SAL Salisbury Bancorp Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

 

FORM 8-K

________________________

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

July 26, 2023

________________________

SALISBURY BANCORP, INC.

(Exact name of registrant as specified in its charter)

________________________

 

Connecticut (State of other jurisdiction of incorporation)

001-14854 (Commission File Number)

06-1514263 (IRS Employer Identification No.)

 

5 Bissell Street, Lakeville, Connecticut (Address of principal executive offices)				06039 (Zip Code)
	Registrant’s telephone number, including area code: (860) 435-9801
	(Former name or former address, if changed since last report) ________________________

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☑

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.10 par value per share	SAL	NASDAQ

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

 

Section 2.

Financial Information

 

Item 2.02.

Results of Operations and Financial Condition

 

On July 26, 2023 Salisbury Bancorp, Inc. (“Salisbury”) (NASDAQ: “SAL”), the holding company for Salisbury Bank and Trust Company (the “Bank”), issued a press release announcing results for its second quarter ended June 30, 2023. The press release is attached as Exhibit 99.1 and is incorporated herein by reference.

Item 7.01.

Regulation FD Disclosure

 

On July 26, 2023, Salisbury announced that investor presentation slides, which include a review of financial results and trends through the period ended June 30, 2023, are available in the Shareholder Relations section of Salisbury’s website at salisburybank.com under About Us/Shareholder Relations/News & Market Information/Presentations. The information in this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section, and is not incorporated by reference into any other filing under the Securities Act of 1933, as amended, or the Exchange Act.

 

Section 9.

Financial Statement and Exhibits

 

Item 9.01.

Financial Statement and Exhibits

 

(a)       Not Applicable.

 

(b)       Not Applicable.

 

(c)       Not Applicable.

 

(d)       Exhibits.

Exhibit No.						Description
99.1						Press release dated June 30, 2023.
99.2						Investor Presentation

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		Salisbury Bancorp, Inc.
Date: July 26, 2023	By:	/s/ Peter Albero                                                                     Peter Albero Executive Vice President and Chief Financial Officer

Exhibit 99.1 

 

Wednesday, July 26, 2023

Company Press Release

 

Source: Salisbury Bancorp, Inc.

 

Salisbury Contact: Richard J. Cantele, Jr., President and Chief Executive Officer

860-435-9801 or rcantele@salisburybank.com

 

FOR IMMEDIATE RELEASE

 

SALISBURY BANCORP, INC. REPORTS RESULTS FOR SECOND QUARTER 2023

 

·

Strategic Merger with NBT Bancorp Approved by Regulators; Merger Expected to Close in August 2023

·

Second Quarter Net Income of $0.59 per Basic Common Share and Return on Average Assets of 0.88%

·

Deposit Balances, Excluding Brokered Funds, Increased $40.0 million or 3.2% in Second Quarter 2023

·

Non-performing Assets were 0.08% of Total Assets at June 30, 2023

·

Common Equity Tier 1 and Tangible Common Equity Ratio of 12.41% and 7.71%, Respectively, at June 30, 2023 [1]

 

Lakeville, Connecticut, July 26, 2023 /GlobeNewswire…..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, 2023.

Net income available to common shareholders was $3.4 million, or $0.59 per basic common share, for the second quarter ended June 30, 2023 (second quarter 2023), compared with $3.0 million, or $0.52 per basic common share, for the first quarter ended March 30, 2023 (first quarter 2023), and $3.8 million, or $0.67 per basic common share, for the second quarter ended June 30, 2022 (second quarter 2022). Net income for second quarter 2023 included pre-tax costs of $393 thousand related to Salisbury’s pending merger with NBT Bancorp (“NBT Merger”) and a non-taxable gain of $311 thousand related to proceeds receivable from a bank-owned life insurance policy (“BOLI”) due to the death of a former covered employee.

Salisbury’s President and Chief Executive Officer, Richard J. Cantele, Jr., stated, “Our results for the second quarter reflected the challenging macroeconomic and banking environment. While deposit balances increased during the quarter, and the credit quality of our loan portfolio remained strong, higher interest rates compressed net interest margin and earnings. Although the operating environment is likely to remain challenging in the near term, we are excited to have received regulatory approval for our strategic merger into NBT Bancorp. We believe Salisbury shareholders will benefit from the additional scale and expanded suite of products and services offered by NBT. I am extremely proud of the employees of Salisbury Bank who have worked diligently over the years to provide outstanding service to our customers and to give back to our communities. I am also grateful to our many customers for allowing us to partner and grow with them. I am confident that our customers will experience the same level of service from NBT.”

