EXHIBIT 99.1
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EXHIBIT 99.1
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Salisbury Bancorp, Inc.
Annual Shareholders Meeting, April 28, 2004
President's Remarks
The year 2003 measured by most any standard, was a year of progress and
achievement for Salisbury Bank & Trust Company and provided strong momentum for
entering 2004 and our planned acquisition of the Canaan National Bank.
Reported Company earnings were $3,840,000......an increase of 20% over the
previous record year. Earnings per share increased by 20% as well, to $2.70. The
improvement in net income is primarily the result of growth in earning assets
that has produced an increase in total net interest income, a reduction in
interest expense and an increase in other noninterest income.
Management is pleased with a 28% increase in noninterest income, a 12% increase
in Trust Department income, a 19% increase in service charge income, and a 67%
increase in gains on sales of available for sale securities. Gains on sale of
loans held-for-sale increased 15% and other income increased 16%.
Cash dividends declared per share increased to $0.92 marking the 13th
consecutive year that your board has increased the dividend paid to
shareholders.
During the year, we continued to make improvements to garner efficiencies to
enable our employees and officers to enhance service delivery to our customers.
Examples are the installation of a new computerized telephone system linking all
of our offices and upgraded computer systems thru out the Bank. Many of you who
frequent our main office in Lakeville have indicated that you are pleased with
the changes made to the lobby area, which was completely refurbished. The work
in Lakeville is not yet complete, however. We plan to begin next week with the
installation of a third lane to our drive up teller facility which will house a
state of the art ATM machine that will be accessible from your automobile. We
also plan to reconfigure the entrance and exit area to the 5 Bissell Street
offices and create additional parking for our customers and visitors.
We have grown our mortgage lending operation to a sufficient size that enables
us to take advantage of a beneficial Connecticut state tax law through the
creation of a passive investment company subsidiary which will be responsible
for much of the Bank's mortgage lending functions. As of April 15th, the Bank
has transferred $126 million of mortgage loans to our newly formed subsidiary,
SBT Mortgage Service Corporation. This should offer tax advantages, while
retaining our valuable mortgage banking relationships.
The announcement of the execution of our definitive agreement to acquire Canaan
in November of last year was a very exciting event for us and should provide us
with new opportunities. Following receipt of all required regulatory approvals
and approval by the shareholders of Canaan, we expect to consummate the
transaction during the third calendar quarter of this year. This transaction
represents the merger of two long-standing community focused organizations with
very similar cultures and should help us to expand our Massachusetts presence
and serve customers throughout the Tri-State region of northwestern Connecticut,
western Massachusetts and proximate communities in New York State. Both
institutions provide a level of high quality personal service from a committed
team of individuals who are active and in touch with the communities that they
serve. When the transaction is consummated, our combined base of talented and
dedicated employees should continue to provide outstanding customer service in
the delivery of our financial products and services. Our shared familiarity with
the Tri-State region reduces execution risk and we anticipate that this
acquisition will be accretive to earnings within the first year following
consummation.
Our strategic plan continues to create value for Salisbury Bank's customers and
shareholders. As a result of the Company's first quarter performance, the Board
of Directors voted to increase the dividend to $.24 per share. I believe you
will be pleased to learn that our first quarter's net income exceeded both the
2004 first quarter budgeted number, as well as last year's actual record number.
Net income for the first quarter of 2004 was $1,071,777 or $.75 per share. This
compares to 2003 first quarter earnings of $1,029,030 or $.72 per share.
Although we are located in a very unique and competitive market in the Northwest
corner of Connecticut, I believe the Bank is positioned well for the future
challenges that face us as a community bank. Our people are responsible for the
success your Bank has enjoyed during the past several years. We have assembled
an extraordinary team which has performed well. We've empowered them to make
decisions, and they are active and involved in the communities that we serve. We
have an extremely dedicated Advisory Board and Board of Directors who
communicate with us openly and candidly, and continually challenge us to be the
best community bank in the Tri-State area. Together, we all appreciate your
interest in Salisbury Bank and encourage you to do your banking with us and to
refer us to your friends and neighbors.