Monday, November 2, 2009
Company Press Release
Source: Salisbury Bancorp, Inc.
Salisbury Contact: Richard J. Cantele, Jr., President and Chief Executive
Officer 860-435-9801 or rick@salisburybank.com
FOR IMMEDIATE RELEASE
SALISBURY BANCORP, INC. ANNOUNCES RESULTS FOR THE THIRD QUARTER ENDED SEPTEMBER
30, 2009
Lakeville, Connecticut, November 2, 2009/PR Newswire.....Salisbury Bancorp, Inc.
("Salisbury"), NYSE AMEX: "SAL", the holding company for Salisbury Bank and
Trust Company (the "Bank"), announced results for its third quarter ended
September 30, 2009.
Net income available to common shareholders was $549,000, or $.33 per common
share, for the third quarter ended September 30, 2009, compared to a net loss of
$(1,912,000), or $(1.13) per common share, for the third quarter of 2008.
Annualized return on average common shareholder's equity was 5.40% for the third
quarter of 2009 compared with -18.03 % for the third quarter of 2008. Third
quarter 2008 included a securities loss arising from a $2,856,000 write-down of
Freddie Mac preferred stock following the U.S. Government placing FHLMC into
conservatorship.
Net interest and dividend income for the quarter increased $321,000 due
primarily to a $78.6 million increase in average earning assets, which more than
offset a 33 basis point decrease in the net interest margin to 3.52%. Excluding
securities losses, all other non-interest income decreased $68,000 as a result
of a decrease in credit card fees, attributable to the sale of the credit card
portfolio in 2008, and lower Trust/Wealth Advisory Services income, offset in
part by a $130,000 one-time life insurance benefit arising from the passing of
John F. Foley, CFO, and increased banking service fees. Non-interest expense
increased $967,000 due primarily to a $637,000 increase in compensation expense
and $67,000 in other operating expenses. The increase in compensation expense
included $378,000 in additional pension expense related to the retirement of
John F. Perotti, CEO. The increase in other operating expense included $186,000
in additional FDIC deposit insurance premiums due to an increase in assessments
and deposit growth.
President and Chief Executive Officer Richard J. Cantele, Jr. stated, "Despite
the challenges presented by current economic conditions, income from core
operations remains strong. Our net interest margin improved from the previous
quarter as a result of management's efforts to manage our assets and liabilities
in today's interest rate environment. The growth in both loans and deposits
primarily reflects our focus on doing what we do best, making loans and
gathering deposits in the communities we serve. I believe the fundamentals of
our core business remain solid and are reflected in the growth of our balance
sheet."
For the nine month period ended September 30, 2009 net income available to
common shareholders was $1,368,000, or $.81 per common share, compared to
$152,000, or $.09 per common share, for the nine month period ended September
30, 2008. Annualized return on average common shareholder's equity was 4.59% for
the 2009 period compared with 0.55% for the 2008 period. Net interest and
(Continued)
dividend income increased $1,061,000 due primarily to a $58.1 million increase
in average earning assets, which more than offset a 14 basis point decrease in
the net interest margin to 3.58%. Securities losses for 2009 result from a
$1,128,000 write-down for other than temporary impairment on five non-agency
issued CMO securities in June 2009, offset in part by securities gains.
Securities losses for 2008 result from the aforementioned $2,856,000 write-down
of Freddie Mac preferred stock. Excluding securities losses, all other
non-interest income increased $293,000 due to increases in gains on mortgage
sales, mortgage servicing income, banking service fees and other income,
including the aforementioned $130,000 one-time life insurance death benefit,
offset in part by a $251,000 decrease in Trust/Wealth Advisory Services income
due to the decline in the market value of assets under management, and a
decrease in credit card fees, attributable to the sale of the credit card
portfolio in 2008. Non-interest expense increased $2,245,000 due primarily to a
$1,107,000 increase in compensation expense, $181,000 in professional services
and $957,000 in other operating expenses. The increase in compensation expense
included $530,000 in pension expense and $477,000 in salaries. The increase in
other operating expense included $701,000 in additional FDIC deposit insurance
premiums due to the 2009 special assessment, deposit growth and an increase in
premiums.
Salisbury's assets increased to $564 million, up $69 million since December 31,
2008. Total net loans, including loans held for sale, were $312 million at
September 30, 2009 reflecting an increase of $13 million, or 4.25%, since
December 31, 2008. Non-performing assets increased $0.5 million during the
quarter to $7.2 million at September from $6.7 million at June 30, 2009,
compared with $5.1 million at December 31, 2008. A single loan relationship
accounts for $3.0 million of the 2009 increase. Reserve coverage, as measured by
the ratio of the allowance for loan losses to gross loans, increased slightly to
1.10% at September 30, 2009 compared with 0.90% at December 31, 2008 and 1.05%
at September 30, 2008.