Net Interest and Dividend Income

Tax equivalent net interest income of $9.5 million for the second quarter 2023 decreased $1.8 million, or 16.0%, versus first quarter 2023, and decreased $1.6 million, or 14.0%, versus second quarter 2022. Tax equivalent interest income of $15.6 million for second quarter 2023 increased $436 thousand, or 2.9%, versus first quarter 2023 and increased $3.6 million, or 30.5%, from second quarter 2022. The cost of interest-bearing liabilities of $6.0 million for second quarter 2023 increased $2.2 million, or 59.1%, from first quarter 2023 and increased $5.2 million, or 604.7%, from second quarter 2022.

Average earning assets of $1.50 billion for second quarter 2023 increased $5.1 million, or 0.3%, from first quarter 2023, and increased $106.9 million, or 7.7%, versus second quarter 2022. Average earning assets for second quarter 2023 included average PPP loan balances of $0.2 million, net of deferred fees, compared $8.8 million in second quarter 2022. Average total interest bearing liabilities of $1.05 billion for second quarter 2023 increased $26.3 million, or 2.6%, from first quarter 2023 and increased $111.2 million, or 11.8%, versus second quarter 2022. The increase in average total interest-bearing liabilities from the comparative periods primarily reflected higher customer deposits and brokered deposits, which Salisbury utilized to fund loan growth and to provide liquidity.

The tax equivalent net interest margin for second quarter 2023 was 2.50% compared with 2.99% for first quarter 2023 and 3.15% for second quarter 2022. Excluding PPP loans, the tax equivalent net interest margin for second quarter 2023 was 2.50% compared with 2.99% for first quarter 2023 and 3.10% for second quarter 2022. See SUPPLEMENTAL INFORMATION – Net Interest and Dividend Income on page 9 of this release for additional details.

Non-Interest Income

Non-interest income of $2.9 million for second quarter 2023 increased $241 thousand versus first quarter 2023 and decreased $363 thousand versus second quarter 2022. Non-interest income for second quarter 2023 included a pre-tax loss of $209 thousand on the sale of $8.2 million of purchased shared national credit commercial loans and a non-taxable gain of $311 thousand related to proceeds receivable from a BOLI due to the death of a former covered employee. Second quarter 2022 similarly included a non-recurring non-taxable BOLI gain of $89 thousand due to the death of former covered employee.

Trust and Wealth Advisory fees of $1.3 million for second quarter 2023 increased $177 thousand from first quarter 2023 and increased $37 thousand from second quarter 2022. The change in fee income versus the comparative quarters was primarily driven by estate fees and seasonal tax preparation fees. Assets under administration were $1.35 billion at June 30, 2023 compared with $1.29 billion at December 31, 2022 and $1.26 billion at June 30, 2022. Discretionary assets under administration of $638.1 million at June 30, 2023 compared with $561.1 million at December 31, 2022 and $546.5 million at June 30, 2022. The variance from the comparative quarters primarily reflected changes in market valuations. Non-discretionary assets under administration of $711.7 million at June 30, 2023 decreased from $728.9 million at December 31, 2022 and decreased from $714.7 million at June 30, 2022. The variance from the comparative periods primarily reflected changes in the 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 $1.25 million for second quarter 2023 increased $16 thousand from first quarter 2023 and decreased $472 thousand from second quarter 2022, which included non-recurring loan pre-payment fees of $425 thousand. The increase from first quarter 2023 primarily reflected higher interchange fees, which were partially offset by lower deposit and lending-related fees. The decrease from second quarter 2022 primarily reflected lower lending fees, which were partially offset by higher deposit and other fees.

________________________

^[1] The tangible common equity ratio is a non-GAAP measure. Management considers this ratio to be an important measure of risk. Refer to page 8 of this document for the reconciliation of the components of this calculation to U.S. GAAP.

