Friday, March 20, 2009
Company Press Release
Source: Salisbury Bancorp, Inc.
Salisbury Contact: John F. Perotti - Chairman & CEO
860-435-9801or jp@salisburybank.com
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FOR IMMEDIATE RELEASE
SALISBURY BANCORP, INC. ANNOUNCES RESULTS FOR THE FOURTH QUARTER AND TWELVE
MONTHS ENDED DECEMBER 31, 2008
Lakeville, Connecticut, March 20, 2009/PR Newswire.....Salisbury Bancorp, Inc.
(the "Company"), NYSE AMEX: "SAL"), the holding company for Salisbury Bank and
Trust Company (the "Bank"), announced today that earnings for the fourth quarter
of 2008 totaled $953,640 which represents earnings per average outstanding share
of $.57. This compares to earnings of $1,000,416 or $.59 per average outstanding
share for the fourth quarter of 2007. For the twelve months ended December 31,
2008, earnings totaled $1,105,881 or $.66 per average share outstanding,
compared to $3,800,048 or $2.26 per average share outstanding, for the period
ended December 31, 2007.
Earnings for the respective periods were significantly impacted as a result of
the U.S. Government placing FHLMC (Freddie Mac) into conservatorship. This
action necessitated the Company to take a write-down of Freddie Mac preferred
stock during the quarter ended September 30th that totaled $2,856,000 and an
additional write-down of $99,365 in the quarter ended December 31st for an
overall total of $2,955,365. The overall tax effected impact for the year ended
December 31, 2008 resulted in a charge to earnings of $1,950,541. However, the
total tax benefit in the amount of $1,004,824 was recognized as a result of
these charges in the quarter ended December 31, 2008, because applicable law at
the time forced financial institutions to treat the loss as a capital loss. On
October 3rd, the Emergency Economic Stabilization Act of 2008 was enacted, which
included a provision permitting banks to recognize losses relating to the
Freddie Mac preferred stock as an ordinary loss, thereby allowing a tax benefit
for both tax and financial reporting purposes.
Total interest and dividend income was $6,586,276 for the fourth quarter
compared to $6,753,146 for the same period in 2007 and total interest expense
decreased to $2,520,510 from $3,196,950. Total interest and dividend income was
$26,557,266 for the year ended December 31, 2008 which compares to $26,152,145
for the corresponding period in 2007. Total interest expense decreased to
$10,825,107 from $12,432,435 for the same period in 2007. Income from the
Trust/Wealth Advisory Services division for the year ended December 31, 2008
totaled $2,263,735, an increase of $213,735 or 10.43% when compared to 2007
income of $2,050,000.
The Bank continually monitors the quality of the loan portfolio to ensure that
loan quality will not be sacrificed for growth or otherwise compromise the
Company's objectives. The Bank did not actively participate in sub-prime lending
programs. Strong risk management policies and procedures relating to the loan
portfolio have always been maintained by the Bank. However, the economy is in a
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deep recession and the northwest corner is beginning to feel these effects. The
Bank's 2008 loan loss provision expense totaled $1,279,099 compared to zero in
2007. Non-performing loans at December 31, 2008 totaled $5,174,601 or 1.71% of
total loans outstanding which compares to $1,824,000 or .67% for the
corresponding period in 2007. Net loans charged-off during 2008 totaled
$1,029,968 compared to net recoveries of just under $1,000 in 2007. At December
31, 2008, the allowance for loan losses totaled $2,724,024 which represented .9%
of total loans outstanding. In addition, total loan delinquency for the period
ending December 31, 2008 was 1.74% of total loans outstanding, of which 0.25%
was over 90 days delinquent. This compares to year end 2007 which was 2.13% of
total loans outstanding with 90 day delinquents of 0.58%. At December 31, 2008,
Other Real Estate Owned totaled $204,534 and consisted of one property. That
property has since been sold.
During the fourth quarter of 2008, the Bank prepaid a $19 million advance from
the Federal Home Loan Bank of Boston at a cost of $674,173, net of tax. The Bank
took such action as part of a program to restructure a portion of the Bank's
wholesale borrowings. The borrowings which were at a rate of 5.97% will be
replaced with new Federal Home Loan Bank advances that have much lower interest
rates and a revised maturity schedule. While the prepayment resulted in a one
time after tax expense in the fourth quarter of 2008, overall, the restructuring
is expected to result in a decrease in future borrowing expense which is
intended to positively impact earnings per share in 2009 and future years.
Chairman and Chief Executive Officer John F. Perotti commented, "I am encouraged
to report continuing growth from our core business development initiatives.
Total deposits have increased $27,183,963 or 8.6% to $344,925,232 at December
31, 2008. This compares to total deposits of $317,741,269 last year at this
time. Total net loans including loans held-for-sale, have increased to
$299,681,684, an increase of 11.7% when comparing net loans of $268,311,275 at
December 31, 2007. The Company's assets at December 31, 2008 totaled
$495,754,160 which compares to total assets of $461,960,398 for the
corresponding period in 2007, an increase of 7.3%."
Mr. Perotti continued, "the capital level of the Bank remains well above the
highest regulatory capital level of "well capitalized"." Capital levels for the
year ended December 31, 2008 compared to Regulatory Capital Ratios are as
follows:
Salisbury Bank Well-Capitalized
Total risk based capital 11.34% >10.00%
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Tier 1 risk based capital 10.53% > 6.00%
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Leverage ratio 7.52% > 5.00%
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Mr. Perotti said "Salisbury Bank has strong capital levels that place us among
the best capitalized companies of our size in the tri-state area. We intend to
use our capital strength to assist our customers in coping with the challenges
they face in the difficult economic environment ahead. The Bank has shown
improvement this quarter, as well as in the year-to-date period, in core
operating results."
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During the year 2008, Salisbury Bancorp, Inc. declared cash dividends totaling
$1.12 per common share outstanding. This compares to total dividends declared
during 2007 of $1.08 per common share outstanding and represents a 3.70%
increase.
Salisbury Bancorp, Inc.'s sole subsidiary, Salisbury Bank and Trust Company, is
a Connecticut chartered commercial bank. The Company has assets in excess of
$490 million and capital in excess of $38 million and serves the communities of
northwestern Connecticut and proximate communities in New York and Massachusetts
which it has done for approximately 160 years. Salisbury Bank and Trust Company
is headquartered in Lakeville, Connecticut and operates full service branches in
North Canaan, Salisbury and Sharon as well as Lakeville, Connecticut, South
Egremont and Sheffield, Massachusetts and Dover Plains, New York. The Bank
offers a full complement of consumer and business banking products and services
as well as trust and wealth advisory services.
Statements contained in this news release contain 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 made 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 government regulations; changes in accounting principles;
and the quality or composition of the loan and investment portfolios and other
factors that may be described in the Company's quarterly reports on Form 10-Q
and its annual report on Form 10-K, each filed with the Securities and Exchange
Commission, which are available at the Securities and Exchange Commission's
internet website (www.sec.gov) and to which reference is hereby made. Therefore,
actual future results may differ significantly from results discussed in the
forward looking statements.