Deposits increased $70 million to $415 million from $345 million at December 31,
2008. This significant growth in deposits stems from customer preference for the
safety of insured deposits versus market risk in the equity markets and a
concerted effort by the Bank's staff to expand deposit relationships with
customers. At September 30, 2009, book value per common share was $25.89 and
tier 1 leverage and total risk-based capital ratios were 8.57% and 12.37%,
respectively. In March 2009 Salisbury issued $8.8 million of preferred stock
pursuant to the U.S. Treasury's TARP CPP.
As previously announced, the Board of Directors of Salisbury declared a third
quarter dividend of $.28 per common share payable on November 6, 2009 to
shareholders of record on October 23, 2009. In response to changes in regulatory
requirements Salisbury is changing the timing of future dividend announcements
to coincide with quarterly earnings announcements. Dividends, when declared,
will generally be paid the last business day of February, May, August and
November, although the Company is not obligated to pay dividends on those dates
or at any other time.
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, 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;
(Continued)
and the quality or composition of the loan and investment portfolios and other
factors that may be described in Salisbury'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.
Salisbury Bancorp, Inc
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands except ratios and per share amounts)
Three month Nine month
period ended period ended
September 30 September 30
STATEMENT OF INCOME 2009 2008 2009 2008
---- ---- ---- ----
Interest and dividend income $6,703 $6,712 $19,577 $19,971
Interest expense 2,257 2,587 6,850 8,305
Net interest income 4,446 4,125 12,727 11,666
Provision for loan losses 180 520 925 690
Non-interest income
Losses on securities, (net) - (2,671) (692) (2,317)
Trust/Wealth Advisory 463 543 1,433 1,684
Service charges 268 237 750 701
Gains on sales of mortgage loans 63 50 312 161
Mortgage servicing 65 58 391 110
Other 399 438 966 902
Total non-interest income (loss) 1,258 (1,345) 3,160 1,241
Non-interest expense
Salaries and employee benefits 2,784 2,147 7,332 6,225
Occupancy 238 258 740 721
Equipment 265 219 705 650
Data processing 327 310 1,040 1,005
Insurance 244 58 833 148
Printing and stationery 58 66 225 201
Professional fees 308 218 832 651
Legal expense 68 116 276 282
Amortization of core deposit intangible 41 41 123 123
Other expense 469 402 1,321 1,176
Total non-interest expense 4,802 3,835 13,427 11,182
Income (loss) before income taxes 722 (1,575) 1,535 1,035
Provision (benefit) for income taxes 2 337 (83) 883
Net income (loss) $ 720 $ (1,912) $ 1,618 $ 152
Net income (loss) available to
common shareholders $ 549 $ (1,912) $ 1,368 $ 152
Per common share
Diluted earnings (loss) $ 0.33 $(1.13) $ 0.81 $ 0.09
Cash dividends 0.28 0.28 0.56 0.84
Statistical data
Net interest margin (fully tax equivalent) 3.52% 3.85% 3.58% 3.72%
Efficiency ratio 84.18 70.40 80.99 73.23
Return on average assets 0.39 (1.58) 0.34 0.05
Return on average common
shareholders' equity 5.40 (18.03) 4.59 0.55
Weighted average equivalent
common shares outstanding, diluted 1,687 1,686 1,686 1,685
Salisbury Bancorp, Inc.
SELECTED CONSOLIDATED FINANCIAL DATA
(in thousands except ratios and per share amounts)
September 30, December 31, September 30,
FINANCIAL CONDITION 2009 2008 2008
---- ---- ----
Total assets $564,287 $495,754 $485,650
Loans, net 311,251 297,367 293,740
Allowance for loan losses 3,429 2,724 3,105
Securities 180,721 155,916 149,873
Cash and cash equivalents 35,302 9,660 12,740
Intangible assets 10,871 10,994 11,034
Deposits 414,799 344,925 344,609
Federal Home Loan Bank advances 76,767 87,914 86,490
Repurchase agreements 15,462 11,203 12,370
Shareholders' equity 52,478 38,939 38,720
Non-performing assets 7,168 5,175 1,591
Deposits
Demand (non-interest bearing) $ 64,718 $ 65,479 $ 69,198
NOW accounts 37,635 26,097 27,121
Money market 65,252 57,648 60,578
Savings and other 86,084 70,180 69,724
Certificates of deposit 161,110 125,521 117,988
Total deposits 414,799 344,925 344,609
Per common share
Book value $25.89 $23.10 $22.97
Tangible book value 19.44 16.58 16.42
Statistical data
Non-performing assets to total assets 1.27% 1.04% 0.33%
Allowance for loan losses to total loans 1.10 0.92 1.06
Allowance for loan losses to non-performing loans 50.80 54.81 224.03
Common shareholders' equity to assets 9.30 7.85 7.97
Tangible common shareholders' equity to assets 5.81 5.64 5.70
Tier 1 leverage capital 8.57 7.74 7.54
Total risk-based capital 12.37 11.59 13.15
Common shares outstanding, net
(period end) 1,687 1,686 1,686
- End -