Non-Interest Expense

Non-interest expense of $8.8 million for second quarter 2023 decreased $350 thousand from first quarter 2023 and increased $244 thousand versus second quarter 2022. Non-interest expense for second quarter 2023 included costs of $393 thousand associated with the pending NBT merger compared with $385 thousand in first quarter 2023. Non-interest expense for first quarter 2023 also included a non-recurring charge of $158 thousand to write off fixed assets in the Red Oaks Mill, New York branch, which closed on April 30, 2023. Compensation expense of $4.9 million for second quarter 2023 decreased $332 thousand from first quarter 2023 and decreased $88 thousand versus second quarter 2022. The decrease from first quarter 2022 primarily reflected lower benefits expense and payroll taxes. The decrease from second quarter 2022 primarily reflected lower production and incentive accruals as well as lower benefits expense, which were partially offset by higher deferred compensation costs.

Excluding compensation expense, other non-interest expenses for second quarter 2023 decreased $18 thousand from first quarter 2023 and increased $332 thousand from second quarter 2022. The decrease from first quarter 2023 reflected the write-off of fixed assets associated with the Red Oaks Mill, New York branch closure in the prior quarter and lower professional fees, partially offset by higher technology and higher FDIC insurance costs. Similarly, the increase from second quarter 2022 primarily reflected higher technology and facilities related expenses and higher FDIC insurance costs, which were partially offset by lower marketing expenses and lower director fees.

The effective income tax rates for second quarter 2023, first quarter 2023 and second quarter 2022 were 12.7%, 20.0% and 15.3%, respectively. The lower tax rate in second quarter 2023 was primarily attributed to the non-taxable BOLI proceeds noted above and a release of $163 thousand of reserves to reflect Salisbury’s estimated tax liability at June 30, 2023.

Loans

Gross loans receivable of $1.25 billion for second quarter 2023 increased $2.4 million, or 0.2%, from first quarter 2023, and increased $103.7 million, or 9.0%, from second quarter 2022. New loan originations in second quarter 2023 were mostly offset by the sale of $8.2 million of shared national credit loans and the paydown of commercial credit lines. Residential 5+ multifamily gross loans receivable at June 30, 2023 and December 31, 2022 included a loan for approximately $16.0 million. At June 30, 2022 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 second quarter 2023 was 92.1% compared with 96.7% for first quarter 2023 and 87.3% for second quarter 2022. Balances by loan type for the comparative periods were as follows:

 

Loan Type ($ in thousands)			Q2 2023				Q1 2023				Q2 2022
Residential Real Estate (1-4 Family)		$	494,362			$	483,893			$	444,698
Residential 5+ Multifamily			95,297				91,772				69,272
Commercial Real Estate			438,949				433,379				387,787
Commercial & Industrial ex PPP Loans			173,457				185,376				189,086
PPP Loans			201				226				2,894
Commercial & Industrial – Total			173,658				185,602				191,980
Farm Land			3,320				3,451				3,668
Vacant Land			15,019				14,601				15,397
Municipal			13,306				17,577				17,486
Consumer			18,178				19,491				18,155
Deferred Costs			980				875				1,018
Gross Loans Receivable		$	1,253,069			$	1,250,641			$	1,149,461
Gross Loans Receivable ex PPP		$	1,252,868			$	1,250,415			$	1,146,567

 

Asset Quality

Non-performing assets of $1.3 million, or 0.08% of total assets at June 30, 2023, decreased $1.3 million from $2.7 million, or 0.17% of total assets at December 31, 2022, and decreased $2.9 million from $4.2 million, or 0.28% of total assets, at June 30, 2022.

Accruing loans receivable 30-to-89 days past due of $0.7 million, or 0.06% of gross loans receivable, decreased $0.6 million from $1.3 million, or 0.11% of gross loans receivable at December 31, 2022, and decreased $0.3 million from $1.0 million, or 0.09% of gross loans receivable at June 30, 2022.

The allowance for credit losses for second quarter 2023 was $15.6 million compared with $16.0 million for first quarter 2023 and $13.7 million for second quarter 2022. The provision release for second quarter 2023 was $0.4 million compared with provision expenses of $0.9 million for first quarter 2023 and $1.1 million for second quarter 2022. The benefit for second quarter 2023 primarily reflected the release of reserves associated with the shared national credit commercial loans, which Salisbury sold during the quarter, and an improvement in the forecast of certain macro-economic factors, which underpin the Bank’s allowance for credit losses model. Net loan charge-offs were $47 thousand for the second quarter 2023 compared with $32 thousand for first quarter 2023 and $312 thousand for the second quarter 2022.

