liabilities 1,168,693  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 (1,031)  (795) 
Paid-in capital 45,096  44,490 
Retained earnings 71,461  68,320 
Accumulated other comprehensive  income, net 2,634  1,357 
  Total Shareholders' Equity 118,444  113,655 
  Total Liabilities and Shareholders' Equity$1,287,137 $1,112,448 

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

 Three months ended Six months ended
Periods ended June 30, (in thousands, except per share amounts)2020 2019 2020 2019
Interest and dividend income          
Interest and fees on loans$10,313 $9,880 $20,300 $19,814
Interest on debt securities:           
Taxable 409  583  864  1,204
Tax exempt 171  117  356  189
Other interest and dividends 51  252  142  479
Total interest and dividend income 10,944  10,832  21,662  21,686
Interest expense          
Deposits 988  1,999  2,497  3,795
Repurchase agreements 4  4  10  7
Finance lease 35  46  71  92
Note payable 4  4  7  8
Subordinated debt 156  156  312  312
Federal Home Loan Bank of Boston advances 140  279  359  691
Total interest expense 1,327  2,488  3,256  4,905
Net interest and dividend income 9,617  8,344  18,406  16,781
Provision for loan losses 1,806  151  3,512  445
Net interest and dividend income after provision for loan losses 7,811  8,193  14,894  16,336
Non-interest income          
Trust and wealth advisory 1,031  1,044  2,061  1,950
Service charges and fees 598  1,012  1,503  1,932
Gains on sales of mortgage loans, net 252  1  313  8
Mortgage servicing, net 66  80  133  156
Gains on CRA mutual fund 8  12  22  23
Gains on available-for-sale securities, net 181  281  182  272
BOLI income and gains 133  87  266  166
Other 47  31  80  68
Total non-interest income 2,316  2,548  4,560  4,575
Non-interest expense          
Salaries 2,411  2,959  5,261  5,952
Employee benefits 1,037  1,042  2,183  2,227
Premises and equipment 981  1,004  1,891  1,976
Data processing 557  577  1,098  1,086
Professional fees 758  583  1,385  1,118
OREO gains, losses and write-downs, net -  270  -  322
Collections, OREO, and loan related 79  79  104  209
FDIC insurance 103  140  208  303
Marketing and community support 169  151  293  307
Amortization of core deposit intangibles 83  99  170  203
Other 611  535  1,133  947
Total non-interest expense 6,789  7,439  13,726  14,650
Income before income taxes 3,338  3,302  5,728  6,261
Income tax provision 604  599  947  1,124
Net income$2,734 $2,703 $4,781 $5,137
Net income allocated to common stock $2,691 $2,671 $4,704 $5,079
            
Basic earnings per common share$0.96 $0.96 $1.68 $1.83
Diluted earnings per common share$0.96 $0.95 $1.68 $1.82
Common dividends per share$0.29 $0.28 $0.58 $0.56
            






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

At or for the quarters ended     
(in thousands, except per share amounts and ratios)Q2 2020Q1 2020Q4 2019Q3 2019Q2 2019
Total assets$1,287,137$1,145,751$1,112,448$1,144,240$1,119,212
Loans receivable, net1,040,358949,142927,413915,083910,573
Total securities93,71794,96695,92598,270103,857
Deposits1,085,599965,620919,506966,178950,723
FHLBB advances55,11840,93250,88737,82832,769
Shareholders’ equity118,444116,143113,655111,580108,948
Wealth assets under administration704,052639,457777,503752,467713,319
Discretionary wealth assets under administration480,456425,359498,737475,482464,537
Non-discretionary wealth assets under administration223,596214,098278,766276,985248,782
Non-performing loans4,8153,1883,6215,3705,062
Non-performing assets4,8153,1883,9355,6875,463
Accruing loans past due 30-89 days2,6566,1092,0771,7842,473
Net interest and dividend income9,6178,7878,6658,6678,344
Net interest and dividend income, tax equivalent(1)9,7868,9548,8398,8318,486
Provision for loan losses1,8061,70641794151
Non-interest income2,3162,2452,4192,2562,548
Non-interest expense6,7896,9367,0807,1847,439
Income before income taxes3,3382,3903,5873,6453,302
Income tax provision604343578657599
Net income2,7342,0473,0092,9882,703
Net income allocated to common shareholders2,6912,0132,9602,9402,671
      
Per share data     
Basic earnings per common share$0.96$0.72$1.06$1.06$0.96
Diluted earnings per common share0.960.721.061.050.95
Dividends per common share0.290.290.280.280.28
Book value per common share41.6641.0540.2239.5238.59
Tangible book value per common share - Non-GAAP ⁽236.5135.8534.9834.2433.28
Common shares outstanding at end of period (in thousands)2,8432,8292,8262,8232,823
Weighted average common shares outstanding, to calculate basic earnings per share (in thousands) 2,7962,7882,7812,7832,780
Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands) 2,8042,7972,7942,7952,793
      
Profitability ratios     
Net interest margin (tax equivalent) (1)3.31%3.35%3.34%3.29%3.19%
Efficiency ratio (3)56.2261.3661.8162.9065.81
Effective income tax rate18.1114.3516.1118.0218.14
Return on average assets0.890.731.071.050.97
Return on average common shareholders’ equity9.367.0710.5610.7310.07
      
Credit quality ratios     
Non-performing loans to loans receivable, gross0.460.330.390.580.55
Accruing loans past due 30-89 days to loans receivable, gross0.250.640.220.190.27
Allowance for loan losses to loans receivable, gross1.181.110.950.960.97
Allowance for loan losses to non-performing loans256.9333.0245.64164.73175.56
Non-performing assets to total assets0.370.280.350.500.49
      
Capital ratios     
Common shareholders' equity to assets9.20%10.14%10.22%9.75%9.73%
Tangible common shareholders' equity to tangible assets - Non-GAAP(2)8.168.979.018.568.51
Tier 1 leverage capital (4)8.959.659.609.279.10
Total risk-based capital (4)13.1512.9712.8412.5812.57
Common equity tier 1 capital (4)11.9011.7911.8311.5711.54

(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)Q2 2020 Q1 2020 Q4 2019 Q3 2019
 Q2 2019 
                     
Common Shareholders' Equity$118,444 $116,143 $113,655 $111,580 $108,948 
Less: Goodwill (13,815)  (13,815)  (13,815)  (13,815)  (13,815) 
Less: Intangible assets (825)  (908)  (995)  (1,086)  (1,180) 
Tangible Common Shareholders' Equity$103,804 $101,420 $98,845 $96,679 $93,953 
Total Assets$1,287,137 $1,145,751 $1,112,448 $1,144,240 $1,119,212 
Less: Goodwill (13,815)  (13,815)  (13,815)  (13,815)  (13,815) 
Less: Intangible assets (825)  (908)  (995)  (1,086)  (1,180) 
Tangible Total Assets$1,272,497 $1,131,028 $1,097,638 $1,129,339 $1,104,217 
Common Shares outstanding 2,843  2,829  2,826  2,823  2,823 
                     
Book value per Common Share – GAAP$41.66 $41.05 $40.22 $39.52 $38.59 
Tangible book value per Common Share - Non-GAAP 36.51  35.85  34.98  34.24  33.28 
Tangible common shareholders’ equity to tangible total assets - Non-GAAP 8.16%  8.97%  9.01%  8.56%  8.51% 
                     
Consolidated:                    
Non-interest expense$6,789 $6,936 $7,080 $7,184 $7,438 
Less: Amortization of core deposit intangibles (83)  (87)  (91)  (93)  (99) 
Less: Foreclosed property expense including OREO gains, losses and Write downs (7)  13  (27)  (115)  (271) 
Adjusted non-interest expense$6,699 $6,862 $6,962 $6,976 $7,068 
Net interest and dividend income, tax equivalent$9,786 $8,955 $8,839 $8,831 $8,486 
Non-interest income 2,316  2,245  2,419  2,256  2,548 
(Gains) losses on securities (188)  (15)  4  3  (294) 
Adjusted revenue$11,914 $11,185 $11,262 $11,090 $10,740 
Efficiency Ratio – Non-GAAP 1 56.23%  61.36%  61.81%  62.90%  65.81% 
                     