Reserve coverage, as measured by the ratio of the allowance for credit losses to gross loans, excluding PPP loans, was 1.24% for the second quarter 2023 versus 1.28% for first quarter 2023 and 1.20% for second quarter 2022. Similarly, reserve coverage, as measured by the ratio of the allowance for credit losses to non-performing loans was 1,178% for the second quarter 2023 versus 714% for first quarter 2023 and 324% for second quarter 2022.

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, Borrowings and Liquidity

Total deposits of $1.36 billion at June 30, 2023 increased $1.6 million, or 0.1%, from December 31, 2022 and increased $43.4 million, or 3.3%, from June 30, 2022. Salisbury accumulates deposits from a diverse customer base. At June 30, 2023, the composition of Salisbury’s deposit balances was as follows: retail: 42%; commercial: 39%; municipalities: 8%; brokered funds: 6%; Wealth Advisory: 5%; and educational institutions: 1%. At June 30, 2023, the balance of Salisbury’s deposits that were not insured by the FDIC or not collateralized by marketable securities owned by Salisbury was approximately $340 million, or 25%, of total deposits.

At June 30, 2023, Salisbury had outstanding brokered deposits balances of $80.1 million compared with balances of $45.0 million at December 31, 2022 and $35.0 million at June 30, 2022. Brokered deposits are included in the certificates of deposit balances on Salisbury’s consolidated balance sheet. Management utilizes brokered deposits to fund loan growth and as a source of liquidity. Excluding brokered funds, Salisbury’s deposits increased $40.0 million, or 3.2%, from first quarter 2023. Average total deposits were $1.4 billion for second quarter 2023 and first quarter 2023 compared with $1.3 billion for second quarter 2022. Average total deposits for second quarter 2023 included average brokered deposits of $75.0 million compared with $47.9 million for first quarter 2023 and $18.0 million for second quarter 2022.

Salisbury has access to various sources of liquidity, including the FHLBB and the Federal Reserve Bank. Salisbury had $20.0 million of outstanding advances from FHLBB at June 30, 2023 compared with $10.0 million at December 31, 2022. Salisbury did not have any outstanding advances from FHLBB at June 30, 2022. Salisbury’s excess borrowing capacity at FHLBB was approximately $218 million at June 30, 2023. Additionally, at June 30, 2023, Salisbury had approximately $76 million of eligible collateral that could be posted to the Federal Reserve to secure funds under the Bank Term Funding Program. Salisbury has not borrowed funds under this program.

Capital

Shareholders’ equity increased $0.7 million in second quarter to $133.1 million at June 30, 2023 as net income of $3.4 million and other activity of $0.2 million, were partially offset by unrealized losses, net of taxes, in the available-for-sale securities (“AFS”) portfolio of $2.0 million, and common stock dividends paid of $0.9 million. The unrealized losses, net of taxes, in the AFS portfolio were $20.0 million at June 30, 2023. Book value per common share of $22.91 at June 30, 2023 increased $0.12 from first quarter 2023 and increased $0.90 from second quarter 2022. Tangible book value per common share of $20.51 at June 30, 2023 increased $0.13 from first quarter 2023 and increased $0.94 from second quarter 2022. At June 30, 2023, the Bank’s tangible common equity ratio, which included the unrealized losses in the AFS portfolio noted above, was 7.71%.

The Bank's regulatory capital ratios remain in compliance with regulatory “well capitalized” requirements. At June 30, 2023, the Bank’s Tier 1 leverage, total risk-based capital, and common equity tier 1 capital ratios were 10.15%, 13.66%, and 12.41%, 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.

Dividend on Common Shares

Presuming the NBT Merger is consummated by such time, Salisbury shareholders will receive a quarterly cash dividend, which will be paid by NBT, on September 15, 2023 to shareholders of record as of September 1, 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 March 2023, Salisbury filed an amended complaint against the beneficiaries to recover the distributed proceeds and to reinstate the trust account. Management believes that Salisbury’s exposure could possibly range from approximately $0.0 million to $0.4 million depending upon the amount the beneficiaries contribute toward the reinstatement of the trust and potential insurance coverage.  

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, and Poughkeepsie, 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 June 30, 2023, are available in the Shareholder Relations section of Salisbury’s website at salisburybank.com under About Us/Shareholder Relations/News & Market Information/Presentations.

Salisbury Bancorp, Inc. and Subsidiary

CONSOLIDATED BALANCE SHEETS (unaudited)

(in thousands, except share data)			June 30, 2023				December 31, 2022
ASSETS
Cash and due from banks		$	7,855			$	5,864
Interest bearing demand deposits with other banks			46,202				44,675
Total cash and cash equivalents			54,057				50,539
Securities
Available-for-sale at fair value			177,477				187,410
Mutual funds at fair value			2,020				1,933
Federal Home Loan Bank of Boston stock at cost			1,488				1,285
Loans receivable, net (allowance for credit losses: $15,558 and $14,846)			1,237,511				1,213,671
Bank premises and equipment, net			21,268				22,148
Goodwill			13,815				13,815
Intangible assets (net of accumulated amortization: $5,727 and $5,654)			154				227
Accrued interest receivable			6,546				6,797
Cash surrender value of life insurance policies			30,248				30,379
Deferred taxes			8,631				8,492
Other assets			5,121				4,886
Total Assets		$	1,558,336			$	1,541,582
LIABILITIES and SHAREHOLDERS' EQUITY
Deposits
Demand (non-interest bearing)		$	353,794			$	395,994
Demand (interest bearing)			219,483				231,486
Money market			361,004				343,965
Savings and other			218,339				233,578
Certificates of deposit			207,330				153,370
Total deposits			1,359,950				1,358,393
Repurchase agreements			7,492				7,228
Federal Home Loan Bank of Boston advances			20,000				10,000
Subordinated debt			24,559				24,531
Note payable			106				128
Finance lease obligations			4,189				4,262
Accrued interest and other liabilities			8,975				8,685
Total Liabilities			1,425,271				1,413,227
Shareholders' Equity
Common stock - $0.10 per share par value
Authorized: 10,000,000;
Issued: 5,807,119 and 5,798,816
Outstanding: 5,807,119 and 5,798,816			581				580
Unearned compensation – restricted stock awards			(779	)			(1,144	)
Paid-in capital			47,443				47,466
Retained earnings			105,846				102,178
Accumulated other comprehensive loss, net			(20,026	)			(20,725	)
Total Shareholders' Equity			133,065				128,355
Total Liabilities and Shareholders' Equity		$	1,558,336			$	1,541,582

 

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)			2023				2022				2023				2022
Interest and dividend income
Interest and fees on loans		$	13,604			$	10,576			$	26,853			$	20,740
Interest on debt securities
Taxable			1,033				859				2,102				1,583
Tax exempt			183				187				396				362
Other interest and dividends			561				107				954				164
Total interest and dividend income			15,381				11,729				30,305				22,849
Interest expense
Deposits			5,296				577				8,114				1,055
Repurchase agreements			25				4				41				6
Finance lease			40				41				79				82
Note payable			2				2				4				5
Subordinated debt			233				233				466				466
Federal Home Loan Bank of Boston advances			444				—				1,131				55
Total interest expense			6,040				857				9,835				1,669
Net interest and dividend income			9,341				10,872				20,470				21,180
(Release) provision for credit losses			(403	)			1,100				521				1,463
Net interest and dividend income after provision (release) for credit losses			9,744				9,772				19,949				19,717
Non-interest income
Trust and wealth advisory			1,330				1,293				2,483				2,533
Service charges and fees			1,251				1,723				2,485				2,861
Mortgage banking activities, net			(151	)			77				(92	)			432
(Losses) gains on mutual fund			(14	)			(30	)			5				(72	)
(Losses) gains on securities, net			(15	)			(45	)			(15	)			165
Bank-owned life insurance (“BOLI”) income			196				163				388				325
Gain on bank-owned life insurance			311				89				311				89
Other			26				27				60				57
Total non-interest income			2,934				3,297				5,625				6,390
Non-interest expense
Salaries			3,625				3,657				7,346				7,135
Employee benefits			1,232				1,288				2,700				2,565
Premises and equipment			1,078				973				2,183				2,086
Loss on write-down and sale of assets			—				—				158				—
Information processing and services			949				702				1,781				1,387
Professional fees			850				821				1,795				1,609
Collections, OREO, and loan related			29				116				100				232
FDIC insurance			248				122				346				293
Marketing and community support			187				262				314				447
Amortization of intangibles			34				50				73				104
Other			544				541				1,106				1,328
Total non-interest expense			8,776				8,532				17,902				17,186
Income before income taxes			3,902				4,537				7,672				8,921
Income tax provision			497				692				1,249				1,507
Net income		$	3,405			$	3,845			$	6,423			$	7,414
Net income available to common shareholders		$	3,354			$	3,772			$	6.322			$	7,280
Basic earnings per common share		$	0.59			$	0.67			$	1.11			$	1.29
Diluted earnings per common share		$	0.59			$	0.66			$	1.10			$	1.28
Common dividends per share		$	0.16			$	0.16			$	0.32			$	0.32