1 Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q2 2020: 54.29%; Q1 2020: 59.83%; Q4 2019: 60.19%; Q3 2019: 61.13%; Q2 2019: 64.09%. If Q2 2020 results were normalized to exclude the impact of the COVID-19 pandemic, non-interest expense would increase by $538 thousand for deferred compensation costs and revenue would be adjusted to include waived deposit fees of $240 thousand and exclude PPP loan and fee income of $192 thousand and $369 thousand, respectively. The normalized efficiency ratio for Q2 2020 would have been 62.47% or 61.08%, 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) Q2 2020 Q1 2020 Q2 2019 Q2 2020 Q1 2020 Q2 2019 Q2 2020 Q1 2020 Q2 2019 
Loans (a)(d) $1,038,551 $948,035 $923,513 $10,428 $10,096 $9,984 4.02% 4.26% 4.31% 
Securities (c)(d) 86,987 89,596 99,050 634 698 738 2.92 3.12 2.98 
FHLBB stock 3,580 3,041 3,258 39 33 66 4.36 4.34 8.09 
Short term funds (b) 49,105 23,218 35,853 12 58 186 0.10 1.00 2.08 
Total interest-earning assets 1,178,223 1,063,890 1,061,674 11,113 10,885 10,974 3.77 4.09 4.13 
Other assets 60,288 64,438 56,081             
Total assets $1,238,511 $1,128,328 $1,117,755             
Interest-bearing demand deposits $172,811 $154,604 $156,597 103 119 154 0.24 0.31 0.39 
Money market accounts 237,667 240,680 209,351 239 560 558 0.40 0.93 1.07 
Savings and other 171,436 164,174 184,346 102 234 456 0.24 0.57 0.99 
Certificates of deposit 157,288 154,869 177,535 544 596 831 1.38 1.54 1.88 
Total interest-bearing deposits 739,202 714,327 727,829 988 1,509 1,999 0.53 0.84 1.10 
Repurchase agreements 4,773 5,672 3,334 4 7 4 0.34 0.49 0.47 
Finance lease 2,987 3,050 4,509 35 36 46 4.69 4.72 4.07 
Note payable 231 240 266 4 4 4 6.93 6.67 6.06 
Subordinated debt 9,866 9,860 9,843 156 156 156 6.32 6.33 6.34 
FHLBB/FRB borrowings 55,374 37,118 37,462 140 219 279 1.01 2.36 2.94 
Total interest-bearing liabilities 812,433 770,267 783,243 1,327 1,931 2,488 0.65 1.00 1.27 
Demand deposits 302,965 235,129 221,012             
Other liabilities 6,029 6,856 5,862             
Shareholders’ equity 117,084 116,076 107,638             
Total liabilities & shareholders’ equity $1,238,511 $1,128,328 $1,117,755             
Net interest income (d)       $9,786 $8,954 $8,486       
Spread on interest-bearing funds             3.12 3.09 2.86 
Net interest margin (e)             3.31 3.35 3.19 

(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 2Q 2020, 1Q 2020 and 2Q 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.

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

Six months ended June 30,Average BalanceIncome / ExpenseAverage Yield / Rate
(dollars in thousands) 2020  2019  2020  2019 2020 2019 
Loans (a)(d)$  993,293 $  920,915 $  20,524 $  20,021 4.13% 4.35% 
Securities (c)(d) 88,292  97,856  1,332  1,454 3.02 2.97 
FHLBB stock 3,310  3,723  72  138 4.35 7.41 
Short term funds (b) 36,161  33,408  70  341 0.39 2.04 
Total earning assets 1,121,056  1,055,902  21,998  21,954 3.92 4.16 
Other assets 62,365  56,552           
Total assets$  1,183,421 $  1,112,454           
Interest-bearing demand deposits$  163,707 $  153,910  222  298 0.27 0.39 
Money market accounts 239,173  204,572  799  1,032 0.67 1.01 
Savings and other 167,805  184,266  336  907 0.40 0.98 
Certificates of deposit 156,078  171,334  1,140  1,558 1.46 1.82 
Total interest-bearing deposits 726,763  714,082  2,497  3,795 0.69 1.06 
Repurchase agreements 5,223  3,039    10  7 0.38 0.46 
Finance lease 3,019  4,293  71  92 4.70 4.29 
Note payable 235  271  7  8 5.96 5.90 
Subordinated Debt (net of issuance costs) 9,864  9,841  312  312 6.33 6.34 
FHLBB advances 46,247  48,507  359  691 1.55 2.85 
Total interest-bearing liabilities 791,351  780,033  3,256  4,905 0.82 1.26 
Demand deposits 269,031  219,825           
Other liabilities 6,460  6,504           
Shareholders’ equity 116,579  106,092           
Total liabilities & shareholders’ equity$   1,183,421 $  1,112,454           
Net interest income   $  18,742 $  17,049  
Spread on interest-bearing funds            3.10 2.90 
Net interest margin (e)            3.33 3.22 

(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 $0.3 million and $0.3 million, 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