 

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 2023				Q1 2023				Q4 2022				Q3 2022				Q2 2022
Total assets		$	1,558,336			$	1,565,334			$	1,541,582			$	1,512,138			$	1,496,521
Loans receivable, net			1,237,511				1,234,632				1,213,671				1,176,493				1,135,758
Total securities			180,985				194,696				190,628				192,530				205,727
Deposits			1,359,950				1,293,042				1,358,393				1,325,204				1,316,539
FHLBB advances			20,000				100,000				10,000				20,000				—
Shareholders’ equity			133,065				132,355				128,355				123,160				127,303
Wealth assets under administration			1,349,827				1,301,162				1,289,918				1,232,272				1,261,244
Discretionary wealth assets under administration			638,103				588,414				561,050				522,109				546,506
Non-discretionary wealth assets under administration			711,724				712,748				728,868				710,163				714,738
Non-performing loans			1,321				2,241				2,663				1,860				4,229
Non-performing assets			1,321				2,241				2,663				1,860				4,229
Accruing loans past due 30-89 days			690				2,234				1,309				390				1,001
Net interest and dividend income			9,341				11,127				12,015				11,844				10,872
Net interest and dividend income, tax equivalent (1)			9,510				11,318				12,221				12,054				11,061
(Release) provision for credit losses			(403	)			924				525				695				1,100
Non-interest income			2,934				2,693				2,618				2,693				3,297
Non-interest expense			8,776				9,126				8,947				8,512				8,532
Income before income taxes			3,902				3,770				5,161				5,330				4,537
Income tax provision			497				752				1,037				994				692
Net income			3,405				3,018				4,124				4,336				3,845
Net income allocated to common shareholders			3,354				2,968				4,055				4,264				3,772
Per share data
Basic earnings per common share		$	0.59			$	0.52			$	0.71			$	0.75			$	0.67
Diluted earnings per common share			0.59				0.52				0.71				0.75				0.66
Dividends per common share			0.16				0.16				0.16				0.16				0.16
Book value per common share			22.91				22.79				22.13				21.29				22.01
Tangible book value per common share - Non-GAAP (2)			20.51				20.38				19.71				18.86				19.57
Common shares outstanding at end of period (in thousands)			5,807				5,808				5,799				5,784				5,784
Weighted average common shares outstanding, to calculate basic earnings per share (in thousands)			5,721				5,702				5,688				5,687				5,666
Weighted average common shares outstanding, to calculate diluted earnings per share (in thousands)			5,733				5,714				5,710				5,713				5,699
Profitability ratios
Net interest margin (tax equivalent) (1)			2.50	%			2.99	%			3.28	%			3.27	%			3.15	%
Efficiency ratio (2)			67.48				61.07				56.66				57.38				59.49
Effective income tax rate			12.73				19.95				20.10				18.65				15.25
Return on average assets			0.88				0.79				1.07				1.13				1.06
Return on average common shareholders’ equity			10.24				9.36				13.05				13.23				11.98
Credit quality ratios
Non-performing loans to loans receivable, gross			0.11	%			0.18	%			0.22	%			0.16	%			0.37	%
Accruing loans past due 30-89 days to loans receivable, gross			0.06				0.18				0.11				0.03				0.09
Allowance for credit losses to loans receivable, gross			1.24				1.28				1.21				1.20				1.19
Allowance for credit losses to non-performing loans			1,177.8				714.4				557.5				770.6				324.0
Non-performing assets to total assets			0.08				0.14				0.17				0.12				0.28
Capital ratios
Common shareholders' equity to assets			8.54	%			8.35	%			8.33	%			8.14	%			8.51	%
Tangible common shareholders' equity to tangible assets - Non-GAAP (2)			7.71				7.63				7.48				7.28				7.63
Tier 1 leverage capital (3)			10.15				9.98				9.99				9.83				10.04
Total risk-based capital (3)			13.66				13.41				13.43				13.24				13.28
Common equity tier 1 capital (3)			12.41				12.16				12.24				12.07				12.13

⁽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)			Q2 2023				Q1 2023				Q4 2022				Q3 2022				Q2 2022
Common Shareholders' Equity		$	133,065			$	132,355			$	128,355			$	123,160			$	127,303
Less: Goodwill			(13,815	)			(13,815	)			(13,815	)			(13,815	)			(13,815	)
Less: Intangible assets			(154	)			(188	)			(227	)			(269	)			(314	)
Tangible Common Shareholders' Equity		$	119,096			$	118,352			$	114,313			$	109,076			$	113,174
Total Assets		$	1,558,336			$	1,565,334			$	1,541,582			$	1,512,138			$	1,496,521
Less: Goodwill			(13,815	)			(13,815	)			(13,815	)			(13,815	)			(13,815	)
Less: Intangible assets			(154	)			(188	)			(227	)			(269	)			(314	)
Tangible Total Assets		$	1,544,367			$	1,551,330			$	1,527,540			$	1,498,054			$	1,482,392
Common Shares outstanding (in thousands)			5,807				5,808				5,799				5,784				5,784
Book value per Common Share – GAAP		$	22.91			$	22.79			$	22.13			$	21.29			$	22.01
Tangible book value per Common Share - Non-GAAP			20.51				20.38				19.71				18.86				19.57
Tangible common shareholders’ equity to tangible total assets - Non-GAAP			7.71	%			7.63	%			7.48	%			7.28	%			7.63	%
Consolidated:
Non-interest expense		$	8,776			$	9,126			$	8,947			$	8,512			$	8,532
Amortization of core deposit intangibles			(34	)			(39	)			(42	)			(46	)			(50	)
OREO recovery			—				—				—				15				—
Merger-related costs			(393	)			(385	)			(497	)			—				—
Fixed asset write-off			—				(158	)			—				—				—
Fraud-related recovery			—				—				—				—				50
Adjusted non-interest expense		$	8,349			$	8,544			$	8,408			$	8,481			$	8,532
Net interest and dividend income, tax equivalent		$	9,511			$	11,318			$	12,221			$	12,054			$	11,061
Non-interest income			2,934				2,693				2,618				2,693				3,297
Losses (gains) on securities			29				(20	)			1				47				75
BOLI proceeds receivable			(311	)			—				—				—				(89	)
Loss (gains) on sale of loans			209				—				—				(15	)			—
Adjusted revenue		$	12,372			$	13,991			$	14,840			$	14,779			$	14,344
Efficiency Ratio – Non-GAAP (1)			67.48	%			61.07	%			56.66	%			57.38	%			59.49	%

⁽¹⁾ Excluding revenue and expenses associated with trust & wealth advisory, the efficiency ratios would be: Q2: 2023: 66.19%; Q1 2023: 59.08%; Q4 2022: 54.64%; Q3 2022: 55.28%; Q2 2022: 57.21%.

 

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 2023				Q1 2023				Q2 2022				Q2 2023				Q1 2023				Q2 2022				Q2 2023				Q1 2023				Q2 2022
Loans (a)(d)		$	1,241,813			$	1,236,778			$	1,112,120			$	13,709			$	13,367			$	10,693				4.38	%			4.29	%			3.81	%
Securities (c)(d)			207,885				214,246				225,458				1,279				1,353				1,117				2.46				2.53				1.98
FHLBB stock			2,771				3,436				1,221				64				19				10				9.21				2.29				3.20
Short term funds (b)			47,733				40,689				54,553				498				375				98				4.18				3.72				0.73
Total interest-earning assets			1,500,202				1,495,149				1,393,352				15,550				15,114				11,918				4.12				4.02				3.40
Other assets			53,758				55,022				61,790
Total assets		$	1,553,960			$	1,550,171			$	1,455,142
Interest-bearing demand deposits		$	215,746			$	223,742			$	229,625				158				119				108				0.29				0.22				0.19
Money market accounts			342,555				320,015				299,870				2,786				1,270				156				3.26				1.61				0.21
Savings and other			228,031				232,162				236,728				727				402				97				1.28				0.70				0.16
Certificates of deposit			196,416				161,300				137,034				1,625				1,027				216				3.32				2.58				0.63
Total interest-bearing deposits			982,748				937,219				903,257				5,296				2,818				577				2.16				1.22				0.26
Repurchase agreements			5,101				3,961				10,216				25				16				4				1.98				1.65				0.15
Finance lease			5,354				5,397				5,283				40				40				41				2.96				2.96				3.09
Note payable			110				121				153				2				2				2				6.19				6.17				6.13
Subordinated debt (f)			24,551				24,536				24,494				233				233				233				3.80				3.80				3.80
FHLBB advances			36,758				57,056				—				444				687				—				4.78				4.82				—
Total interest-bearing liabilities			1,054,622				1,028,290				943,403				6,040				3,796				857				2.29				1.49				0.36
Demand deposits			357,690				382,601				376,694
Other liabilities			8,268				8,427				6,258
Shareholders’ equity			133,380				130,853				128,787
Total liabilities & shareholders’ equity		$	1,553,960			$	1,550,171			$	1,455,142
Net interest income														$	9,510			$	11,318			$	11,061
Spread on interest-bearing funds																											1.85				2.54				3.03
Net interest margin (e)																											2.50				2.99				3.15

(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 Q2 2023, Q1 2023 and Q2 2022 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 2023 and 2022.

(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)

 

Six months ended June 30,		Average Balance								Income / Expense								Average Yield / Rate
(dollars in thousands)		2023				2022				2023				2022				2023				2022
Loans (a)(d)		$	1,239,309			$	1,095,955			$	27,075			$	20,971				4.34	%			3.80	%
Securities (c)(d)			211,048				216,847				2,632				2,079				2.49				1.92
FHLBB stock			3,101				1,327				83				17				5.40				2.58
Short term funds (b)			44,231				88,813				872				146				3.97				0.33
Total earning assets			1,497,689				1,402,942				30,662				23,213				4.07				3.29
Other assets			54,386				68,256
Total assets		$	1,552,075			$	1,471,198
Interest-bearing demand deposits		$	219,722			$	231,037				277				207				0.25				0.18
Money market accounts			331,348				310,475				4,056				283				2.47				0.18
Savings and other			230,085				234,920				1,129				160				0.99				0.14
Certificates of deposit			178,954				134,063				2,652				405				2.99				0.61
Total interest-bearing deposits			960,109				910,495				8,114				1,055				1.70				0.23
Repurchase agreements			4,533				8,689				41				6				1.84				0.15
Finance lease			5,376				5,190				79				82				2.96				3.16
Note payable			115				158				4				5				6.19				6.13
Subordinated Debt (f)			24,545				24,488				466				466				3.80				3.81
FHLBB advances			46,851				1,479				1,131				55				4.80				7.46
Total interest-bearing liabilities			1,041,529				950,499				9,835				1,669				1.90				0.35
Demand deposits			370,057				381,731
Other liabilities			8,366				6,675
Shareholders’ equity			132,123				132,293
Total liabilities & shareholders’ equity		$	1,552,075			$	1,471,198
Net interest income										$	20,827			$	21,544
Spread on interest-bearing funds																			2.20				2.94
Net interest margin (e)																			2.75				3.05

 

(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 $0.4 million and $0.4 million, respectively for 2023 and 2022 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 2023 and 2022.

(e)

Net interest income divided by average interest-earning assets.

(f)

Net of issuance costs.

Exhibit 99.2

 

v3.23.2

Cover	Jul. 26, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Jul. 26, 2023
Entity File Number	001-14854
Entity Registrant Name	SALISBURY BANCORP, INC.
Entity Central Index Key	0001060219
Entity Tax Identification Number	06-1514263
Entity Incorporation, State or Country Code	CT
Entity Address, Address Line One	5 Bissell Street
Entity Address, City or Town	Lakeville
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06039
City Area Code	860
Local Phone Number	435-9801
Written Communications	true
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.10 par value per share
Trading Symbol	SAL
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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